The way I was attacked, my IQ questioned, vitriol & trolling for simply stating the obvious that Zim is NOT an agriculture based economy! That over the decade, even with the best harvest Agric was now 9% ( 10 yr avg)of GDP.
In 2020 it was worse. It was 7.6%. Lowest in a decade.
Yet, unprecedented in the world is the amount of GOZ expenditure directed to agriculture.
We can explain it thus; despite an unprecedented expenditure in Agric through Command Agriculture, the sector contribution fell to its lowest.
The actual numbers point to a very fragile economy which was devastated by Covid.
Try & use the official exchange rates to determine the USD GDP.
Fx auction has reduced GDP overall gains. In the past Zim has enjoyed commodity booms, this time it was muted.
Thread in November
It is obvious the outlandish GOZ economic policies like Command Agriculture and Command Auction have devastating effects on the overall economy. This is in line with the theory that favoring particular sectors leads to misallocation & inefficient distribution of resources.
It is also obvious that these policies are done as a means to facilitate rent seeking. This rent seeking is a cost to the economy as real money/savings leave the system.
Take the circular flow. Corruption is a tax that reduces the savings in the economy hence less Investment.
Corruption is a serious leakage in the economy. It must now be addressed seriously.
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Most problems can be solved if only we engage. Twitter makes it possible to engage regardless of our views. But, through engagement & interrogation we often find the truth & logic to questions that trouble us. The worst is acting on something in ignorance.
Twitter allows the ignorance to find light. I am always amazed at the level of intelligence, engagement & examples. Oft times, I too am educated or find great nuances in our debates.
GOZ is made of ignorant politicians with power. Nothing wrong with ignorance, it can be changed
But ignorance with power will never allow debate. Leadership capacity means ability to deal with complexity. Complexity requires a lot of engagement & understanding.
One is required to be a pilot to fly a plane. But one is not required to be a pilot to run a successful airline
From a corporate governance perspective the Perm Sec Guvamatanga should refuse the gift from Tagwirei. From a public finance perspective, it spells disaster when the main beneficiary of the condonation bill (parliament pardon for over expenditure) is gifting country's treasurer
From a moral perspective, it reeks & stinks to high heavens when street traders are arrested for illegal currency trades when Sakunda and others at the party are beneficiaries of the ZWL in the market causing rates to spike.
Lets not attack the man. But the Perm Sec must understand that his friendship & expensive gifting with Tagwirei goes against ALL governance rules especially in public service.
It is patently obvious that the president & possibly his Vice have acted on false information. Their actions make the situation worse.
Everyone has been afraid to tell the truth about the auction & it’s core problem
2/24
When the auction was introduced it was done so based on borrowed money from Afreximbank. Which money added to the Afreximbank loan of US$1.5bn. We haven’t been able to pay back & the loans accrue an interest rate of over 10% p.a
3/24
Business was naive in accepting the auction system based on false & faulty premise. (1) RBZ is a regulator & holds monopoly of printing ZWL. There is an obvious moral hazard if it has the mandate to ration currency.
Zimbabwe has in the last five years all but given up on FDI. Instead, in an unprecedented manner taken more offshore debt than in the last forty years.
China must pay Zim cash for its exports & not offset with onerous debt under the guise of infrastructure & donations.
GOZ is awfully inadequate in understanding geopolitics & economics. For example, China grew on savings & FDI. Not debt.
FDI is important for;
(i) Technology transfer
(ii) It’s equity at risk& is more patient.
(iii) Loss is not a burden on greater society
(iv)Global supply chains
All these are ideological questions. Socialism quickly runs out of money. Leaves debt & malinvestments. Losses & Debt become a collective responsibility. A child born today is saddled or as the saying goes indentured. All they’ll produce will go to paying off their father’s debt!
Commenting on abandoning the 1:1 gedye, Eddie Cross believes it was an act of bravery. He goes on to say ED economic management is didn't from Mugabeconomics. Notice how Eddie Cross doesn't use facts &numbers? But superlatives?
Under ED the economy contracted for two years by 8%pa according to WB. The condonation bill, saw unprecedented snbudgetted expenditure under ED. Even the WB noted the ridiculous world beating expenditures.
Under Chinamasa external debt was US$9bn& he had a plan to address it under the LIMA negotiations. Now it's double. Chinamasa reigned in expenditure, cutting GMB subsidies.ED brought Zupco subsidies.Under ED the truth is a punishable offence. They even banned OMIR.Mugabe didn't!