Zimbabwe's recovery billions

Zimbabwe's coalition government partners, Zanu-PF and the two MDC factions, have pinned their hopes for economic revival on an ambitious economic blueprint that will require an infusion of US$9-billion to rein in inflation, expand the economy and increase employment.

In a rare show of unity, officials of the three sharply divided and quarrelling coalition partners joined hands at the launch of the blue print in Harare on Thursday.

But Zimbabwe Congress of Trade Unions president Lovemore Matombo said the government had erred because the plan did not have the input of Zimbabwe's workers and the population at large.

Earlier last week, both parties agreed to the holding of elections in six months. But, as is usually the case, the parties are still sharply divided on policies and preferences. Vice-President Joyce Mujuru (Zanu-PF) lauded the indigenisation and empowerment law, which stipulates that 51% of all businesses must be owned by Zimbabweans.

Economic Planning Minister Tapiwa Mashakada (MDC) said that the 51% shareholding would not be expropriated but would be paid for.

He called on the government to privatise its unprofitable parastatals.

The five-year plan is intended to enable the Zimbabwean economy to grow at 7.1% a year and to increase employment by about 6% a year, said Mashakada.

"Total investment of US$9.2-billion is required to finance the medium-term plan in order to meet the growth and development targets. It is important to note that most of the inflows are expected to come through our own savings and investment efforts, foreign direct investment, credit lines and public-private partnerships."

He said the plan's economic growth targets would be underpinned mainly by strong performances in agriculture, mining and industry. This strong performance would be driven mainly by foreign direct investments.

Privatisation of the non-performing public sector, said the economic planning minister, would be crucial to an economic turnaround.

Analysts and business executives said the blueprint would have to be backed by robust policies to attain its targets of single-digit annual inflation, a current account deficit of not more than 5% of GDP by 2015, sustained poverty reduction, double-digit savings and investment at 20% of GDP, and the reduction of sovereign debt to no more than 20% of GDP by 2015.

"The targets and objectives of the medium-term plan are fine with me, but it is what has to be done to attain them that the government has to be sincere with and committed to because we don't want a situation were we make noise and then nothing comes out of this," said one economist.

Finance Minister Tendai Biti revealed at the launch of the economic plan that the US dollar would continue to be the currency of Zimbabwe for the next five years.

He ruled out popular calls for the reintroduction of the Zimbabwe dollar.

"We will make sure that there is no currency regime-change during the lifespan of the plan so that its objectives are achievable."

The Chamber of Commerce, the National Chamber of Mines and the Confederation of Zimbabwe Industries echoed these sentiments. - I-Net Bridge