HARARE – The country’s business community says the post-election government should be clear in policy pronouncements to attract lines of credit necessary for the revival of the ailing economy.
Zanu PF recently got a two thirds majority in Parliament and its candidate President Robert Mugabe won in the just ended presidential elections raising fears the party would pursue populist policies to endear itself with the electorate.
The outgoing Prime Minister Morgan Tsvangirai’s MDC-T party is challenging Zanu PF’s victory in the courts and the matter is set to be heard on Saturday.
Despite the court challenges, business leaders say clarity in policy pronouncement is key to unlock investments inflows.
Confederation of Zimbabwe Industries (CZI) president Charles Msipa told BizDay that the immediate task of the new government was to attract capital inflows needed to revive the comatose economy.
“Our economy has not attracted adequate inflows in the last four years,” he said. Msipa said various sectors of the economy needed long term funding which was not available locally.
Renowned banker and BancABC group chief executive officer Douglas Munatsi told an analysts briefing on Wednesday that the new government has to focus on the growth of the economy.
“We think that hopefully our political leaders will come to a point where election and election issues are behind us,” Munatsi said adding that as the business community there was need to engage the new government.
On the indigenisation policy that has rattled investors, Msipa said the new government has to balance between the need to empower locals and the desire to attract foreign direct investment (FDI).
“We need to recognise sectors that require capital or technology that we do not have and need to exploit that. We need to be able to make an allowance for those sectors to attract FDI,” he said.
Msipa said there was need to harmonise indigenisation and investment laws so that they are not in conflict.
Munatsi said government should also bring clarity on the indigenisation policy. This comes amid conflicting statements from the ministry of Youth Development, Indigenisation and Empowerment and the Reserve Bank of Zimbabwe (RBZ).
The RBZ says the banking sector is indigenised and those willing to join the industry should apply for banking licences. The ministry of Youth Development, Indigenisation and Empowerment says it is merely implementing the law.
Munatsi called for discipline in spending saying government should make the first step by having a lean cabinet.
President Mugabe is set to appoint a new cabinet amid fears by analysts that it might be bloated to accommodate loyalists and balance factional and regional matters.
The new administration has to fund added responsibilities brought about by the new Constitution. The new Constitution created provincial councils that are autonomous and other commissions.
Outgoing Finance minister Tendai Biti recently said that the new government required at least $4 billion up to December to fund pressing commitments.
“Democracy is expensive,” Msipa said adding that government has to generate enough revenue to finance the bureaucracies.
He said new revenue sources would be realised if the manufacturing industry is operating as per the installed capacity through taxes.
“The key to unlock further revenue is higher levels of economic activity,” Msipa said.
The manufacturing sector is operating at 44.2 percent capacity utilisation.