Chinamasa`s resorts to fire-fighting as the economy withers

Finance Minister Patrick Chinamasa

At last ZIMASSET is working, albeit in a disastrous fashion!

You know an economy is bleeding to death when out of every $1 the government collects as revenue, $0.97 goes to pay its 298 000 civil servants. Put simply, Chinamasa`s government is spending 97% of GDP on the public service. If this is not disastrous, tell me what is!

But this is not a revelation; we all knew this before didn’t we? But what beats me is the fire-fighting strategies proposed by Chinamasa, the Minister without finance. What is dreadful is that all the job cuts and the economic reign of terror is meant for the political survival of one man and one man alone- Robert Mugabe!

There is more to it than what Chinamasa presented as a mid-term fiscal review last week: ZIMASSET was framed by fools and therefore a complete failure, the national purse is broke, the state cannot tax more than it is currently doing, the economy has an astronomical budget deficit and the economy will not grow at all in the near future (at least as long as ZANU PF is in power).

The ZANU PF thugs and their little guys called ministers will never listen. We tell them every day but no one listens. We tell them that no amount of fire-fighting strategies will save Zimbabwe but they never pay attention. The Zimbabwean economy needs the productive and supply side of the equation to be raised by a massive financial injection of not less than $10 bln which will see industry, factories and plants back up again. When this happens, Chinamasa will not need to worry that much about the demand side of the puzzle (austerity such as job cuts, bonuses and taxing of allowances).

Zimbabwe`s economy is bleeding because of twin problems: the country lacks the capacity needed to solve its problems because of many years of mismanagement by a parasitic state and legitimacy.

It a good topic for a thesis research that as long as the ZANU PF monster is ruling, Zimbabwe will never get out of its economic problems. No amount of fire-fighting and peace meal policies from Chinamasa will ever save Zimbabwe. This is precisely because normal economic interventionist strategies will not work when applied to an abnormal and unconventional Mugabenomic state presided by Chinamasa. It is only when ZANU PF is uprooted and cluttered on the floor that any normal economic solutions can be applied to the fading Zimbabwean economy.

Chinamasa`s recent mid-term budget review pronouncements has revealed one thing: Zimbabwe is broke and is a thoroughly shaken economy that is on the verge of fading away.

Let`s take the memory lane a little. Soon after the 2013 vote, when ZANU PF`s “won” the election with a “landslide” victory, Chinamasa and his ZANU PF were told: You an rig the vote, but not the economy. If anyone did not dispense of what this meant then, well, now all the pieces of the jig saw puzzle are fitting perfectly well.

History has a funny way of smuggling itself back into the present. Thus, whatever you say or do, it has a way of coming back to haunt you. During the previous few years of the Unity Government, the then Minister of Finance, Tendai Biti, warned that there is no money to finance the 2013 vote. He was ridiculed by Chinamasa, his nemesis, who said:

“Biti should be more creative. All the money that has been raised, I have been forced to almost act like I am a Minister of Finance to raise resources from elsewhere and tell Biti there are monies coming to your treasury. In fact, he should be doing that himself. However, there is no problem with our capacity financially or otherwise.”

That was when Chinamasa was Minister of Justice. It was easy to criticize Biti who had the state`s purse. Chinamasa paints a picture in which he is that hardworking minister, to the extent that he has to help Biti out. Zimbabwe has no problem with capacity whatsoever, he says. Sadly, Chinamasa is now in the same situation as Biti before, worse even.

And his solutions? Cut 25 000 civil service jobs from the current 298 000 and save $335 mln, cut bonuses over a period of 24 months and save $180 mln, close some embassies etc.

Too little too late

Chinamasa`s mid-term fiscal policy review revels one crucial truth: ZANU PF government`s proposal to retrench 25 000 will not go anywhere near solving the gigantic problems Chinamasa face. Cutting 25 000 jobs is just too little an action considering the weight of the problems.

The total amount to be realized from these austerity measures, however, is a far cry from the total amount that Zimbabwe owes in terms of foreign debt alone. Too little too late, Patrick!

Downsizing the workforce and sending some ambassadors home is just a drop in an ocean: something big, something gigantic is needed if the root cause of the problem is to be solved. Something has to give! 25 000 is a clearly measly number, Patrick, considering the enormous problems you face. How does cutting 8% of the total wage bill help solve your problems, when any figure above 56% is internationally ridiculed as economically unsustainable? After retrenching these, your government will still be broke and worse, you still won`t be able to pay those lucky to keep their jobs on time. Man, what other choices do you have?

Things are going to get much ugly for Patrick very soon. It is rudimentary economics to know that efficient and viable economies spend no more than 43% on the civil service wage bill. For Chinamasa to tell the nation that his government is spending 97% is suicidal!

What is missing from Chinamasa`s pronouncements is how the retrenched will be expected to fare in an economy whose unemployment rate stands at anything above 90%? Has Chinamasa thought about the retrenchment package for the 25 000 his government plans to dumb? Has Patrick though of cutting down on the High Priest`s globe-trotting habits and how much money this will bring to the treasury? Has Chinamasa took into consideration more practical and punitive ways to deal with top class corrupt ministers like Mandiwanzira, Kasukuwere, Chombo etcetera and how much his ministry will gain? What about trimming the cabinet to manageable levels and send home all those deputy ministers and the many directors in various ministries and parastatals? Can the economy do with 220 members of parliament and all those provincial ministers? What is the value of having an indigenization ministry that employs dozens of people when there is no economy to indigenize?

Has Chinamasa seriously considered the egregious and awful ramifications (both political and economic) of his proposed fire-fighting “solutions” to an endemic economic problem? Has the High Priest approved of these measures, knowing last year he shot down Chinamasa`s proposed bonus cuts? What plans are there for the 25 000 civil servants who will be sent home by Chinamasa? Sell airtime in the streets? Is Chinamasa not adding 25 000 more hungry and angry mouths to join Tajamuka and other such politically disenchanted groups?

You cannot serve two Masters

You cannot serve two masters; it`s either you will hate one and like the other. Is ZANU PF caught in a catch 22 scenario? On one hand, ZANU PF would not want to retrench 25 000 civil servants ahead of a crucial 2018 vote that is no more than 20 months away. On the other, the mafia regime is clearly in dire need of a rescue package and fresh lines of credit from one Good Samaritan wherever he can be found. Will they risk the 2018 vote in order to please the IMF just so they get fresh financial injections?  It seems the 2018 vote will be sacrificed (knowing the chance to steal the vote is there, given a weak opposition and the absence of any electoral reforms).

The political end game

If you understand the politics of end game, what Chinamasa has done is expected. It was coming; there is nowhere for him and his ZANU PF thugs to hide anymore. Chinamasa is doing what ZANU PF never wanted to do in the first place (consider ZIMASSET and the promise of not less than 2 mil jobs!).

The argument here is that Chinamasa knows that the state has completely run out of levers to pull the nation forward. That is why the High Priest recently made the threat that (directing the threat to protestors and demonstrators), the government`s patience has been stretched to the limit. As if government/ZANU PF has the monopoly of patience!

The truth is that, while pretending to address the problems, Chinamasa is throwing at least 25 000 hungry people into the streets (in reality, Chinamasa needs to retrench at least more than 150 000!), where Tajamuka and others will gladly welcome then into their ranks. There, their patience will also be stretched to the deadliest limit. There, the High Priest will be disappointed.

It`s naïve to expect too much from fools

Immediately after the elections in 2013 I wrote a piece in which I hypothesized that ZANU PF`s promise of 2.2 mil jobs was a fluke. This was not by any means a revelation. By October 2013, it was evident that the economy could not expand even by an inch, let alone offer 2.2 mil jobs. My analysis was basically based on the premise that by that time, the economy was crying for an urgent cut to the national budget.

At some point, there is need to accept that we are being led by fools; and because of that fact alone things won`t work at all. They promised what they knew they could not deliver. Now the country is in a desperate situation, the High Priest and his ZANU PF maggots threaten citizens with unspecified actions if they exercise their legitimate right to peaceful protests.

Chinamasa and ZANU PF fools can bury their heads in the sand and pretend everything is going nice. But the horoscope is predicting otherwise. Only the discovery of some very, very precious metal, something like the Tanzanite; something more precious than diamonds, in the next few months, can serve Zimbabwe. And when it`s discovered, no one must be allowed to loot even a bit (not even Supa Mandiwanzira, Chihuri, Shiri nor Chomo), not even $15 bln should be allowed to disappear; every single cent must go to the treasury. Only then, can Zimbabwe be saved.

There is nowhere to hide for Chinamasa as the economy is imploding in his face. He will soon realize Biti was in a much tenable situation when he himself was hiding in the ministry of justice, pretending he knows everything.

Zimbabwe needs an urgent capital injection. But no one will bail out a lender who is notorious for not paying his debts, including the Chinese. I repeat what I have said in countless pieces before: the problem is political, the solution is political. The long and short of it is that there is a leadership crisis in Zimbabwe. Only a change of government and a restoration of legitimacy can serve Zimbabwe. The big fool and High Priest at State House should make way. Someone wrote that politicians and diapers shares one thing in common. They both should be changed regularly for the same reason. If you do not feel the same with Chinamasa and his ZANU PF

To illustrate in a simple way how our country is run by a bunch of fools, consider the tables below:

National Budget 2016: Revenue Collection & Expenditure

Revenue Collection and Expenditure, January-June 2016

You can make your own conclusions. But it is clear Chinamasa been collecting much less than he promised he would collect as revenue. Second, he has let the country eat more than we have hunted. By way of looking ahead, the negative figures (shortfalls and borrowings) will surely double by the end of the financial year. By year end, it is clear that Chinamasa will be riding on an annual deficit that gobbles 35% of its revenue collection. Chinamsa and the ZANU PF hooligans have survived this far because of their raiding of RTGS and issuing treasury bills! But this has a time limit. In the long run, Chinamsa can only survive by introducing the bond note, sooner than later!

And when Patrick said on September 8 that government cannot pay its soldiers and its own police anymore- that’s a screamer!

This time the cumulonimbus clouds are bringing the rains.

Tichatonga Mangwana is a researcher based in Nairobi, Kenya, at the Institute of Research and Development. He strongly believes that the long term solution to Zimbabwe`s problems is a change of government and that this change has been hampered thanks to a weak opposition re: the absence of visionary opposition leadership and an opposition that has failed to fight for genuine electoral reform.