In quite a significant thumbs up to his intervention, Zimbabwe’s Finance Minister, Professor Mthuli Ncube, has had his Transitional Stabilisation Programme (TSP) graded positively; its ‘ambitious‘ and ‘credit positive‘. This comes from a respected international credit rating agency, MOODY’S Investor Services.
That matters greatly: MOODY’S is a world leader in the business of ranking the creditworthiness of borrowers, including countries and companies. Although this was not a credit rating of our country, a MOODY’S downgrade leads to increased costs of borrowing for that entity, and is therefore, bad news whenever it happens! So, in the midst of an uncertain economic situation in Zimbabwe, this is very good news. It really matters since investors actually ‘listen’ to MOODY’S!
That, in MOODY’S view, the delivery of the programme will “prove challenging”, is not a judgement of the professor’s ability. Rather, it’s damning verdict of our collective ability (or lack of) as a country and a people. Its a reflection of our past, and perhaps also, of our failure to clearly show that we have separated ourselves from the past. As the report says, our “… low Worldwide Governance Indicators suggest that (our) ability to implement such an ambitious programme is constrained…”
We have to be honest with ourselves: no matter how good something, we (Zimbabweans) will mess it up. We talk of having some of the largest mineral deposits in the world, yet, we never fail to sink deeper into poverty, whilst ending up without any significant minerals left. Even the reported potential for oil discoveries fail to brighten our hopes. We really can’t help ourselves.
Its never too late to change direction and do the right thing. Well done Professor. As Steve Jobs said, “… it doesn’t make sense to hire smart people and then tell them what to to … we hire smart people so they can tell us what to do …”.
We know what we want. We hired the Professor show us how to get there. We now have confirmation that he is indeed pointing us in the right direction, just as we asked. It is time for those of us who had doubts, or in some cases, those who spoke bad of the plan, to finaly get up (tails betwen our legs in some cases), and walk side by side towards our intended destination. May the rest of the Government please walk the walk too!
Our CONGRATULATIONS to the good Professor and his team for a job well done!
On 5 October, Zimbabwe’s newly appointed Finance Minister Mthuli Ncube launched the Transitional Stabilisation Programme (TSP). The 15-month plan, includes reform initiatives
to revive sluggish economic growth, restore order to the public finances after years of fiscal slippage and address chronic external imbalances that have left Zimbabwe with extreme
foreign-currency shortages. Although the TSP underscores the government’s commitment to restore creditworthiness, delivery on the programme will be challenging.
The TSP draws on the policy thrust from Vision 2030 and focuses on five strategic clusters: governance; macroeconomic stability and financial re-engagement; inclusive growth; infrastructure and utilities; and social development. The TSP is a high-level plan and, while it includes programme-implementation architecture and a relatively detailed set of implementation matrices, it will rely heavily on the ability of various government agencies and line departments to ultimately deliver on the ambitious fiscal consolidation and social development targets. Zimbabwe’s low Worldwide Governance Indicators suggest that its ability to implement such an ambitious programme is constrained.
The TSP’s growth projections target an acceleration to 6.3% in 2018 and to 9.7% by 2020, starkly more optimistic than the International Monetary Fund’s (IMF) latest projections that have growth decelerating marginally to 3.6% this year and rebounding to only 4.2% in 2019 (Exhibit 1). The expansion is supported by increased production in the agricultural and mining sectors, but scarce financing for private-sector development continues to hamper overall output. The stabilisation programme includes public spending supporting development, but securing financing for such expenditure in order to achieve such aspirational growth targets will be challenging.