Zimbabwe is experiencing severe birth pangs of transforming into a fully-fledged capitalist economy from a centralized economy, former presidential adviser Christopher Mutsvangwa said.
His remarks come at a time the second Republic under Emmerson Mnangagwa is marred by massive price hikes, distorted exchange rates, shortages of foreign currency and essential goods and commodities.
Tension is high in Harare, Zimbabwe’s capital, where security enforcement agents are on high alert of imminent civil unrest as Mnangagwa struggles to arrest the economic crisis.
However, Mutsvangwa who is also the war veterans chairperson, said the suffering of the populace is “normal” under the economic transition.
“The national economic template is being transformed from centralized corporate allocation of resources to the free play of market forces of supply and demand. It has to be born in mind that the modern day Zimbabwe started off as a colonial corporate private entity of Cecil John Rhodes.
“It is natural to experience birth pangs on an undertaking of this scale. It is also a matter of fact that there are no quick fixes or instant results in such an exercise,” said Mutsvangwa.
He said the country had been under siege from a cartel that had been feeding at the expense of the entire populace.
The former presidential advisor revealed that there was serious resistance among the few kingpins that had a stronghold on the market forces.
“Such an all-encompassing economic reform programme cannot be piecemeal. It is also bound to meet with inevitable resistance by those who have enjoyed the advantage and privilege of the resource allocation model. It enriched a coterie of the few, impoverishing the majority and stunting if not extinguishing national economic prospects,” said Mutsvangwa without mentioning names.
He said Zimbabwe’s diplomatic thrust of re-engagement to Europe and the West is being underpinned by deep economic reforms that are removing distortions in the economic body politic.
Mutsvangwa said the process is further underpinned by the restructuring of the pricing regime and exchange rate.
“The President is unifying the national pricing structure. Various and often conflicting prices like Real Time Gross Settlement, Old Mutual Implied Exchange Rate, preferential hard currency dollar for fuel sector and others are expunged. Market forces shall henceforth run the roost on the national and foreign exchange markets.
“The monetary policy partially floated the currency. Last month the introduction of the interbank rate was yet another giant step towards full flotation and currency convertibility,” he said.
Mutsvangwa said above all, the president is moving towards the ease of doing business which is essential in quoting investment.
“President Mnangagwa is committed to offer foreign business interests an environment where they can ‘walk out’ as easily as they ‘walk in’ with their investment funds. No more trap doors in the repatriation of funds and profits. Out with allocated retentions of exporters’ proceeds by the central Reserve Bank of Zimbabwe,” he said.
Zimbabwe is regarded as a high risk investment country owing to policy inconsistencies and liquidity crunch, which has been a great impediment towards business.