Unpacking “Open for Business” A-Multi-stakeholder conversation with the

Minister of Finance

9 April 2018
Monomotapa Hotel

Discussion Notes

1. Introduction

YETT participated and gave a presentation during a multi-stakeholder dialogue meeting that
was convened under the Zimbabwe Dialogues which are coordinated by Zimbabwe Institute
and Centre for Peace Initiatives in Africa. The aim of Zimbabwe Dialogues is to build a space
of debate that supports the development of a more inclusive and solution-oriented political
culture. Zimbabwe Dialogues is a national platform that provides a safe space where policy
makers and opinion shapers emanating from key stakeholder groups can have an evidence-
based, objective and solution-seeking dialogue on important policy issues affecting
Zimbabwe’s development. The dialogue was primarily focusing on providing stakeholder’s
views on the mantra of Zimbabwe is open for business but also provide opportunity to
learn the conceptualisation of government and its plans in executing this. These discussion
notes capture the critical issues including an almost verbatim presentation of the delivery by
the Minister of Finance Mr Patrick Chinamasa.

2. Zimbabwe’s Economic structural issues and engines for growth

Dr Ndlela and Dr Kanyenze made a presentation on a discussion paper that was

commissioned by the Zimbabwe Institute. The objective of this research was to deliver an
evidence-based research paper that focuses on an analysis of the prevailing economic
situation and what needs to the done to execute an economic turnaround for inclusive and
sustainable growth at national and community levels.

In terms of strategic expected outcomes of Zimbabwe’s turnaround, a basic premise of the

paper is that over the past three decades Zimbabwe has undergone an unprecedented
structural disintegration in virtually all areas economic, institutional, social and moral fabric.

The present paper starts from the widely accepted research results suggesting that growth,
investment and productivity are positively correlated with macroeconomic stability (Easterly
and Kraay, 2000); and that private investment is significantly and negatively influenced by
uncertainty and macroeconomic instability (Ramey and Ramey, 1995).

Secondly, the paper is anchored in the twenty-first century structural change model based
on a ‘democratic developmental state’ whose critical components are, one ideological and
the other structural (See ECA, 2013). Its ideological underpinning must be
‘developmentalist’, in that its mission is to ensure high rates of accumulation and
industrialization, whereas the ‘structural aspect relates to the state’s capacity to effectively
implement economic policies. A critical factor of a ‘democratic developmental state, is that
the state relations can no longer be confined to ties with the private sector elite alone, but

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it must have an endogenous ability to use its autonomy to consult, negotiate and build
consensus with social partners.

Some of the issues that the paper suggested that government should do away
with include:
§ Fixation with short term considerations;
§ Institutional incoherence, policy inconsistency and overlap;
§ Runaway expenditure against contraction of the revenue base;
§ Recourse to deficit financing through issuance of TBs and RBZ overdraft facility;
§ Deteriorating governance indicators;
§ Estrangement from traditional development partners and processes; and
§ Fixation with political expediency and elite state capture.

The paper identified the following opportunities:

§ Vast strengths of human resource skill base and diverse natural resources
endowments- against major constrains a) weak governance b) lack of mineral policy
and legal framework c) weak institutional capacity;
§ Great agricultural potential- undermines by policy inconsistences and issues of land
tenure;
§ Fixable and still expansive infrastructure;
§ Potential to unleash increased efficiency in the economy to fuel rapid and sustained
growth; and
§ Post-Mugabe “new dispensation” as well as external development partner goodwill,
including the Zimbabwe diaspora.

The proposals the paper presented:

§ Rationalisation of expenditures and improving the expenditure mix;
§ Expedite State-Owned Enterprise (SOE) reforms;
§ Create fiscal space for development: accelerate re-engagement, expand the tax base,
reprioritise and enhance efficiency of expenditure and seek debt relief;
§ Accelerate cost and ease of doing business reforms and promote policy coherence
and consistency (adopt broad based indigenisation, bring land distribution to closure,
secure land tenure system- 99 year leases, and secure private property)
§ Enhance external arrears clearance, debt resolution and the re-engagement process
to facilitate access to external financing and strengthen national debt management.

3. Youth Perspectives on “Zimbabwe Open for Business”: Talking Points

YETT made a presentation to share the youth perspectives on the issue of open for
business and the following where the talking points:

1. Youth need decent jobs: For young people, the Zimbabwe is open for business
should simply translate to jobs. Thousands of youths are unemployed or
underemployed and in desperate need for decent jobs most for the first time in their
lives. The youth don’t just want jobs but they can deliver on the jobs given their
passion, innovativeness and levels of education.

2. If Zimbabwe is open for business it should first let its own citizens in:

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 § Diaspora: The huge diaspora should act as our first point of call both for financial
resources and skills needed for our economic turnaround.
§ Informal Sector: With an obvious growing but equally important informal sector,
there is need to ensure access to funding and technical support and enabling policy
environment for this sector. The empower bank for example needs to be
developmental and not political to avoid the pitfalls of the youth empowerment
fund.
§ Youth in Mining: With a solid ASM sector we should deliberately look towards a
locally driven mining sector especially for minerals such as gold were the ASM
sector’s contribution has been on the rise.

3. Let’s modernize our business investment model and thinking by learning

from the very economies that we are opening the country for business
§ Modern economies are driven by entrepreneurs who shape ideas for new products
especially in sectors such as ICT that then trigger the manufacturing capacity to drive
them- Technology giants Apple, Google, Microsoft, Facebook and the other comes
to mind. The key question is on how do we emphasize on technological transfer
rather than just mining and farming in an economic world order that has shifted?

4. In offering our minerals lets create opportunities for youth

§ As the country maintains an extractive driven economy it should at the very least
seek for investors in mining that are ready to offer employment to the locals. The
investors should come knowing that the country will give them both- our minerals
and the youth to work with and were they complain that expertise doesn’t exist
they should be encouraged to invest in capacity building and human capital
development through well-designed incentive plans.

5. Economic growth is a numbers games

§ leaving our youth and women behind in an economic plan is a recipe for disaster. A
read in the investment plan by the government does not convince One that these
strategic groups have been fully embraced. The numbers are essential both as human
capital and as a market.
§ giving youth employment opportunities unlocks massive value because as trends are
showing, millennials (today’s majority youth) are the biggest spenders in consumer goods
and they modernize economies with their new thinking that’s of today not yesteryear.

6. Open for business: government perspective on economic

recovery/creating a conducive environment
Hon Patric Chinamasa

The following bullet points are the issues raised by the Minister during the dialogue, they are
presented here as closest to verbatim as possible and in first person voice so as to present
his contribution as factual as possible without own analysis:
§ There is an asymmetry of information and we should be at the same level of
information
§ I hold an open mind and believe strongly that no one has monopoly of ideas to move
the country forward
§ There is no sufficient realization that there are no miracle solutions to revive the

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 economy and we need to do a step by step process
§ We should be clear on our priorities and no short-term considerations
“shortermism”
§ An economy including ours should have a structure where 90% is owned by
domestic players and investors and if we don’t work there is no bases for foreigners
to ride on; from outsiders, we should look at that which we lack
§ The state of our economy is the prize we have paid for embarking on the land
program (we cannot hide away from the past)
§ The history of the sanctions is why the president is pushing for the normalization of
the relations with those that have sanctioned us to ask for a process towards the
lifting of sanctions
§ Because of sanctions we have not be able to honour our foreign debts and now we
are focusing on political engagement which will make other engagements work
§ The UK - Zim relations are very essential for the country
§ The other leg of engagement is with bilateral and lending institutions so that we
reach an arrangement for new money; we need lines of credit we don’t have lines of
credit from traditional capital markets
§ We should never say we do nothing because of sanctions
§ When president (Mnangagwa) says Zimbabwe is open for business he is saying we
want to put our house in order to promote internal and external investment- it’s an
acknowledgement that we have not been promoting a good environment
§ Critical issues: agriculture- fiscal deficit, low productivity, low exports, what export
receipts buy- is what we import necessary to drive this economy, to build reserves
§ Government has given focus to Agriculture because of how it supports 70% of the
population with their livelihoods (command agriculture). What is important is to set
up infrastructure that enables us to manage periodic droughts- these are for
communal and A1 with a goal to cover over 200 hectares under irrigation, and also
ensuring we open to markets.
§ Our silos are full and now we need to see how we create markets.
§ Agriculture should ensure backward and forward linkages
§ We need to address the informal economy there is only about 500 000 people in the
formal economy which makes it difficult to collect taxes. Unless we formalize, it is
difficult to collect the much-needed taxes- currently government is making efforts to
provide some shell shops and factories
§ Our education has been academic and not skills focused and we need to shift for
STEM that is why focus on the national budget is on vocational training Centres, we
plan to have a VTC in every administrative district in the country- the old economy
is gone- now we are looking for some new seeds spouting
§ We look forward to a private sector led growth and that’s why there is focus on the
ease of doing business and protection of property rights
§ We are seeking modalities of providing compensation and also ensure we come up
with new boundaries so as to ensure security of tenure
§ After the government took over none performing loans the banks have been more
stable although now they are very weary of landing
§ We can’t run the economy without borrowing but what is key is what the money is
used for. Consumptive borrowing is the problem
§ We need to develop irrigation, we have about 10 000 storage dams which are not
linked to farms- we need to address this for agriculture and this should be informed

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 by feasibility studies and reorganization of the farms and boundaries
§ We don’t have resources from the national budget to develop infrastructure so we
will rely on borrowing
§ We need to improve on budget planning and management as well as institutional
capacity
§ “I see no room for retrenching teachers, nurses and all” so there is a challenge of
ensuring cost reductions through retrenchments but maybe redeployments- a more
concrete solution is to grow the national cake
§ Rule of law is essential and there must be equal access to legal system and that is
what makes Zimbabwe open for business
§ Citizens should ventilate their grievances
§ Rule of law goes hand in hand with human rights
§ Our institutions should be accountable to the way it handles business
§ We must enhance the oversight capacities of institutions
§ We should ensure that we have a Inclusive, responsive and accountable public
service
§ It’s important that we have national cohesion and what links us to each other is that
we are citizens of the same country and no citizen should call harm to the country
§ I do listen but sometimes it is not always possible to satisfy everyone at the same
time
§ It’s important that everyone has a share on decision making
§ Social services: our biggest asset is not natural resources but our people and it is
important that we develop human capital- we want to deploy more resources to
health- in the 2019 budget we want to reach the Abuja declaration 15%. We have
been borrowing from China to address water and sanitation. Food security and
nutrition are key. We need to address energy, logistics and transport for both urban
and rural areas
§ Policies to promote independent power generation (examples in Honde valley and
Chipinge)
§ ICTs need to be enhanced to create employment especially for youth
§ Environmental issues are essential to redress impact of degradation and climate
variability
§ Women and Youth: 5.8 million people are employed in the informal sector; people
in the informal sector are not bound by labour laws, we need some degree of labour
flexibility which allows people to downsize and upsize depending on the business’
profitability
§ Diaspora: should bring back capital and special skills
§ When we say Zimbabwe is open for business we mean “We are going to do
everything in our power to remove all obstacles that stand in the way of economic
turnaround”
§ I wish the mutual respect and spirit of working together which is exhibited in
parliament is replicated elsewhere so that we move collectively

A summary of Emerging issue by Dr Shingi Munyeza

After Discussions Dr Shingi Munyeza gave a summary of the emerging issues and these
are as follows:
1. National shared vision- there is talk of having a social contract. When a good

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 thing is done wrongly it does not mean it's a bad thing. We should be a country
rooted in a shared vision and not shared election. The Zimbabwe we want and
issues of constitutionality.
2. Governance and constitutionalism as critical. There is need to resource the
commissions.
3. The economy we want: Growth must be balanced with development;
Autonomous from interest groups; Deficit funding; Government structure to
drive the economy; Need to grow the cake; Inequality in benefits to be
addressed and Audited public service.
4. The leadership we want: Value driven not personality driven; Never a
Mugabe era again; Transparent and accountable leadership; Lead under the law
with the law; Leadership that listens and acts on the need of the people; Inclusive
leadership with no toxicity and polarization; Multi and inter-generational; Equality
driven and reduce the male dominance model as women continue to suffer;
Cohesion for peace and fights Against corruption.
5. Wealth creation: Unlocking human capital; Incubation and
entrepreneurship; Unlocking resources; Modernised infrastructure; Resourcing
OF RBZ; Infrastructure strategy; Local linkages with global impact; Confidence
building what should be done to bring back local currency; the destructive role
of the government in private sector should be addressed.
6. Wealth distribution: Poverty eradication; Food and nutrition; Education and
Health as critical aspects that need government financing.
7. Protection of people’s rights during Zimbabwe is open for business and that it
should be government that is open for business not just saying Zimbabwe in
general.