Vision 2030

 HOW DO YOU BATH WITHOUT A SOAP?

Author: BLESSED MUPATSI.

The ruling party is painting pictures of a different Zimbabwe achievable by 2030 under the so-called VISION 2030. It is easy to believe in vision 2030, but it seems much harder to apprehend its achievement. Therefore, this paper is going to unpack vision 2030 using precedent on events that led to the 2008 hyperinflation in Zimbabwe. Moreso, suggest possible solutions that will enable the government to achieve vision 2030.

For a better understanding, l will look at what vision 2030 is. A vision is a vivid mental image of the future. The president promised citizens a set of goals that he aims to achieve by 2030. The main aim is to be a middle-income country by 2030 currently Zimbabwe is a lower-middle income country with a Gross Domestic Product (GDP) of $20.563 billion. Some of the aims that the President wants to achieve by 2030 are dam construction projects, privatisation of state-owned enterprises (e.g. AgricBank, Grain Marketing Board, NetOne among others), improve road network.             i

Zimbabwe’s system is structured to reward the corrupt and penalize the just with such a system Vision 2030 is like a house without a foundation. Philip Haslam with Russell Lamberti have wrote about this in their book ‘When Money Destroys Nations’. Hyperinflations is not something that happens overnight it is a chaotic process. The collapse of the Zimbabwean dollar henceforth referred as the Zimdollar had been two decades in the making and without the necessary reforms in place Vision 2030 is a myth. Haslam define hyperinflation as a period of economic chaos when confidence in the currency deteriorates markedly, leading to a rapid, chaotic and uncontrollable rise in the prices of goods and services and the eventual collapse of confidence in the currency. The same policies that the late R.G Mugabe implemented and led to the collapse of the Zimdollar are the same that the current leader E.D Mnangagwa is implementing. Numerous question pop up, what has changed? This time are they going to work? 

In 1997, the war veterans became a pressure group that was a threat to Zimbabwe African National Union-Patriotic Front (ZANU-PF) and to calm them down Mugabe instructed the Reserve Bank to print more money. It was after some corrupt officials had depleted the funds given to war veterans under the War Veteran Compensation Fund. This was the first signal that led to the collapse of the Zimdollar. ED Mnangagwa had promised civil servants 75USD allowance in light of the pandemic Covid-19. This promise was unachievable for a simply reason treasurer does not have this kind of money. The solution to this problem was to give civil servants our local currency equivalent to 75USD. To meet demand they had to print more money and introduce higher denominations. This does not need an economist to tell you that a storm is brewing. 

Most African countries including Zimbabwe depend on foreign aid and when foreign organisation withdraw assistance the economy is left in a chaotic state. Due to high level of corruption and mismanagement, most international organisation suspended aid to Zimbabwe. In 1997, the World Bank was facilitating a US$100 million loan to Zimbabwe within a month after hearing about the veterans scheme it withdraw its facility. On April 30, the government through the Minister of Finance and Economic Development Prof. Mthuli Ncube wrote a letter to International Financial Institutions saying the Southern African country will collapse if help in the form of cash does not come soon. In response to the letter, the European Union ambassador to Zimbabwe Timo Olkkonen said ‘At the moment, budget support is not on the table….that is not a fiscal environment where l would be willing to see European taxpayers’ money go’. Moreso, the US embassy in Zimbabwe ruled out any form of aid to the Zimbabwean government. The only route that is left for government is to print more money its’ only a matter of time they will introduce higher denomination which will include 50 and 100 notes. 

Democratic Republic of Congo (DRC) had been destabilised by civil wars caused by rebel forces. In 1998, Mugabe sent 11 000 troops to the country on a peacekeeping mission to support the leader. This had a fatal blow as it overwhelmed the public finances and it increased concern on potential investors and the international community. There were reports that the government had sent troops to Mozambique on a peacekeeping mission caused by Islamic rebels. However, the government rebutted the claim if the deployment is true history will repeat itself. On 31 August, there were anticipated protest against corruption in response the government-deployed security personal this act overburdened public finances. 

Hyperinflation is inevitable especially when they is zero confidence in the currency. In response, both regimes forced the citizens to use the local currency. Under, Mnangagwa the Minister of Finance in June 2019 banned the use foreign currency in Zimbabwe. Mugabe made it illegal to hold foreign currency. In addition, they introduced withdrawal limits the impact is felt by small to medium trader the regime is desperate. In forcing people to use, the local currency authorities tend to do illegal things in July 2019 the government stopped publishing official statistics. 

As illustrated early hyperinflation is not something that happen overnight it is a process that takes several years. It took two decades for the Zimdollar to final collapse and the German mark collapsed after nine years after the major printing programme. In February 2019, as a measure to dedollarize the government introduced the RTGS (Real-Time Gross Settlement) and it begun to trade at 1:3 against the USD. With a resilient parallel market it rapidly devalued in September 2020 it is trading at 1:83 the poor are made poorer especially Zimbabweans’ with savings accounts. In 2008 a lifetime, saving could not even buy a tissue thus by 2030 those people who have savings account will not be able to buy anything. The annual inflation rate is at 837.53% as per Ludwig von Mises continued inflation leads to catastrophe. In such an environment, it is wise to invest.  

Corruption has played a pivotal in the economy of Zimbabwe. The poor are funding the luxurious life of the ruling elite in Zimbabwe. To recover the money that treasurer loss to the ruling elite and they allies they print more money. Corrupt government officials depleted funds meant for the War Veteran Compensation Scheme some of them claimed to have been 99 % injured but where still able to walk. In 2016, Mugabe claimed that the country lost $15 billion in mining revenue alone to corruption. Recently, millions of dollars where lost in a Covid-19 procurement scandal which involved the President’s son. Loice Matanda-Moyo the wife of foreign minister and a close ally to the President Sibusiso Moyo heads the Zimbabwe Anti-Corruption Commission (ZACC) the question whether the body is independent is out of context. With such levels of corruption, there is no vision 2030 that is achievable in Zimbabwe and the fight against corruption is woefully disappointing.

Land is a very sensitive issue not only in Zimbabwe but also in Africa that is the main reason why Africans went to war to remove the colonizer because they wanted they land back. Land is equal to shares in Europe moreso, agriculture is the backbone of our economy. Recently, the government has taken some steps in changing the land policies however; the land issue is far from being resolved. The government owns the land and it can take it back at any time this scares investors. The current leases (99-year leases) are not bankable making vision 2030 and Zimbabwe is open for investment impossible. Both Mugabe and his successor Mnangagwa have failed to address the land issue properly they policies on land a reactionary. 

Mining is one of the sectors that is a key enabler towards achieving vision 2030. The President has an ambition of US$12 billion mining economy by 2023 that will contribute to the main goal of becoming a middle-income country by 2030. In 2008, government signed a controversial piece of legislature into law the Indigenisation and Economic Empowerment Act (Chapter14:33) which required foreign-owned companies to have at least 51 percent of shares owned by indigenous black Zimbabweans. However, despite the effort by the government to reform this sector it is highly militarized and allegation of human rights violation have be leveled up. In 2019, the United States of America banned importing diamonds from Zimbabwe citing forced labour and other human rights violation. It is unlikely that the President is going to achieve his ambition of US$12 billion mining economy by 2023. 

On my first article l discussed, the need of an independent judicial in Zimbabwe I was protesting against the Constitutional Amendment Bill. No one would invest in a land where his investment is unprotected. We have few investor because the judiciary has a long history of bias towards the ruling elite. Vision 2030 its fallacy because we have zero investors and potential investors are scared to lose their money. 

I believe every problem has a solution, for the government to achieve vision 2030 it needs to implement genuine reforms. In the next article, l will look at depth on reforms that the government must implement some of them include aligning Acts of Parliament to the Constitution, respecting human rights, electoral reform, reforms in the judiciary and security sector among others. Without reforms, Zimbabwe is likely to continue down the path of political violence at the hand of the state, protests and eventually a hyperinflation maybe worse than the one experienced in 2008. Hyperinflation is inevitable as long there are no reforms. According to Philip Haslam, he suggested six gorge moments of hyperinflation. Currently, Zimbabwe is on Gorge moment 2 characterised with money shortages, development of long queues at banks. Vision 2030 is a brewing storm the only en route the Reserve Bank has is to print more money and money printing leads to shortage of money.

To be continued.