Zim needs new land policy to save economy
Zimbabwe must radically overhaul its land-reform policy to revive the economy and retain membership in the International Monetary Fund (IMF), which has given it six months grace from threatened expulsion, analysts say.
The Southern African nation, in the throes of economic turmoil, faces a bleak future with inflation hovering at more than 250%, real unemployment pegged at 90% and an acute fuel and food crisis.
To add to its woes, the current agricultural season has got off to a sluggish start with prices of seed and fertiliser increasing significantly over those of last year amid poor distribution.
“Over the next three months, we have to put the crops into the ground in the face of every disincentive and problem,” economist John Robertson said.
“There is no fuel to transport the seeds to the farms, there is no fuel to run the tractors and seed and fertiliser stocks are scarce,” he said. “Next year’s crops will be a massive disappointment.”
Zimbabwe got a reprieve on September 9 when the IMF put off a decision to expel Harare for debt arrears by six months.
This was after Harare—in arrears since 2001—paid back $120-million of its debt. The remaining debt to the IMF now stands at about $175-million.
Minister of Finance Herbert Murerwa has announced that in line with IMF demands to cut public spending, he will aim at confining the Budget deficit to within 8,6% of gross domestic product (GDP).
Economists say the Budget deficit currently stands at between 12% and 14% of GDP.
The finance minister has spoken of “restructuring” the civil service to reduce the wage bill, currently 20% of GDP.
Murerwa also hinted at lifting price controls—which have led to scarcity and a flourishing black market—and implementing policies to stimulate investment levels from 4% of GDP to 25%.
Eric Bloch, an independent economist who advises the government, said the key lies in reversing Zimbabwe’s land reforms under which white-owned farms were seized and redistributed to blacks with no farming expertise.
Bloch said the government should return land to farmers to come in line with earlier agreements entered into in Paris and Abuja, stating that white farmers would be allowed to retain one farm each and not in excess of a stipulated size, while the reminder would be sold under a willing-buyer, willing-seller principle.
Zimbabwe launched land seizures in 2000 in which 4Â 500 farmers lost their property, with fewer than 500 remaining.
Bloch said “corruption is a major cause of inflation”, but stressed that if correctives are put in place, Harare could pay back another $50-million to the IMF in six months.
Robertson echoed Bloch in saying that the key to economic revival lies in putting “the land back in the marketplace”.
He said the new beneficiaries often stripped the farms of equipment and irrigation facilities to make a quick buck and then reverted to subsistence agriculture.
Tapiwa Mashakada, shadow finance minister of the main opposition Movement for Democratic Change party, called for a “total paradigm shift”.
“It’s high time that the government restore economic cooperation with multilateral lending institutions and pursue rational policies so that investment comes in,” he said.
But President Robert Mugabe, who has ruled Zimbabwe for 25 years, shows no signs of relenting even after the IMF move to postpone the decision on expulsion.
“The IMF has never been of real assistance to developing countries,” he said.
“It is wielded by big powers. We have never been friends with the IMF and therefore in future we shall never be friends with the IMF.”—Sapa-AFP