OPINION: Only Decisive Action Can Stop Post COVID-19 Economic Turmoil

Journalist Brezh Malaba while writing for the Zimbabwe Independent has urged the government to take decisive action like scrapping the 2% tax and fully libraries the exchange rate to avoid an economic turmoil that the country might find itself in after the COVID-19 pandemic.

Malaba opined:

A couple of days ago, my attention was drawn to a short video clip showing the City of Harare’s
director of health, Dr Prosper Chonzi, explaining to Finance minister Professor Mthuli Ncube in a ward
at Wilkins Infectious Diseases Hospital how a life-saving ventilator works.

The respected physician described in simple terms how the contraption functions, while the Cambridge-trained economist displayed a disarming sense of enthusiasm in getting to understand the intricacies of
medical technology.

It got me thinking. Zimbabwe has no shortage of technocrats. With Covid-19 plunging the economy into unprecedented turmoil, these thinkers must now earn their keep. Chonzi has fared remarkably well in this crisis. You can tell that he knows exactly what is needed, but is sabotaged at every turn by a rotten and lethargic system.

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Ncube is expected to carry the weight of Covid-19 on his shoulders. He is no superman, of course, but Zimbabwe is deficient in solid leadership anyway and we must work with the spanners we have in our meagre toolbox. The huge task at hand is three-pronged: strengthening a decayed health sector, resurrecting a dead economy and averting a humanitarian catastrophe of apocalyptic proportions. Most people are currently focussed on the disease trajectory and rightly so but there is a spine chilling storm on the horizon.

We have to remind each other that Zimbabwe was already a broken economy before Covid-19. How we survive the ensuing tsunami will depend on the calibre of leadership as well as our willingness to roll up the sleeves and do the work. If the government continues with a “business as usual” approach, we risk massive economic dislocation, humanitarian disaster, a spike in crime and civil unrest. Riding the storm will not be easy. The government has no reserves and there are no deep-pocketed friends willing to bail us out. We are on our own.

Here is what this country needs to do. The 2% tax on electronic transactions must be scrapped. It is an immoral heist on the poor. Secondly, the exchange rate has to be fully liberalised. There is no transparency in the allocation of foreign currency in this country and we all know that sunlight is the
greatest disinfectant.

To avert economic chaos and what we are experiencing right now will look like a Sunday picnic if decisive action is not taken now the government has to show courage and uncharacteristic wisdom by embracing
a dual-currency system. More importantly, Zimbabwe is crying out for a political settlement. Prolonged questions of legitimacy and credibility have serious implications for the country’s ability to access the international credit markets. And without fresh credit, you cannot rescue this economy.

Social safety nets are vital, but the long term and sustainable solution can only come from rebooting the economy by creating policy certainty, availing credit to companies, sorting out the messy land tenure system, tackling corruption and re-imagining a new brand of national politics.

More: Zimbabwe Independent