Monday, 20 March 2017

Gravitas Vol 1 Issue 4 Public Policy perspectives and Public Financial Management in Zimbabwe

The Other Side of Multi-Currencies: Exporting Public Financial Management Responsibility and Importing Cost.
Tamuka C. Chirimambowa & Tinashe L. Chimedza*

Rejection of the South African Rand: The Spectre Haunts Us.

The official adoption of the use of the multi-currency regime in Zimbabwe helped to arrest rampant almost unquantifiable hyper-inflation. However, the policy of the usage of a basket of multi-currencies albeit a euphemism of dollarisation in reality, seems to have reached its dead end.
The policy was supposed to be short-term and give policy makers a breathing space to come up with alternatives. The policy orientation of our leadership is reactionary and not futuristic and the continued use of the $US as a medium of exchange has become an albatross to our fiscal and monetary policy.
Fig 1.1 Daylight Robbery? Raiding $US and Replacing it with Bond Notes

The rejection of the Rand marked the end of the honeymoon of the multi-currency regime and what has followed has  been a ‘liquidity crisis’.  The use of plastic money and importing $15m a week has not helped and the introduction of the ‘bond economy’ is taking us back Gideon Gono’s casino economy era.

What is shocking is that under the guise of the multi-currency system and the ‘bond economy’ the ruling elites are actually engaged in a wholesale looting of US$ without the need of any legislation. Through the Real Time Gross Settlement System (RTGSS), requirements to surrender foreign currency, denominating bank accounts in both Bond Notes and $USD and then by limiting how much you can withdraw the ruling elites have plundered foreign currency accounts. This is daylight highway robbery sanctioned by the Treasury and implemented by the Central Bank with a minimum whimper from the National Assembly. This is the continuation of the ‘jambanja’ economy in which governments simply expropriates what it wants. When the late Professor Sam Moyo summed the ruling elites as ‘radical nationalists’ he did not imagine they will perpetually run amok unchecked through the citizen’s bank account.

On one hand the RBZ has been calling for a lowering of the interest rates while on the other hand the the banks have started calling for the raising of interest rates citing viability issues and the need to boost their capacity to support private sector funding. This points to a dire future for our financial system. By clinging to the Basket of Multi-Currencies (US$ Dollar) we are exporting public financial management and civic responsibility but at the same time importing an unsustainable cost structure. This calls for a revisit to the debate on the introduction of a proper local currency but most of the citizens are still traumatised by the 2008 hyper-inflation scenario. The situation has been worsened by the secrecy around the Bond Notes and skulduggery tactics by both the Treasury, the Reserve Bank of Zimbabwe (RBZ) and banks. This points to a weak public financial management system and the need for citizens to begin to think on how to use the constitution to enforce financial probity as well as making the banking system serve the public.

Importing Cost, Exporting Irresponsibility: the Bane of Foreign Currency Volatility
The use of a basket of currencies has introduced a semblance of normalcy in the currency markets but as President Mugabe admitted people are banking under the ‘bed’. He even suggested the unleashing of the army and police into private homes, revealing a fundamentally flawed logic which puts force and coercion at the centre of public policy. The brother Dewa Mavhinga now at Human  Rights Watch (HRW) nailed it in when he used to argue about ‘moving from the logic of force to the force of logic’.
Fig 1.2 Unemployed Graduates: A Message for the Chancellor

Firstly, by using a basket of currencies we have imported stable currencies yet they also come with complex cost structures associated with their domestic economies. The Rand will carry the value and volatility of the South African economy,  the US$ will carry the value and the volatility of the US economy and so goes for the other currencies. Secondly, by importing foreign currencies managed by foreign institutions we are exporting or effectively outsourcing public policy interventions to the source countries of the foreign currency. Thirdly, the Zimbabwean economy is now burdened with an investment terrain with foreign cost structures that make it highly unattractive as a destiny for capital of any kind (domestic &foreign). But the problem is deeply structural and it lies at two levels: (I) the non-productive economy and importantly (II) at the level of a public financial management system which is in shambles and is routinely mangled by these nationalist elites.

For God’s sake even some countries with raging civil wars and under sanctions have functional national currencies because they have a rudimentary public financial management system and the ‘dear leaders’ of those countries do not ride roughshod with a wrecking ball through budgetary limitations.

De-Industrialization: The consequences of poor public policy

Since about the mid-1990s Zimbabwe has been de-industrializing meaning that more industries are being closed, the existing ones are operating below capacity and the new industries have been so insignificant such that the contribution of manufacturing to GDP has been ‘shrinking’. The evidence of this de-industrialization is at different levels; (i) rising unemployment; (ii) stagnant and at times falling revenue to government, (iii) sluggish growth which at times was stuck in the negative, (iv) a rising import bill which means a persistent negative balance of payments, (v) collapsed public social services like health and ultimately a (vi) declining GDP per capita.

The failure of using effective public policy to craft and implement a development policy regime came to a head during Governor Gideon Gono’s era when he started playing a ‘Russian roulette’ with the economy. When one plays Russian Roulette the loaded gun, with a single bullet in the chamber, is held to one’s own head. In the case of Zimbabwe, Gideon Gono, cocked the gun and played the fatal game with the gun against the temples of citizens and him laughing hysterically all the way to his lavish properties in North Harare. The result was rampant inflation and traumatized citizens migrated from using the local currency as a medium of exchange to foreign currencies.

Fig 1.3 Laughing While Rome Burns: Public Policy Inconsistencies

The demise of the local currency was first registered by the citizens before the Minister of Finance then moved to announce the use of a ‘basket of currencies’. Under the present structure the government has basically used the Bond Notes as as surrogate currency in an attempt to re-domesticate monetary policy. This attempt is a cosmetic reform which is not paying attention to structural questions and in this case the flagrant mangling of the public financial management system has meant a loss of confidence in any local currency that maybe introduced by the government.In the real market there is already exchanges of the bond notes at a discount signifying the gradual descent to hyperinflation. Good money is already replacing bad money as the Gersham law says.  

Russian Roulette With Kidnapped Heads: The Mafia is Taking us back to 2008

The brother at the RBZ has already started dishing out money while Chinamasa thinks ‘money grows on trees’ by printing treasury bills and multiplying public debt. It was revealed that CBZ for example now holds TBs worth $US600million, for the CBZ this is either a stroke of genius or they are being held by the collar to buy TBs because government is a significant shareholder. The major Achilles heel in all this is a deliberately weak public financial management system where the parliament and its committees have been reduced to a mere rubber stamp of the executive. There is very limited parliamentary oversight as the government will fully continues to indebt the nation under the guise of ‘national security’ and ‘sovereignty’. Already, the government has circumvented parliament by borrowing US$500 to finance command agriculture from the private sector without any legislative authority. When the brother Gideon was pressed for answers as to his non-stop printing of the currency his excuse was that the ‘security’ of the country was at risk.

Fig 1.4 Gono’s Casino Economy: are the Bond Notes taking us there ?

The RBZ’s policies and the Treasury’s speculative quasi-fiscal activities  are taking us back to the Casino Economy. We have argued that a Casino Economy is never designed to benefit the citizens but its inventors, in this case the ruling elite, intent to pickpocket the citizen in broad day light. Already, the casino machines are beginning to jam as the citizens are steadfastly being bankrupted. The Bond Note project is busy laundering and mopping up people’s hard earned foreign currency under a very secretive exchange rate system. The RBZ chief claims that there is now about $102 million of the bond notes in circulation vis-a-vis the purported $200mn AFREXIM Bank loan facility. This loan too has been one of the many secrets that the executive has kept away from parliamentary scrutiny. When stories of an emerging parallel market rate and different pricing systems are told by the independent media, Governor Mangudya claims the reports are based on outliers and are a few. All this denialism ignores the fact that Zimbabwe’s economy is now highly informalised and when these so-called insignificant small businesses are put in a mathematical equation it translates into a huge amount.

A Man Must Lick His Lips in Dry Weather

Honourable James Maridadi’s recent contribution in parliament graphically exposes the schizophrenic nature of the Mafioso as the economy is losing out to Chinese companies operating in Zimbabwe without remitting anything to treasury. Statutory obligations are reportedly violated and in this particular story the prejudice to treasury runs close to a million US$. In a related story, a few years ago, another Chinese company, Jinan was reported to have siphoned US$500mn of diamonds money, and the authorization was reportedly given by Minister Sydney Sekeremayi. The same Jinan never contributed anything to the Zimunya Marange Community Share Ownership Trust citing that its agreement says it will remit 2% of net profits and all long along it has been making losses, albeit having declared a dividend of US$10mn, yet the Mafioso is quick to sloganeer ‘Zimbabwe shall never be a colony again”!

In short by sticking on to the basket of currencies operating alongside a secretive bond note regime we have given the Mafioso an opportunity to bankrupt us as they did with our public pensions and insurances in 2008. It is our contention that we need to push for financial probity within public institutions and insist on a functional public financial management system so that Zimbabwe can have a local currency otherwise locking ourselves to a basket of currencies is the easiest way of exporting responsibility and importing the currency volatility and cost structures of other countries.

West African local wisdom has it that: ‘a man who does not lick his lips should not blame the wind for drying them up’. We leave you with the wise words of none than our dear brother Wanachi:

The majority of Zimbabwean people, including you, have got this false notion that we can outsource our struggle to the opposition. That’s not possible. The opposition is as good as the people it purports to represent. And part of the problem is that the majority of Zimbabweans adopt an innocent bystander approach and think that there is a Moses amongst the opposition. There isn’t a Moses amongst the opposition. So, all of us, including yourself, must play a role in the struggle for our emancipation.

Zimbabweans need to realise that they are their own liberators and that responsibility cannot be exported.

*Tamuka C. Chirimambowa & Tinashe L. Chimedza are the Co-Editors of Gravitas and the Co-Founders of the Institute for Public Affairs in Zimbabwe (IPAZ)

Zimbabwe’s Look East Policy: Counting the Costs.

HON. MARIDADI: I would like to ask the secretariat of Parliament to bring me some exhibits that I have. Can you kindly bring the exhibits that I want to show to the House – the dishes and all the other things so that when I debate, I put my debate in context.One small dish, one large dish, transistor radio, a thread, binder and outer blanket were laid on the table.

Fig 1.5 Not Happy Madam Speaker: Hon James Maridadi Exposes Chinese Companies and Government Collusions?

The President spoke about two issues. He spoke about the economic downturn and he said Government was working hard to ensure that the economy can start working again and for very obvious reasons. The President then spoke about the need for Zimbabweans to shun corruption. Madam Speaker, I want to talk about those two issues, the need for Zimbabweans to shun corruption and the need for the economy to grow. There are issues that I want to highlight here which militate against the growth of this economy. The last time I spoke about this, I brought exhibits of blankets and I spoke to that. Today I have some exhibits and some documentary evidence here that I have which are militating against the growth of this economy.

There are people that are operating in this economy that are not following regulations that are stipulated by Government. What I have before this House are two dishes. These two dishes are imported into this country by a company that I have put tabs on. When this dish (small) comes through the border, it is cleared at $0.02. This one here (big) clears at the border at $0.04. That is the duty that they pay. I went to buy this one here (small dish) for $6 and I bought this one here (big dish) for $13. They are imported from China. In China Madam Speaker, they pay the correct amount but when they come to Zimbabwe, they do not pay the correct amount. I am talking about $0.02 and $0.04 and I have the evidence here.

I have another item. This is a transistor radio. This radio declares at the border $1.20 and it is sold in Zimbabwe for $14. Let me go on to the next thing. I have here what is called a quilting kit. A quilting kit consists of a liner, binder and the outer blanket. When these things are imported into Zimbabwe, there is the binder, liner, the outer blanket and the thread. It is called a quilting kit. When you put these together, you then come up with a blanket. This blanket here in Zimbabwe sells for about $20. A blanket which is manufactured in Zimbabwe is sold for $30 for a double. Companies in Zimbabwe like Waverly do all the manufacturing from lint to a complete blanket. The lint will lead to this outer material, it will also lead to this inside material and it will lead to this binding cloth and to a complete blanket, a double of which will sell for $30.

Fig 1.6 Looking East While Local Industry is Decimated ?

When these quilting kits come into Zimbabwe, what they declare at the border is $0.40. A local company which is manufacturing blankets cannot compete with a company that is importing a quilting kit for $0.40 and sell a blanket because they can even sell it for $3 and still make a profit. Actually, this material here, when it is being imported into Zimbabwe must declare $2.93 per metre at the border but this whole set is declaring $0.40 at the border. That is the level of prejudice to this Government.This Chinese Company would not able to do this if they are not protected by senior people in Government. The document that I have here Madam Speaker will tell you what has been imported into this country. The Chinese Company I am talking about here is called Yufan Import and Export Trade Company. It does not have a bank account. I wonder how they are then able to pay for these things in China if they do not go through the Reserve Bank of Zimbabwe because they must essentially go through the Reserve Bank of Zimbabwe. They must submit an application to the RBZ and say we need so much to be able to import these items into the country but I do not know how they do it because they do not go through the Reserve Bank of Zimbabwe…

HON. MARIDADI: They do not have a bank account and what it means is that they do not pay corporate tax. When I went to buy these items, they have three different sets of tariffs. They do not allow to swipe. If you are buying using bond notes, this dish here costs $16. If you are using US dollars you pay about $12. They will tell you that if you are buying more than one, they do not want bond notes, they want US dollars and I have documentary evidence to that. Madam Speaker, if you look at the extent of prejudice – I was calculating here – a 40-foot container paid ZIMRA $4 000 when in actual fact it should have paid $49 970. I am talking of one container. This item that I have here which is called a Bill of Entry talks about twenty 40 foot containers that have come into Zimbabwe and they have only paid about $80 when in actual fact if you calculate $49 000 by 20, it is about a million. With this kind of attitude, we are not able to go anywhere. But let me bring it home.

ZANU PF owned two companies, one called National Blankets and another one called Kango. National Blankets had machinery and employed people to produce blankets. But because National Blankets can no longer compete with people that are protected who import these quilting kits. National Blankets; to all intents and purposes has closed shop; it is no longer there. All of us in this House, when we grew up, we remember the kind of plates and pots which were called Kango. Kango is a company that was owned by ZANU PF. Kango has closed shop because of imports of plates like this for two cents and sell it for whatever price, Kango cannot compete because they must buy material and come up with a plate like this via a manufacturing process.

I will bring it closer to home even further. Cone Textiles is the company that used to do most of these materials. It is now done by a company called Waverly Blankets. Waverly employed 1800 people but when these imports started coming into Zimbabwe, they have retrenched and now employ about 400 people. What it means is that 1400 jobs have been exported to China who do not pay corporate tax, Pay As You Earn, et cetera.Madam Speaker, what we want to do is, we need now to say, the Chinese companies that are operating in Zimbabwe, how are they registered? Who are they doing their banking with? Does the Reserve Bank and ZIMRA know that they are importing and exporting? When they get bond notes, they simply go on the streets of Harare and harden the money into US dollars and the money is spirited out of the country. It is very easy to take money out of Zimbabwe. If you have $200 000, you simply go to Charles Prince Airport, you charter a plane and you fly into South Africa. It is that simple. You do not use Air Zimbabwe and South African Airways because Harare International Airport security limits the amount of money that you must take out. That is how money is leaving this country. It does not really matter how much policy and regulations the Reserve Bank of Zimbabwe is going to put into place, money will still leave the country.

The fact of the matter is that, we must start now to investigate all companies. I am talking across sectors. If you go into the brick moulding sector, Chinese companies that are moulding bricks are selling those bricks at a price such that Willdale Limited, a Zimbabwean company cannot survive. A Chinese company that is selling fast foods does it in such a way that a Zimbabwean company that is in that industry is not able to survive. Madam Speaker, the textile industry in Zimbabwe to all intents and purposes is dead. Hon. Nduna from Chegutu can vouch for me. There is no way that David Whitehead can come back if we have this kind of thing. These are cheap imports but what I want to reiterate today is that these people who are doing these things are protected by senior Government officials.

Fig 1.7 Will Capri Manufacturing Survive Against Cheap Imports?

Today I hear that one of the Chinese people and a Member of Parliament of Zimbabwe are trying to borrow money from CBZ so that they resuscitate National Blankets. You will not be able to resuscitate National Blankets as long as there are cheap imports that you are going to compete with. You are not going to revive the textile industry for as long as there are cheap imports that you are going to compete with. You are not going to revive Kango for as long as there are these imports coming into Zimbabwe that are equally good but are selling at a quarter of your input into production. Madam Speaker, there is Capri Corporation, a wholly owned Zimbabwean company. In the past two years, Capri Corporation has invested $15 million into the manufacture of refrigerators and stoves. They made a profit of $200 000 in 2015. If you are in business and you invest $15 million and make a profit of $200 000, get out of that business. You would rather put that money in a bank. Where you have an interest rate of 5%, you are able to make more money than you are making in manufacturing.

The reason why Capri is making that meagre profit is because there is Samsung. Samsung is a South Korean company that has been given a licence to manufacture in Zimbabwe. If you go to Samsung in Harare today, all you see is an office the size of this desk. That is all they have. They bring complete refrigerators to sell in this country competing with refrigerators from Capri and the other company which does industrial refrigerators. Madam Speaker, if you go to Capri, which I visited about three weeks ago, it is a hive of activity but they are operating at 40% of capacity because of Samsung. Why are we bringing Samsung into Zimbabwe when we have our own company that is manufacturing in Zimbabwe? Samsung could not go into Zambia.

In South Africa, their products have knocked down the prices of refrigerators but they now have a ready market in Zimbabwe. They have been given a ready market in Zimbabwe, they are militating against our own companies and we are exporting jobs to South Korea.Madam Speaker, I would like to thank you for your time but I want to say the attitude of senior Government officials who protect corrupt people, especially Chinese must stop. In my next instalment which is coming very soon, I am going to name and shame you. What I am urging Hon. Ministers and Hon. Members of Parliament who are protecting these people is to please stop forthwith so that you avoid the embarrassment of me standing up here because I will name you. I will say your first name, second name, surname and the constituency that you represent.

Thank you Madam Speaker.
Hon James Maridadi is a Member Of Parliament for the MDC-T & we would like to thank him for granting his consent to publish this.

Rethinking Zimbabwe’s Industrial Policy: Lessons from Japan and the East Asian Tigers.
Taurai Chinyamakobvu*

I will start by an anecdote. My friend’s acquaintance travelled from Zimbabwe to China to buy stuff for resale. After buying a certain product, he complained that its quality was poor. The Chinese seller angrily retorted, “Why you complain (sic)? In Africa, you can’t even make a toy.” A typical case of bad customer service, but the take is that we have to learn to make tangible, actual products – genbutsu in Japanese. The issue of an Industrial Policy (IP) must be at the center of our government programs because it can fix more than half of our national problems.

Fig 1.8 Zimbabwe Stock Exchange (ZSE): Dominated by Booze and Mobile Phones?

Our economy in its current form is largely agrarian and while agricultural production is important in the contemporary political economy it is a myth that we can ever develop on the basis of agriculture as no economy has ever advanced on that basis.  If at all we envisage transforming Zimbabwe from a third world country to a developed one, we must as a matter of course industrialize. That our economy is in bad shape needs neither a rocket scientist nor a Nobel-prize winning economist to discern. There is everything wrong with an economy where the largest listed company is a mobile phone operator, followed by a beer company.

An industrial policy remains important in transforming the economies of third world countries, and while context differs in determining the success of IPs. An IP is a strategic effort and a set of programs adopted by a government to develop and grow productivity, particularly in the manufacturing sector, through targeting certain industries, providing clear guidance, subsidies, trade protection and anti-trust exemption in others. Far-eastern countries like Japan, Korea, and Taiwan are good examples where IP has been effectively used to catch-up with the West.

Lessons from the East: The rise and transformation of Japan

By far the most judicious example of industrial policy to learn from is that of Japan. In Japan’s case, the role of the Ministry of International Trade and Industry (MITI) as the IP champion is widely renowned and revered.  To argue that adopting the Japanese style pro-growth IP would be replicated in Zimbabwe would be naiveté of the worst sort, as context, including ideological politics is a major factor. The main objective of the IP is to “restore the manufacturing sector’s contribution to GDP of Zimbabwe from the current 15% to 30% and its contribution to exports from 26% to 50% by 2015”. A section on necessary conditions for Zimbabwe’s industrialization reads “… there will be a critical need for close cooperation in the following key areas” like electricity, water, roads, rail and labour legislation for the IP to succeed. Yet prior to finalizing the policy, that close cooperation and consensus must have been sought and cemented. That is the greatest lesson that can come out of Japan’s successful IP. MITI championed consensus even under very difficult circumstances and disagreement – the so-called nemawashi (consultation to lay the groundwork).

Fig 1.9 Global Icon: Toyota’s Attempts First to Export were a Disaster

Developing an IP needs a strong dose of systems thinking. That thinking does not run through the present IP. Systems thinking requires the development of a policy by breaking the system down into its constituent parts and then evaluating each in detail by looking at its inputs, processes and outputs. For example, the desired output of the IP is a 15% increase in the manufacturing sector’s contribution to GDP. The next question should be, what inputs do we need to double the output? Clearly, the inputs required are labour/skills, technology, capital, energy, water, innovation, among others. Thereafter, one needs to ask what processes should take place and what exogenous factors need to be managed, especially where exports are to be doubled.  During the GNU the Prime Minister expressed shock at having discovered some equipment fitted in 1923 in some factories.

The IP clearly suffers from a resource shortage. The IP simply notes that government will identify credit lines of a short to medium term nature. The policy should specify how and what should be done for capital to flow in and for the country to attract those credit lines. It also suggests the formation of an industrial bank. However, the case of IDBZ, its capitalization issues and record in infrastructure development does not help in inspiring confidence that an industrial bank will be formed and help to capitalize manufacturing companies enabling them to double output. Relating this to the successful case of Japan’s IP, that country benefitted from a large amount of local savings. Without savings in Zimbabwe, NSSA, which has largely been involved in stock market and real estate, has a role to play in funding manufacturing. If Old Mutual, a private mutual fund, can provide $20 million for distressed companies, NSSA which collects money from everybody should be able to set a side much more than that to capitalize industry.

The IP also promotes cluster development – the targeting of specific sectors, such as the chemical industry, agro-processing industry and metals and electricals sector. This is noble in developing competencies in these sectors where the country has an advantage. But the policy is not clear on exactly what the government shall do with these sectors to double their output. For example, much of the section on the metals and electricals cluster simply describes the revival of Ziscosteel. It is not clear what aspects of electricals the IP will promote. It also lacks an examination of the value-chain elements of those specifics cluster areas and how they will be developed to create sustainable competences.

What can be discerned from MITI’s success was how it leveraged industrial keiretsu (related value chain companies), providing comprehensive and clear support to sectors such as electronics, chemicals, rail and so on. A sector that is a prospective clear winner, though it does not constitute hard manufacturing, that could have been supported by the IP is the software industry, which can easily position Zimbabwe as a software outsourcing hub for Africa.  Clearly, the policy spells out a cluster development approach that seeks to promote certain productive industries. Critical to developing a country’s competencies in specific sectors is the development of innovation and heavy investment in research and development (R&D).

Fig 1.10 Made in Japan : Used to be a laughing stock.

Here is a good example of how Japan supported the semi-conductor cluster in order to chip away at the dominance of the United States during the 1970s. The Asahi Shinbun in 1976 reported that, a VSLI (very large scale integration) R&D project was started jointly by the government and the private sector. To do so, the VLSI Technology Research Association was formed comprising five domestic producers in two groups, viz “Fujitsu-Hitachi-Mitsubishi and NEC-Toshiba. The firms together with MITI created a joint research institute comprising “100 researchers from the member firms and MITI’s Electronics Research Institute. During the following four years, about 70 billion yen, including a government subsidy of 30 billion yen was spent. The technology necessary to develop VLSI was developed and the association disbanded…”. Our own MIC needs to learn from this and provide guidance towards joint research that stresses the necessity of pooling R&D efforts to efficiently use scarce scientific manpower and research funds. One way of generating funding for technical research is to redirect the funds from state and private lotteries towards scientific research, and then licensing the patents out to the private sector.

The MIC’s IP encourages import substitution. However, the policy is not clear on export promotion with regards to the quality of output for exports and its competitive pricing. Apart from a general comment on the Standards Association of Zimbabwe, the policy contains no robust measures on setting sustainable standards on the goods to be exported. To export value added goods, while protecting some local industries from foreign competition as proposed in the policy, we must necessarily go beyond import substitution to export promotion. Yet fundamental production inefficiencies in our factories render our goods uncompetitive internationally.

The policy lacks mechanisms to ensure the supported clusters are put under pressure to reduce per unit costs of production through production efficiency, use of technology, eliminating waste and ramping up output. The policy also lacks a program of technical cooperation with international and local agencies to engender technology transfer and diffusion. In order to catch up, the country must work with developed countries. For example, Korea’s electronics industry was a great beneficiary from Japanese and American engineers and scientist and their innovations. That is how companies like Samsung quickly developed competencies in memory chips, particularly dynamic random access memory. In the same vein, Sharp Corporation of Japan also leveraged RCA’s patents on liquid crystal to create liquid crystal displays (LCDs). This is the only way Zimbabwe can leap-frog itself to the latest technology curve.

Eventually, the success of Zimbabwe’s shall be a function of implementation of the policy. First, the policy needs to be improved clear of all vagueness and the missing links. Another lesson that can be drawn from the Japanese example is the mutual cooperation between government and the private sector – the cooperation of government and business as collaborators and not as adversaries. Also the use of administrative guidance (gyōsei shidō) by MITI as an instrument of enforcement can help our own MIC is implementing its own policy. This entailed the use of persuasion, advice, and influence to push corporations towards a direction viewed as desirable by MITI’s bureaucrats who also had the power to give or to withhold government contracts, import permits, tax concessions, loans, grants, subsidies, licenses, foreign currency and approval of oligopolistic cartels. In conclusion, the current policy lacks a clear program of agreed actions that will double Zimbabwe’s manufacturing output and most of all, there is need to learn from successful frontrunners.

*Taurai Chinyamakobvu is a consultant and scholar of Japanese technology and business methods. The opinions expressed herein are his. Feedback can be sent to

International Women’s Day 2017: In pursuit of alternatives to destructive extractives in Zimbabwe
Tafadzwa Muropa*

Illicit Flows & Discrimination of Women in Natural Resource Extraction
The month of March holds a special place in my heart as women from different backgrounds converge in order to share their successes, assess their shortfalls and collectively seek ways to strengthen their voices against retrogressive forces that hinder their realization of their basic rights. However, women in mining communities have little to celebrate within the Zimbabwean context; given the ever-increasing discrimination against women in the recruitment of workers; increasing incidences of violence against women; limited food security options; unwanted pregnancies  and the need for developing realistic alternatives to the destructive mining practices.

Fig 1.11 Farai Maguwu: Abducted for recording human rights abuses in Chiadzwa

President Thabo Mbeki’s UNECA panel on Illicit Financial Flows estimated that Africa loses U$50billion annually to illicit flows mainly from mining. Here in Zimbabwe the former Finance Minister Tendai Biti used to complain loudly about mining royalties not reaching the treasury and the President astonishingly admitted that a whopping $15billion might have been spirited out of Zimbabwe.  The chaos in the diamond fields led the government to nationalise the mining companies in an attempt to increase revenue flows yet on closer look this might be the proverbial case of closing the barn when the horse has already bolted. In Shona it’s called ‘kuyeuka bako mvura yanaya’ as in the foolishness of suddenly remembering where to shelter from the rain when the rain is already over.This year’s international women’s day broader theme ‘women in the changing world of work’ is a call for civil society, government, donors and the private sector to reflect on the working conditions of women employed in extractive industries. Further, the global call for women to #BeBoldForChange is a rallying point for women and men to show solidarity with marginalised women in mining communities whose voices have been silenced by the harsh conditions in their contexts, as the state has failed to play its part in improving the living conditions of women in extractive industries. It is also a call for stakeholders to focus on changing the lives of women not only working in extractive industries but also those living close to the mining companies.

Notes from the Field: Women’s Voices via Participatory Action Research (PAR)
The Centre for Natural Resource Governance (CNRG) over the past two years engaged women leaders in the mining communities in the following districts (Bikita, Darwendale, Hwange, Penhalonga and Mutoko).  Through support from Open Society Initiative of Southern Africa (OSISA), CNRG managed to train over sixty women in mining communities in participatory action research so that they would be able to narrate their own struggles through their own perspectives. Women were able to document their challenges and expose what has been hidden from the public eye for decades as they managed to empower their communities to identify, define and transform their lives for the better.

Fig 1.12 Bearing the Brunt of Militarism: Women have suffered dispossession, displacement and violence (picture via CNRG)

The common findings from the participatory action research included limited access to sexual and reproductive health services for women, water and air pollution caused by mining companies which would present health hazards to women’s reproductive health, poor agricultural yields as a result of having their fertile land forcibly taken by mining companies and local government authorities through relocations to pave way for mining. This in turn destroyed the only means of livelihood (subsistence agriculture) the women had in favour for the undistributive capital intensive mining.

During PAR, it was observed that there were limited employment opportunities for women within the mining companies, increased presence of commercial sex workers due to limited opportunities for women in extractive industries and limited energy sources at community level. Most women end up cutting down trees for firewood in so-called prohibited areas resulting in them being arrested and sometimes abused by mine security officials. Women leaders also noted that the mining activities also lured young girls in getting married at an early age as there was low appreciation of education at community level. It was important to note that patriarchy also hindered women from fully participating in decision making platforms where they would convey their concerns to the responsible authorities. Most public forums where mining is discussed are dominated by men, hence the need for women leaders to seek ways in which their voices can be heard at strategic spaces.

According to the Sunday News Online dated 5 March 2017, Hwange Colliery Company Limited (HCCL) has committed to retrench over 1000 workers during this year in order for the company to stay viable. Given such a context, it becomes imperative for communities in mining areas to advocate for real alternatives that will pull people out of poverty. Furthermore, the global call #BeBoldForChange encourages women at community level to have the courage to ask the right questions from their leaders on the need to support local income generating initiatives, through the respective local government committees responsible for taxing mining companies.

Progressive Legislation But Insignificant Reforms

Section 56 of the Zimbabwean constitution calls for gender equality and non-discrimination in all sectors, thus the concerns of women working in the mining companies together with those living in the mining areas should be catered for by the responsible government ministries. However, past events showed that the state, including its security agencies, had been at the forefront of violating women’s rights. According to The Standard, dated 22 March 2015, witnesses reported a number of incidents where state security officials and mine security officials raped women residing in the Marange area, of which up to date, they are yet to receive justice from the courts of law.

Fig 1.13 CNRG: Building a Movement for Public Policy Accountability.

Hence, there is need for strong political will from the state machinery including the Gender Commission, Human Rights Commission and the National Peace and Reconciliation Commission to create a conducive environment for women from mining communities to ask critical questions to the line ministries and mining company executives. Civil society including social movements and faith leaders need to continue to be open minded and opening spaces for women’s n’s rights activists to speak out on violence against women in the mining areas , especially during the Alternative Mining Indaba(AMI)which is held annually in Cape Town, South Africa every February. The debates that take place in such spaces as the AMI should be gender sensitive and not derogative so that they encourage a spirit of unity, tolerance and collaboration on key concerns that affect marginalised groups such as women and children.

During the course of 2016, CNRG played a key role in preparing local women leaders from Mutoko, Hwange and Penhalonga areas to make submissions before the Parliamentary Portfolio Committee on Mines and Energy on the proposed Mines and Minerals Amendment Bill. The local women leaders were able to argue how the current Mines and Minerals Act had not benefited the local women in addressing unfair and discriminatory recruitment practices in the mining areas and how the mining companies were contributing to the environmental degradation among other concerns. This goes to show the need to empower communities to be bold enough to speak out their minds towards o promoting alternatives that will empower communities.

Being Bold for Change: Building Women’s Power for Transformation

As Zimbabwe prepares for the 2018 general elections, the call for women to #BeBoldForChange entails being courageous enough to ask potential political party candidates to commit to address women’s rights issues in the mining communities after being elected. Natural resources must benefit the general population and future generations, and not only the political elites and the mining companies. Being Bold for change entails galvanising collective effort from all stakeholders including government in committing to make the environment conducive for women leaders at the local level to exercise their rights and contribute to the local development of a community. To #BeBoldForChange also demands for women’s rights activists to ask hard questions to the donor community especially during the annual United Nations Commission on the Status of Women (CSW) to be held later this week in New York, on the need for development partners to accommodate women’s views in developing alternative development models that elevate the lives of women in the mining communities.

This year’s theme calls for women to be bold enough to ask tough questions to mining company executives and line government ministries in order to seek a constructive dialogue that ensures women’s dignity and that of their families is preserved against corporate greed.

*Tafadzwa Muropa is Programs Manager at CNRG. She holds a Bachelor of Arts Degree in Economic History and Philosophy with the University of Zimbabwe. Her areas of interest include economic governance, gender equality, child rights and social policy.

Gravitas is a publication of the Institute for Public Affairs in Zimbabwe (IPAZ). It is published every two weeks and contributions are welcome to be send in dialogue with the Co-Editors at Our major thrust is political economy analysis with lean towards public policy and socio-economic transformation.

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