The Sunday News
Khumbulani Vodloza Sibanda
EVERYONE is in agreement that the prevailing status quo of wages chasing after high prices is untenable, hence reports of an imminent signing of a social contract between Government, business and labour were long overdue.
The Tripartite Negotiating Forum (TNF) is one of many efforts which the Government of President Emmerson Mnangagwa has crafted to bring sanity in the economy and tackle runaway inflation. Since the Second Republic announced the end of the austerity measures at the end of 2019, focus has shifted to productivity and bringing economic stability and a social contract could not have come at a better time. In simpler terms a “social contract or tripartite agreement is an arrangement bringing together the Government, labour and business articulating a common vision for the social-economic development of the country”.
As the country moved from dollarisation and adopted the use of the local Zim dollar currency, unscrupulous businesspeople took advantage of the transition which has seen the prices of basic goods skyrocketing out of reach for most citizens. Compelled by this, Government, business and labour have to agree through a social contract to reach a consensus on how to price goods and services, award wages and salaries for a much desired win-win scenario.
Why a social contract?
The TNF, under the Kadoma Declaration of 2009, Government noted the importance of addressing macro-economic problems, with the economic risk speaking to the unsustainable macro-economic variables, which lead to hyperinflation and economic depression.
One of the causes of country risk factor that was identified by TNF, was unstable macro-economic fundamentals, which led to much speculation after currency reforms leading to a volatile market in terms of pricing. This led most Zimbabweans grappling with run-away prices of goods and services adversely affecting their standards of living. It is the responsibility of Government to then prioritise issues of macro-economic stabilisation, with business and labour being expected to support an agreed macro-economic stabilisation programme, as at the end of the day, Zimbabwe is for all of us, its success or failure speaks to us as a people.
The TNF will go a long way in eliminating significant disparities within the economy and build a foundation for the much anticipated economic revival boosted by productivity. Government has been forking out huge sums of money to cushion its citizens against the economic challenges, monies which could be used for other developmental projects. Hence, a more stable economy will mean citizens would not need so much support from Government leaving room for growth for the economy. For instance, the Minister of Finance, Professor Mthuli Ncube indicated last year that Government was shelling out $13 million monthly to subsidise the transport sector, in this case Zupco.
Zimbabwean economists have been calling for a holistic approach to addressing the country challenges through TNF and the signing of the social contract could not have come at a more opportune time.
What needs to be done?
The first commendable step that Government took was to launch and expedite the TNF into an Act. This has enabled the major stakeholders, comprising the Ministry of Public Service, Labour and Social Welfare, representing Government as well as business and labour to come together and agree on key issues such as reaching a consensus on how to price goods and services, award wages and salaries that are aligned to pricing.
In essence, before Government implements anything with the clusters of economy, labour relations and social factors, it has to go through the TNF. This improves on brainstorming and coming up with relevant working solutions on challenges being faced. As it stands, most businesspeople have been ripping consumers off, through high priced goods and services, way beyond the reach of many. This has contributed to citizens living way beyond the poverty datum line, as they fail to have access to basic goods and service.
Dialogue, among relevant stakeholders, can facilitate reform in sectors or clusters under consideration, with all the parties involved set to benefit. Bringing together stakeholders from different social groups to work on specific initiatives can help strengthen alliances among them with concrete objectives in mind.
From these deliberations, Government is expected to forward ways in which it awards wages that are aligned to prices. A significant increase in wages means that citizens have more buying power or disposable income, which also means that Government can then expect an increase in tax collection.
In the same vein, high expenditure means businesses remain viable and profitable, resulting in a win-win situation for all stakeholders.
The Benefits
Governance, accountability and transparency: the social contract has the potential to improve on governance, accountability and transparency. This is because involved parties are expected to keep each other in check for the social contract to work and remain beneficial to stakeholders involved, or else the chain collapses. Government may be expected to implement active labour market policies, better employment relations and offer minimum income that workers can sustain themselves with, among other policies.
On its part, the market or businesses are supposed to provide goods and services at prices that citizens can also afford that are aligned to wages. As a result, none of the parties is disadvantaged. These measures also contribute towards the growth of the economy, through increased production as well as expenditure and tax revenue that would be directed towards building the economy.
Dialogue and Nation building: The social dialogue, through social contracts, among business groups, Government departments and labour groups has the objective of building consensus towards nation building and revival of the economy. What Zimbabwe is mostly concentrating on is making sure that the country recognises economic growth, becomes a middle income economy by 2030, with a people that are peaceful and sharing a common goal.
Consumer responsibility
For social contracts to work and be fully functional, the citizens and or consumers have the responsibility of calling attention to businesses that are ripping off consumers and practicing outside the confines of the social contracts. Businesses also have the responsibility to ensure stronger customer relationships so that they are in turn, guaranteed of long-term profit potential. A happy customer is most likely to spend more than a dissatisfied one.
In the same manner, once viable contracts are in place, parallel markets that have had a negative effect on the country’s fiscus as a whole will be shunned. Limited and controlled parallel market play would help boost the local businesses as well as grow the formal market, contributing to the growth of the economy.
In the long run, there is a need for dedication and commitment from relevant stakeholders to support the clusters meant to achieve national development and ultimate growth of the economy. There is a need for collective effort to make sure that Government, business and labour equally and mutually benefit from social contracts.
