If what Prof Mthuli says sounds familiar it’s because we have heard it before.

“the austerity measures being implemented on the fiscal &structural sides of the economy, inflation has been targeted to decline to 50-70% by end of 2006; &to single digit by March 2007.” Dr Gono
I’m a little obsessed with Dr Gono. He was more original rather than the current crop. We should spend time going through Dr Gono’s statements. They’re pure gems & help us understand fragile state economic propaganda.

For good measure here are a few quotes from Dr Gono:
“The following deliberate efforts currently underway to enhance productivity in agriculture expected to play a supportive role in increasing food production, boosting real GDP growth & hastening the disinflation process finalization &implementation of the 99-year lease framework;
Comprehensive redress of any infringements on investments protected under Bilateral Investment Protection Agreements (BIPAs); (c) irrigation rehabilitation, which seeks to dilute the country’s dependence on dry-land agricultural production
The painful self-imposed road of macroeconomic adjustment the country and its people is traversing will bear fruit”

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More from @baba_nyenyedzi

4 May
Part 2

1/20 Zimbabwe and AfCFTA

In two seasons time, Zimbabwean millers will be able to buy Maize from Zambia. Cheaply.

What will Zim farmers do? Zambia & Malawi produce profitably at US$200/ton.

Zim farmers get between US$267 to US$381/ton

The day of reckoning?
2/20
Zim yields per tonne are some of the worst in the region besides the biggest GOZ support.

What if SA enters the fray? Given its Capital advantage?

Instead of an agricultural commodity SA will focus on the value chain & manufacturing were there are higher margins.
3/20
For example fertilizer manufacturing. SA banks will offer credit to the rest of Africa to buy SA fertilizer.

But which country is SA most likely to provide credit to? Zim, Zam & Malawi?

Trade is about the movement of CAPITAL. Is SA CAPITAL safe in Zim over 10yr period?
Read 21 tweets
27 Apr
1/10
This makes for the saddest reading this year. For a number of reasons which I will articulate;
(i) Politicization & weaponizing of statistics
(ii) Technocrats reduced to water carriers.
2/10
The herald editorial makes all sorts of claims, as does many analysts given the reduction in inflation from 837.5% to 194.7% in seven months.

The editorial is dangerous. As it removes economic statistics from the realm of economics to the realm of politics.
3/10
Having failed to economically change the structural issues in the economy it seems the new strategy is to fix the output numbers. So politicians can claim success of “single digit” inflation.

The veneer becomes the perfect. This is dangerous in Economics.
Read 10 tweets
24 Apr
Part 1

1/23

Zimbabwe and AfCFTA

On this thread I will restrict the contents to understanding the economics of trade. Which is vastly different from the politics & law of trade.

What politicians think trade is has little relation with what trade is actually about.
2/23
For example politicians the world over will speak of trade deficit & surplus as bad or good thing. Directing policy for this intended good & away from the bad. Yet the economic truth is a deficit or surplus is a meaningless description of movement or goods & services
3/23
The consumers & economies of the deficits OR surplus are better off with the trade than without.

Without the trade, consumers won’t receive cheaper prices & capital won’t receive higher interest. But politics is the art of weaponizing ideas to get votes.
Read 23 tweets
9 Apr
There is nothing new about the FX auction system. The murmurs of discontent are only a symptom of what is wrong with the economic governance. That an importer is subsidized & exporter punished is at the crux of the economic thinking in government. Dishing out expensive favours.
That Mthuli lied in broad daylight about the FX fixed rate reveals his lack of empathy with tobacco producers many of whom face USD costs entirely.

Mangudya’s remarks are very welcome. They lay to bare the stupidity of the policy that kills the golden goose.
If importers were to pay 130 for FX, they would need to work extra hard to sell. Pricing is merely a signal of consumer demand. Interfering with the price mechanism means 3 things;
i. Misallocation of resources from investment to consumption
ii. Massive speculation binge
Read 6 tweets
5 Apr
There is a serious delay in RBZ monthly data. The latest report, Dec 2021 shows money supply increasing at near 500%. The highest in a decade.

Any inflation expectation is based on this wanton printing.

Most of this money is finding its way to the fixed auction rate of 84.
Dec 2020**
It’s not just the fixed exchange rate. ZESA tariffs on average is 7c per KWH. The lowest band is 2c KWH at the rate of 84.

Zim electricity becomes the lowest in the world.
Read 4 tweets
29 Mar
1/7
ED Mnangagwa’s vision is to be a middle income country by 2030.

What does that actually mean? How does that vision translate to strategic intent and objectives.

GOZ has an empty promise therefore the empty rhetoric & consequentially violation of economic principles.
2/7
Peter Drucker notes leaders are not in control of the universe. Hesiod the Greek poet in 7BC discovered scarcity.

If a leader can’t control & he has very little, in Economics all his decisions have a trade off. An opportunity lost/cost. By hunting you forgo farming harvest.
3/7
More guns less bread. So the price of a gun is the many loaves of bread that could have fed the nation.

You can’t have it both ways. When you consume you don’t invest. When you invest, you forgo consumption.
Read 7 tweets

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