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Africa |
DEVELOPMENT
Although Africa is always teeming with negative news for the first time in many years, there is hope for positive change in many parts of the continent. Many countries are showing signs of economic progress, underlined by sound economic policies and structural reforms
Let’s take a look at some countries. Mozambique has been growing at an unprecedented growth rate of 10% on average over the past few years. In Botswana, export trade surplus increased by 12.2% in 2000, while foreign exchange reserves increased by 17% during the same year. The country currently boasts of foreign exchange reserves representing three years of import cover.
In both cases, studies show that the countries have successfully cut domestic and external financial imbalances, enhancing economic efficiency. They have made the best possible use of their natural resource endowments. Not least, they have given greater priority to public spending on health care, education, and other basic social services.
In addition to this, the countries have to a greater extent moved towards more open and participatory forms of government that encourage co-operation between the state and civil society.
Zimbabwe — an exception
But James Jowa, the Zimbabwe National Chamber of Commerce (ZNCC)’s chief economist is saddened by the fact that while the rest of the region has moved on, Zimbabwe has lagged behind — moving backwards — and continues to wallow in economic, political and social doldrums.
Jowa says economic reforms have stalled. The country lacks a credible economic reform programme, a factor Jowa says is likely to jeopardise the country’s eligibility for the newly signed Cotonou Agreement, which replaced the European Union-African, Caribbean and Pacific Agreement. Investment in Zimbabwe remains subdued, limiting efforts to diversify economic structures and boost growth.
Jowa says the embattled nation’s challenge is to raise economic growth, reduce poverty and to seek to be readmitted into the regional and world economies.
He says: «Zimbabwe’s economic real growth rates over the years have not been high enough to warrant a real dent in the pervasive poverty and enable the country to catch up with other economies. What is needed is a sustained and substantial increase in real per capita growth rate, coupled with improvements in social conditions.»
Zimbabwe’s Finance and Economic Development Minister, Dr Simba Makoni, unlike his head of state, Robert Mugabe, is convinced that the economy is in crisis, and poverty is spreading at an alarming rate. He said recently: «I would have to be foolish to deny what is evident to everybody in broad daylight, even in the darkness of night — our economy is in crisis. The impact of poverty on ordinary Zimbabweans is severe, and poverty is entrenching at a rate that is very alarming.»
According to Dr Makoni, Zimbabwe’s economy has deteriorated progressively since 1997, in comparison to those of Sub-Saharan Africa and the rest of the world. Her estimated growth rate in 2000 was minus 4.2%, and compared unfavourably with the 3.4% for Sub-Saharan Africa, and 4.7% for the global economy respectively.
The state of the economy is summed up by persistently high interest rates and inflation, fuelled by high budget deficits and deteriorating terms of trade, leading to acute balance of payments problems and a chronic shortage of fuel and foreign currency.
Key Western donors, among them the International Monetary Fund (IMF) and the World Bank, have pulled out of the country due to differences with government over the land reform exercise and Zimbabwe’s involvement in Congo RDC‘s war.
Jowa says it is the duty of Parliament to make sure that government focuses on delivering essential public services, as well as to enhance growth performance.
Mugabe has vowed the economy will not collapse, despite clear evidence to the contrary.
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