Zimbabwe: Mugabe 'Out Of Ideas' To Salvage The Economy, Tsvangrai

By Staff Writer

Former Zimbabwe's Prime Minister Morgan Tsvangirai said on Monday July 7 that long-ruling President Robert Mugabe had "run out of ideas" to fix the economy amid massive unemployment and a brewing financial crisis.

Tsvangirai said the government’s policy inconsistencies were hampering Zimbabwe’s prospects of economic turnaround as it remains an albatross in attracting foreign direct investment

"Mr Mugabe remains marooned from the reality of the national situation, oblivious to the daily predicament facing Zimbabweans as they struggle to survive," the opposition leader said. "The government simply has run out of ideas."

Tsvangirai, who was premier from 2009 to 2013 as part of a power-sharing deal with Mugabe, said corruption and state profligacy were exacerbating economic woes as the country is saddled with a $10 billion debt.

He said systemic corruption and unbridled avarice has become an albatross of the country’s economy.

"We have a government that has failed to mobilize a rescue package for the productive sector," Tsvangirai said, adding that the result was an "unmitigated failure" to "rescue this abysmal situation".

He blamed the government's latest moves to seize majority stakes in foreign-owned companies for chasing away potential investors.

Under a new law, companies are required to hand over 51 percent of their shares to black Zimbabweans.

The economy has still not recovered from an economic meltdown that began more than 10 years ago after Mugabe pushed for the controversial seizure of white-owned land.

Independent economists estimate that unemployment in what was once known as the breadbasket of Africa now stands at 80 percent.

“There is an acute lack of investor confidence and support by development partners, driven by the legitimacy crisis, as well as a ballooning debt which remains subserviced,” he said.

“We are isolated from meaningful investment capital flow and substantial development financial assistance."

Without legitimacy, the country remains exposed to risk and uncertainty, two factors that determine investment and economic progress,” added Tsvangirai.

This comes as Zimbabwe continues to wobble in attracting foreign direct investment, drawing in a mere $410 million against $56 billion that went into African economies last year, according to a United Nations research report.

The southern African country’s economy,  predicted by the World Bank to grow by only two percent in 2014 against government’s 6,1 percent forecast, urgently requires significant amounts of foreign direct investment to create employment, enhance technological progress, improve productivity, add value and beneficiate its raw materials.

Average Zimbabweans are bearing the brunt of the economic crunch, Tsvangirai noted.

"The ordinary people of this country are simply failing to cope with life in the current socio-economic circumstances that are upon us," he said.

Economist Godfrey Kanyenze said resolving the contradictions arising from the indigenization law would result in increased foreign direct investment.

Kanyenze noted that the proposed amendments to the indigenization law must be “inclusive and results in policy consistency and predictability, then it removes the suspicion and uncertainty associated with a discretionary framework,” he said.

“Given the past experiences where government ministries and agencies contradicted each other, inclusivity will help send a clear and unified signal which enhances confidence to would-be investors,” added Kanyenze.

Thedias Kasaira, Imara’s managing director, recently said “most investors want to see it (amendments to the indigenization law) in black and white rather than just talks”.

“Our position is that as long as there is no clarity on the law people will continue to doubt,” he said, adding that “but we believe there is nothing really wrong with it as long as it is applied to all in the same way.”

Tsvangirai leads the beleaguered Movement of Democratic Change (MDC) opposition party that lost the July 2013 elections to Mugabe, his long-time rival.

The former premier maintains that those polls were rigged.

Since losing the vote, Tsvangirai has faced growing criticism within his party, with some suggesting that he should step down.

His term at the helm of MDC ends in 2016.