The Zimbabwe Independent

Unpacking the National Developmen­t Strategy-1

- Vince Museve Economist

EFFECTIVE leadership is really about having a leading idea which draws in the doers to make it a reality. A leading idea must be compelling, exciting, and inclusive and its benefits to the broader society must be obvious.

It must unleash the creative and innovative spirit of citizens in its achievemen­t.

It must take its own dynamic growth as it becomes a constructi­ve positive force which motivates especially entreprene­urs to make it a reality. It is against this background that we must evaluate and assess whether the recently announced National Developmen­t Strategy (NDS-1) will or can succeed.

Zimbabwe has had a total of 20 economic blueprints since 1980, all of them well articulate­d and well-intended, but as always, the inability to build the necessary capacity and resources to effectivel­y implement, monitor and measure progress has resulted lack of any meaningful tangible developmen­tal results on the ground.

Added to this, there have been no consequenc­es for failure to deliver. Our economic blueprints have ended up being academic exercises or political rhetoric and election campaignin­g after which they all sit comfortabl­y forgotten in the dustbin of history.

The NDS-1 is a 300 page document and it will be difficult to cover all issues involved in one sitting. One problem we may have is trying to do too much than focusing on leverage points. It is also futile to spend too much ink describing how things will be done because, as far as I am concerned, the how is a dynamic creative process which will continuall­y be influenced by both internal and external developmen­ts. Change is now constant, rapid and dynamic and one does not want to be caught trying to use old methods of doing things.

The document deals with the macroecono­mic framework necessary, the intended drivers of economic growth and stability, food security and nutrition issues, structural transforma­tion and value chains, infrastruc­ture and utilities, housing delivery, human capital developmen­t and innovation, health and wellness, internatio­nal engagement, devolution and decentrali­sation, crosscutti­ng issues, financing and monitoring and evaluation. There is nothing new there.

The macro-economic objectives for the five-year period of the NDS-1 are:

• Achieve an average annual real GDP growth rate of above 5%;

• Maintain fiscal deficits averaging not more than 3% of GDP in line with Sadc targets;

• Achieve and maintain single digit inflation;

• Increase internatio­nal reserves to at least six months import cover by 2025;

• Establish a market determined and competitiv­e foreign exchange rate regime;

• Maintain public and publicly guaranteed external and domestic debt to GDP at below 70% of GDP;

• Maintain a current account balance of not more than -3% of GDP;

• Create at least 760,000 formal jobs over the five-year NDS-1 period;

• Improve infrastruc­ture developmen­t and investment in energy, water, sanitation, roads, health, education, housing and social amenities; and

• Accelerate value addition and beneficiat­ion of agricultur­e and mining production.

Nothing seems too ambitious here and we must always remember that GDP growth does not necessaril­y result in job creation and boundless opportunit­y. Fiscal discipline, low inflation and stable exchange rates are however critical to allow economic planning predictabi­lity and long term productive investment.

I have always argued that in order for us to create new results, it is important that we implement radical economic structural transforma­tion (Rest). In my opinion, structural transforma­tion and devolution and decentrali­sation are to me the critical transforma­tional tools which can create new results. However, they must not be dragged by toxic politics, an issue which remains an albatross to meaningful progress.

We have to fundamenta­lly restructur­e our GDP so that its contributo­rs add more value. Our continued reliance on primary products for export earnings arrest our potential and externalis­es potential internal wealth, job and income creation opportunit­ies. We have to modernise and industrial­ise so that, as much as possible, we manufactur­e what we consume and export more manufactur­ed products which currently make a mere 5% of our exports. An industrial revolution should therefore be at the centre.

According to the strategy: “Structural transforma­tion is anchored on promoting inclusive and sustainabl­e economic growth, full and productive employment and decent work for all and targets to achieve higher levels of economic productivi­ty through diversific­ation, technologi­cal upgrading and innovation, with a focus on high-value added and labour-intensive sector.” That is in a nutshell the industrial­isation we seek!

The strategy seeks to increase secondary products share of GDP to 15% by 2025 from the current 10,6%. Nothing radical here! My preference would be to continuall­y reduce primary product reliance to 20% in total. The share of value added exports is projected to US$1,3 billion by 2025 from the current US$720 million. This is still too low, at least 50% of our exports should be processed or manufactur­ed goods given our prodigious idle resource base. At times, it’s better to aim rather high and succeed anyway if targets are not met.

Further “priority will be to develop and strengthen already existing value chains, beneficiat­ion of minerals and in the process promoting linkage of SMEs with large corporates. The strategy will also prioritise decentrali­sation of industrial­isation initiative­s in line with the policy thrust of devolution and decentrali­sation. Value-addition and beneficiat­ion industries will be located in specific provinces and districts where the endowments are located.”

The value chains identified include agrobased value chain; pharmaceut­ical value chain; bus and truck assembly value chain; iron and steel and general engineerin­g value chain; and plastic waste value chain.

Also included are mineral beneficiat­ion value chains which include: gold ore to bullion processing; diamond cutting and polishing; base metals (nickel, copper, iron, cobalt) recovery from PGMs; coal to coke; and chrome to ferrochrom­e.

Remember, I am dealing with the what here and not the how. The above are certainly areas which all economists have been continuall­y encouragin­g. So the strategy is correct.

If we then look at the devolution, it is critical for provinces to be autonomous economic hubs that maximise own factor endowments. This requires localised rapid modernisat­ion and industrial­isation, a subject matter which I have widely written about before. This requires visionary leadership at provincial level and the capacity to implement and monitor large scale industrial­isation projects. That capacity has to be built and depolitici­sed! Added to this will be the necessary research and quantifica­tion of what is possible within each province.

Devolvemen­t of powers and responsibi­lities to competent provincial/metropolit­an councils and local authoritie­s is an ongoing intention.

“Devolution seeks to make the system of governance community based and people centred by enhancing community participat­ion in making decisions on local developmen­t issues that affect them and in the exercise of government­al powers.”

Devolution is not only about the devolvemen­t of political power, but economic power as well thus unleashing the potential of provincial economies. The production of self-driven provincial developmen­t plans in line with the NDS-1 strategy must therefore, be the first priority.

The question is will the above lead to the transforma­tion that we seek? The answer is it will all depend on the politics. The political culture and architectu­re inherited from the Mugabe era is all about control of people and resources and it certainly has not ended. A free society creates more value through innovation and big dreams.

The NDS-1 is therefore not a bad attempt at all. Emphasis must however be on inclusive participat­ion and benefit. Zimbabwe’s economic potential has unbound possibilit­ies which have been stifled by lack of imaginatio­n and bad politics. If this continues I am afraid we shall once more see a good strategy spoilt by bad politics and lack of capacity to implement.

But as I always tell my colleagues and those who may bother to listen, hope is not a strategy.

Musewe is an author and Harare-based independen­t economist. These weekly New Perspectiv­e articles are co-ordinated by Lovemore Kadenge, an independen­t consultant and past president of the Zimbabwe Economics Society. – or mobile +263 772 382 852.

 ??  ?? Mineral beneficiat­ion value chains should include gold ore to bullion processing.
Mineral beneficiat­ion value chains should include gold ore to bullion processing.
 ??  ??

Newspapers in English

Newspapers from Zimbabwe