THE Confederation of Zimbabwe Industries (CZI) says coalitions between the government and business that existed between 2013 and 2015, when the country was pursuing economic development through the ZimAsset blueprint, should be reinstated to buttress current efforts to revive the economy.
Speaking during a plenary session at the Institute of Chartered Accountants’ 2021 Winter School recently, CZI’s chief executive, Sekai Kuvarika, said it was crucial for the country to figure out how to position the business community in its economic development agenda to achieve sustained stability and recovery.
“There is a need for the establishment of economic growth coalitions between the private sector and government, the likes of which was attempted by the previous administration under the ZimAsset economic development blueprint.”
She said the first iteration of this model failed because there was no clarity on what respective constituencies were accountable for in those fora.
Zimbabwe ‘s economy last year shrunk by an estimated 4,1 percent amid major disruption to business activity by the Covid-19 pandemic.
This year, the economy is expected to rebound with a growth of 7,8 percent on the back of a better 2020/21 rainfall season and higher international mineral commodity prices.
Crucially, there has been a stable macroeconomic environment since June last year, when the Reserve bank of Zimbabwe escalated its monetary targeting framework and introduced weekly foreign currency auctions.
The southern African nation’s annual inflation fell from 838 percent last July to 56 percent in July this year.
Kuvarika said stabilisation is essential to the economy right now because “we are coming from a protracted period of economic decline and instability”.
“If you look at Vision 2030, NDS1 and NDS2, sector development policies and our businesses are all dependent on whether we are able to sustain stability in the economy. And this is the stability that will anchor the recovery and growth that we are looking for,” she said in the plenary session focusing on the economy.
She said the problem is an unfortunate perception the government has about business that it is a self-interested group, “which would take any rent-seeking opportunity that does not benefit the public.”
“And these perceptions are amplified when the economy is fragile or when the political economy is complex.
“And this is really a business-state relations problem. And the responsibility to dispel this perception rests with both sides.
“If this remains unresolved, it makes cooperation toward the common good difficult,” she said, adding that a harsh operating environment had worsened the problem.
“You will find that when there is a difficult operating environment, business ends up finding creative work-arounds.
“An obvious example of this is accessing foreign currency, where businesses have had to buy the greenback from the black market, which is essentially illegal.
“So, some of these coping mechanisms are, to an extent, the source of the mistrust between government and business,” Kuvarika said.
She said it is now important for businesses to participate in the development of social contracts.
“When an economy is coming from a period of decline and you are trying to recover, it is important that all the economic stakeholders are on the same page with what needs to be achieved and what will take us there.”
She said a major limitation in this regard is little participation from the respective constituent businesses that are represented by associations and unions.
newsdesk@fingaz.co.zw