The Sunday News
His Excellence Emmerson DMnangagwa
Last Monday, I had occasion to host our business and consumer leaders to a working breakfast meeting.
Many will recall that soon after elections, I urged us all to refocus on national attention towards recovering and growing our economy.
The inaugural Monday meeting and more such to come, must be seen in that light.
Even at the height of the political season, we still remain producers and consumers of goods and services trading in our markets.
I suppose this is what economists mean when they say “man is an economic animal”.
Politics cannot be the be-all and end-all of our lives. Neither is it an all-time preoccupation. The goal in all such meetings is to forge mutually gainful partnerships between Government and Business to build a strong economy for our Second Republic.
We must create more jobs for our youths. Zimbabwe cannot be open for business when it is closed for economic dialogue.
“Them/ Us” divisive dichotomy has not served any economy. There is fierce global competition which daily continues to bear down on small, developing economies like ours. We dwindle and become even smaller when we fragment ourselves further.
Building an enduring partnership between Government and Business requires mutual acceptance.
Business leaders must know and appreciate the political realities and pressures which face Government, thus informing and limiting its choices and decisions.
Likewise, Government must know and understand pressures, sensitivities and opportunities in the market which shape and constrain business choices and options.
Above all, Government must appreciate that in business, time and quick turnaround time for decisions are of essence. Once there is such convergence, consensus on shared national goals becomes easier to build and achieve.
And there is much to argue for such mutuality. The consumer who buys goods and services off business shelves is the same person who casts a vote for a politician.
In our respective spheres, we succeed when the consumer flourishes; we fail when he suffers. So, for me the foremost point to celebrate from last week is that we met and broke the fast together, in amity.
Besides, there were lighter yet instructive moments. State House could not raise bread at all for the handful of businessmen and women who sat for breakfast!
Much to my disappointment, my business guests did not ask why. As a result I had to park away my short, sharp answer which I had composed in readiness for them! State House does not bake bread; industry does.
But the opportunity was not lost entirely. The discussions which followed were remarkably frank and honest. One contributor reminded us that “bread is wheat”, adding Zimbabwe has the soils, the water, the cold, the seed and the expertise to grow the wheat she needs.
Yet over the years, she has only managed enough wheat to last for about three or less months in a year, with the requirements for the rest of the year having to be met through expensive imports from as far afield as Canada, Russia and Brazil.
As much as US$16m is spent monthly on wheat imports.
The meeting heard that instead of supporting farmers to grow wheat, our millers and bakers make a beeline to the Reserve Bank of Zimbabwe which does not grow wheat. They queue at the RBZ for foreign currency they need to import wheat!
The same story goes for soya beans which grow very well here, and whose present national output is adequate for just one month!
For the remaining eleven months we import the product at US$20 million a month.
Quite needlessly, we have become an import-dependent economy in areas where we have the means, but lack the will to produce.
Wheat and soya should come from our land and not from imports.
This requires Business partnering Government and the farmer under contract farming arrangements. Redirecting a small portion of yearly dividend towards mechanising our agriculture and towards input support will definitely create enough feedstock for our factories.
This is called enlightened self-interest.
Companies in the beverages, cotton, tobacco and milk businesses have shown the way in this regard by emphasising both corporate and contract farming.
There is no wheel to invent here, only will to summon!
I am glad that this point was conceded at the breakfast meeting, which means we should begin to see more interventions meant to support our import substitution programmes in agriculture to support our agro-industrial strategy.
Still on agriculture, I am alive to arguments for curtailing Government support to farmers, which are often made on grounds of reducing public debt.
Except both our national food security requirements and our agro-led industrial strategy make these arguments less persuasive.
So, too, do experiences elsewhere in the world.
Well-developed economies in European Union countries whose agriculture is highly mechanised still subsidise agriculture.
This year alone, the European Union, through its Common Agricultural Policy (CAP), is projected to support European farmers and European rural development programmes to the tune of €58,82 billion.
CAP aims to improve agricultural productivity in order to ensure a stable supply of affordable food to the European consumer.
CAP seeks to guarantee viability and livelihoods for farmers whose industry is susceptible to the vagaries of climate change.
CAP also seeks to enhance and secure job-creation in farming, and in agri-food industries and associated sectors.
Above all, CAP ensures transformative investments in rural development within the EU.
All these are goals we can relate to here in Zimbabwe. This means we have a lot to learn from this European policy which has been in existence since its launch in 1962!
The issue then is not to stop subsidising agriculture. Rather, the issue is to do so efficiently, and in order to ensure higher productivity in that critical sector.
Both would then guarantee a stable supply of affordable food to the consumer.
Above all, our Command Agriculture, itself the modest equivalent of CAP in the EU, must link directly with our broader industrial policy strategy.
It must supply the much-needed feedstock which is in deficit.
It must, too, stimulate rural development and incomes, in line with our constitutionally dictated policy of decentralisation and devolution.
On their part, farmers must develop the discipline to work the land optimally, and to honour financial obligations arising from funding arrangements availed to them.
Accessing inputs for the season must be conditional upon demonstrable commitment to service previous loans.
That way, we guard against bloating the public debt while ensuring that critical transition of turning farming into business.
At the instance of banks, Government introduced far-reaching changes and features to the 99-Year Land Leases in order to make them bankable and tradeable legal instruments.
There has to be closure to this matter which has been moving back and forth for far too long. On Tuesday I had a good meeting with representatives of suppliers of agricultural inputs.
Prices for inputs had risen dramatically ahead of the season which is almost upon us, making it simply senseless to go back to the field. I am happy the prices have now come down, thus making farming profitable once more.
A deal has also been concluded to augment fertilisers for the season. This, coupled with the now stable fuel supplies in the country, should ensure the whole economy moves forward, led by agriculture.
I fully agree with our industrialists that short-term measures to meet the supply gap on basic commodities in the market should not undermine our long-term country industrialisation strategy.
For that reason, the recent suspension of Statutory Instrument 122 (SI 64 previously) is temporary, and only meant to meet the surge in consumer demand during the festive season, as well as to plug the raw materials supply gap for industry between now and the next harvest.
More and better jobs come from growing our manufacturing capacity than from trading in imported goods.
But our manufacturers must earn the Nation’s trust by operating and trading ethically. Sadly, this has not been so in the last three or so weeks.
Government took to heart the cry that the two percent transactional tax has compounded the tax burden for both business and for the consumer.
Once the legal instrument we are crafting against unexplained wealth and deposits is in place, new measures will be announced to review the tax which, among other considerations, had been occasioned by illicit activities in the financial services sector.
Government also took note of Business expectations on fiscal consolidation.
A time-lined raft of measures on that front will be announced soon, including an exercise in developing a biometric register of all civil servants on Government payroll which should eliminate leakages through ghost workers.
A key consideration of both monetary and fiscal policy must be to secure the values of wealth, earnings, wages and savings in the economy.
We should never make or allow decisions that erode value, as happened in 2008.
On this one matter we stand firm and unmoved. No policy will be entertained whose net effect is to undermine value in the economy. Alongside this is the need to improve public communication on decisions and policies affecting Business.
Those of us in Government have not always fared well in this regard. Correctly, Business criticised us for undermining confidence and certainty in the market and beyond. Cheap and reckless talk has further raised the already high country risk.
To narrow the communication gap, I have embraced the idea of a Business Council to advise me and Government.
At the Monday meeting, I requested that Business forward names so that such an advisory body is urgently constituted.
Because we operate in the global market, I have also decided to create another advisory body comprising international experts who will keep me keyed on international business and investment issues.
The catchment for such a team will be global, both geographically and by way of the range of experience. Zimbabwe must improve her international appeal for FDI.
Overall, what pleased me most about the Monday breakfast meeting was how minds and arguments criss-crossed beyond sectoral boundaries.
It showed honesty, frankness and balance. There was no positional thinking. We had, after all, met to brainstorm. We had not met to ventilate institutional positions, to cast aspersions or to dig in.
Shortcomings were admitted to; criticisms and suggestions were embraced in a positive spirit. That is the way it should be as we move forward in unison.
Zimbabwe is open for business and for dialogue.
