On Professor Mthuli Ncube’s 3% 2020 Economic Growth Projection for Zimbabwe

Hope and optimism are critical ingredients for success. And Minister of Finance Professor Mthuli Ncube cannot be faulted for being optimistic that Zimbabwe’s economy will grow by at least 3% despite other economic experts pointing a shrinkage of as much as 13 percent during the same period. Quoting the International Monetary Fund, Zimbabwe’s Newsday (January 7 2020) said Zimbabwe’s economy shrank by 7 percent in 2019. Professor Ncube argues for a 3% growth based on the economy’s budget which he says is geared towards raising productivity in agriculture, manufacturing, mining and to reduce imports. This is all in an economy where salaries are problematic in that the salaries are denominated in a local currency where prices of goods, even though they are payable in a local currency, are pegged against the US dollar.
Everyone serious about Zimbabwe’s economy would wish for an economic growth even bigger than what Professor Ncube is projecting. However, the challenge is it is hard to envisage how an economy which shrank by a whooping 7 percent the previous year can suddenly record a huge jump to a 3 percent growth in the following year especially in the absence of the right factors to drive that performance. First, the country is facing a drought with at least half of the population requiring food aid. Then add to the serious rolling electricity crisis as well as the fuel challenges the country is facing.

It is possible that Professor Ncube may have a secret economic weapon he is going to use to make the 3 percent growth happen and miracles cannot be ruled out in life. However, by taking a basic systems thinking view, (Yes, an economy is a system, an open, complex system), if the economy shrunk by 7 percent in 2019, it is most likely that the contraction wave is continuing right now unless something drastic has been done to arrest and reverse the contraction. In addition, in many human systems, the rate of contraction increases over time due to systemic collapse. In other words, contraction has a tendency to accelerate itself over time as things fall apart the same way the collapse of a burning house intensifies and increases as the fire ingests the structure. Therefore, for the economy to then register a net growth of 3 percent, it follows that the growth must be bigger than 3 percent to counter the negative growth. To growth to a 3 percent through the economic shrinkage, the economy must grow at a rate of at least 10 percent. Given that negative growth is automatic and easier, it take a lot more conscious strategic input and execution dexterity within the whole economy to achieve the growth.

While providing a budget to stimulate economic productivity is necessary the budget alone, even with policies won’t be enough to drive the economy to deliver the expected growth. The Zimbabwe government has already stated a serious skills deficit identified through its own research. Even when questions arise on the findings of the report, it is still important to point out that expecting serious growth in an economy with serious skills deficit is a misnomer. How is Zimbabwe expecting to achieve its 2030 economic vision without closing the major skills deficit it identified? It is a fact that Zimbabwe’s education continues to produce highly articulate graduates but who have less of skills and much less of development, yet the economy is driven more by skills and qualities than by acquired knowledge.
Second, while economic policies make a difference in the economy if they are the right policies, policies are less effective if they operate in the absence of strategy. Zimbabwe still does not have a comprehensive, credible national economic recovery and growth strategy that all major stakeholders can relate to and use as a rallying point for economic action. Maybe the ministries have their own strategy plans but if the plans are driving economic performance then they need to be made public and also need the major players to have an input and to assume ownership. In addition, the area of strategy formulation and execution is a very dangerous one in that it is very easy to think that one has developed a strategic plan when one has developed either a basic operational plan or a half-baked output that will never amount to any tangible practical action. In the worst case, it is very easy to formulate a dangerous strategy and execute so well that the economy will fly at march 7 in the wrong direction, towards doom instead of towards destiny.

For Minister Mthuli Ncube, I can understand where he is coming from with the positive economic projections. Given his position and given that Zimbabwe and the world are watching him, he just cannot afford not to be positive and to be hopeful. If you accept the responsibility for taming an angry cobra, it is not easy to admit that your estimates of how easy it was to tame the cobra as well as how soon it would take were wrong. When you are watching a football game from the grand stands, soccer is a damn easy game and every player on the pitch is not doing a great job and you can do way better. Only when you get into the game do you realise that it is not as easy as you saw it from the terraces.
There are two things the Minister of Finance can do to shift things. The first option is going back to the drawing table, review the situation to date and see if there is a different strategic approach he can take to make dramatic shifts in the direction and speed of the economy. By consulting the right people in the economy, the Minister can find so many insights and notes with which to shift economic performance and results. Some of the answers are as obvious as the sun rises from the east. The second thing is to stop trying to prove anything to anyone and to be candid and open to the economic realities and tell Zimbabweans the brutal honest truth. A major problem the minister is facing is that he believes he has something to prove to Zimbabweans and so when his reality and that of the rest of the citizens is different, then he has to defend his reality and dismiss the reality of the citizens as well as that of others who may be seeing things differently. Maybe the perceptual shift where the Minister takes seriously considers the realities of those who are affected by government policy especially the ordinary Zimbabweans will go a long way to improve his situation because he then will no longer have to spend energy in trying to convince Zimbabweans to accept a reality they are not experiencing. The minister needs all his energy and attention on solving the herculean economic challenges the country faces. Embracing reality as viewed by other stakeholders in the economy will go a long way in liberating more of his energy. In addition, once the minister fully embraces the concept that all Zimbabwe needs is a complete accurate theory of how to shift things around plus a disciplined coordinated, committed execution of that theory, the rest will fall in place. It is as simple as that strategically. If Zimbabwe’s hits a 3% growth as Professor predicts and if he has the script of what he will have done to achieve the growth, then we have a winning formula. It will be interesting to know the formula in advance. The soft drives the hard. Strategy works.
simonsbere@gmail.com
©Simon Bere, 2020

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