Vince Musewe Towards Vision 2030
ECONOMIC growth and development cannot be achieved without the availability and provision of appropriate economic and social infrastructure. The need to improve the quality of infrastructure services in Zimbabwe is, therefore, the cornerstone of achieving the economic growth objectives of Vision 2030 and beyond.
According to almost 25 years of academic research on the impact of infrastructure on growth, the reality that infrastructure matters to growth is now acknowledged worldwide but may not be fully understood. How much, specifically, and which infrastructure matters when to output levels and their growth in developing economies such as ours is not yet clearly settled.
In general, infrastructure is defined as electricity, gas, telecoms, transport and water supply, sanitation and sewerage. While there is a reasonable agreement on how much infrastructure matters to growth, there is much less agreement on which infrastructure subsector matters the most under which circumstances.
In coming up with our infrastructural development plans it will therefore be important that we seriously consider the best model for our circumstances.
There is, however, no doubt that direct investments in infrastructure create new production facilities that stimulate economic activity and growth, reduce trade and transaction costs thereby improving competitiveness and provide new employment opportunities.
The recently announced Transitional Stabilisation Programme (TSP) recognises that functional public infrastructure remains a key enabler to unlocking economic growth potential, increase competiveness and productivity, whilst equipping public services to meet demand. In this regard, the TSP prioritises quick-win projects in energy, water and sanitation, ICT, housing and transport, with focus on expediting completion of ongoing infrastructure projects, that way contributing to the revival of the economy.
In order to achieve this, the Transitional Stabilisation Programme is therefore targeting increasing the budget on capital expenditures from the current 16 percent of total budget expenditures to over 25 percent, beginning from the 2019 and 2020 fiscal budgets and has identified key infrastructure projects for that period. However, fiscal capital formation will be hardly adequate to meet our infrastructure needs.
In 2011 the African Development Bank published a comprehensive report on the state of infrastructure in Zimbabwe, the challenges and the opportunities it presents. In this report is the proposed action plan for the rehabilitation of our infrastructure as follows:
Full rehabilitation of the national power grid and by 2020 addition of new generation capacity required to sustain strong economic growth;
Rehabilitation of a large part of the national road network;
Rehabilitation of the railways network and restructuring of the industry through the creation of a new public entity that would own, maintain, and manage the basic track infrastructure, the restructuring of the National Railways of Zimbabwe (NRZ) into a privatised railway services company and the award of concessions for freight and passenger services on the entire rail network;
Early action to upgrade the status of air traffic communications and safety in Zimbabwe to a standard consistent with the requirements of the ICAO, the award of concessions for the upgrade and operation of the Victoria Falls and Buffalo Range airports to promote the growth of tourism, and the rehabilitation and upgrade of the remaining nine airports that would continue to be managed by the Civil Aviation Authority of Zimbabwe (CAAZ);
Substantial investment in storage and transport of water resources to meet increased demand from agriculture, industry and households;
Rehabilitation of the existing water supply and sanitation infrastructure and improvement of services in urban and rural areas to ensure that the MDG goals for the sector are met no later than 2020;
Development of a national communications grid for ICT based on a fibre-optic network linked to the submarine cables now in place along the eastern seaboard of Africa. The grid would lay the foundations for a major expansion in access to reliable communications at reasonable cost for a majority of Zimbabweans, the business community, government and civil society;
A substantial programme of institutional reform and strengthening that includes measures to streamline the regulation of basic infrastructure services, promote private investment in infrastructure assets and services, as well as training and other capacity building measures to expand the skills required within the public sector for continued effective oversight and management of the basic infrastructure of the country.
Some progress has been made to date on some of the above, but what will be key is our ability to raise further long- term funding for infrastructure development. According to the same report, Zimbabwe would need about $14 billion to address its infrastructure needs. The Government will therefore be seeking to float infrastructure bonds as a means to supplement the fiscal capital formation budget. In addition, the private sector and investors can participate directly in infrastructure projects through PPPs.
Any infrastructure development must be in tandem with an industrialisation policy in order to maximise benefits therefrom. Zimbabwe requires a rapid modernisation and industrialisation strategy and this again will require some serious investments.
The TSP also looks at the necessary productive sector reforms to expedite economic recovery and these include: sector-based GDP growth targets, the transformation of agriculture, increased investment in mining exploration and development, resuscitating and re-tooling industry and lastly sustainable protection the environment.
The overall economic growth in 2018 is now projected at 6,3 percent driven mainly by agriculture, mining, services and construction sectors.
In order to ensure that these growth objectives stay on track what will be critical is stability in our financial markets and increased liquidity. Currency reforms will play a critical role to ensure some stability and increased investment inflows.
Clearly the task ahead will not be an easy one but will require serious efforts from both Government, the business sector and labour. In my opinion it is critical that a stakeholders summit be held so that a social compact can be agreed upon in order for all of us to pull in one direction.
We will not be able to attract the billions we need as long as we appear disorganised and divided as a nation. Political contestation both within and among our main political parties unfortunately continues to hold our progress back and this needs our urgent attention.
Vision 2030 is certainly achievable given our resource base but we will have to be innovative in how we re-package ourselves and offer value to potential investors.
The 2019 National Budget should give a good indication on how we intend to implement the strategies articulated in the TSP. However, more important will be the political leadership and political will to address those critical issues holding us back. I have no doubt on the political will.
Zimbabwe will rise!