All win if Govt, business work together

14 Dec, 2018 - 00:12 0 Views

eBusiness Weekly

The relationship between the Government and the private sector, especially the major companies, has often been bad to the detriment of Zimbabwe and its people.

No one expects, or for that matter desires, total agreement. A Government is elected by all the people to serve all the people while the business leadership has in many ways a far more limited constituency. There must be and will be in any honest relationship disagreement.

But that does not mean that the relationship has to be antagonistic nor should the Government and business leaders ignore each other, a more common and more dangerous state of affairs. Sometimes business leaders tend to see themselves as independent as they battle to run their companies and all too often only enter public debate to make simplistic statements or requests concerning matters that directly affect them, rather than trying to take a more global view. Sometimes the Government brands all business leaders as accomplices in the stupid, selfish or criminal policies of a small minority or simply treats them as part of the tax-paying furniture. A more robust and interactive approach is needed.

What can be achieved and is needed is exemplified by the statement that the chairman of the forum grouping the 63 listed Zimbabwean companies and former CEO of Delta Corporation, Joseph Mutizwa, made earlier this month when invited to address the United States Senate Foreign Relations Subcommittee on Africa and Global Health Policy.

His statement was generally supportive of common goals and he was exceptionally clear on the need to repeal the US Zimbabwe Democracy and Economic Recovery Act (ZIDERA) but he was no Government mouthpiece.

That statement deserves a wider readership, coming as it does from someone who has seen it all and now, despite his directorships and consultancies, has time to think through and assess Zimbabwe’s policies and requirements. Mutizwa climbed the corporate ladder in the 1980s and 1990s, took over Delta as hyperinflation accelerated and devastated the economy, then grabbed the opportunities in 2009 and rebuilt, re-equipped and, crucially, expanded his company. Delta defeated the influx of imports not by seeking protection but by producing better products at better prices.

Mutizwa did not mince his words, refrained from platitudes and gave an assessment of the pressures facing President Mnangagwa’s Government, its policies and their implementation that was fair, sober and reasonable.

He was careful to state that business, as a grouping, was apolitical. But by this he meant that business accepted the Government elected by the people. He certainly feels that this does not mean passive and silent acceptance of Government policies and their implementation; business obviously can and should have input.

He did not dwell much on the past, although he made it clear that by following short-term populist policies the Robert Mugabe Governments had, over 37 years, devastated the economy in many ways and that it would take years of effort and hard word to recover.

President Mnangagwa and his Government obtained much higher marks, although Mutizwa was not handing out any A+s and not that many As. He outlined the achievements: agriculture revitalised, mining expanding, the first dribbles of foreign direct investment, the legal changes in the indigenisation laws that made such investment possible, the removal of the racial elements in the land policies, the appointment of active technocrats to head the crucial economic ministries, the start of fixing the fundamental economic problems in fiscal policies and the drive against corruption, and the opening to the world.

He analysed the problems facing the country: industry over dependent on imported inputs and a negative balance of payments.

And he, unlike many observers, paid a great deal of attention to the human pressures. Zimbabweans were expecting a quick recovery, which was impossible, and also, in view of their history, inclined to overreact as was seen in October this year.

He was, in general, supportive of Government policies but dwelt on both the speed and sequencing of their implementation. On speed he wanted to see rhetoric converted into action at a brisker pace. On sequencing he thought there was need for more thought.

For example he thought the new taxes important and needed but also thought the Government could have diminished opposition by announcing the cuts in Presidential and Ministerial salaries before announcing the taxes, rather than the other way round.

He also warned that a “big bang” economic reform could wreck the country and destroy progress and that the correct step-by-step sequencing of reform was required, but again with continuous movement rather than talk.

He provided one of the best analyses of the devastation of the sanctions imposed by the US and European Union, a subject that has generated a lot of smoke. Again he did not dwell on the past except to acknowledge that a fair amount of economic damage was self-inflicted, but he became quite vehement that ZIDERA was a serious obstacle, perhaps the most serious, to rebuilding the economy.

Although proponents of sanctions by the US and EU claim they are targeted against a few score individuals and the odd institution, Mutizwa explained and detailed the immense collateral damage. Simply by being in place Zimbabwean businesses are denied the normal lines of credit that oil trade and although not targeted find it impossible to access finance from American and European banks because of a perceived risk factor.

In his submission he stressed that the single biggest stroke of support the US could grant the Zimbabwean reform and recovery process would be to repeal the Act, in other words get off Zimbabwe’s back, although more active support would be welcome. Here the top echelon of the private sector and the Government are in total agreement. We can only hope that the US Senate sees the point.

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