HARARE, December 8 (The Source) – Patrick Chinamasa virtually sang and danced through his budget speech like a newly freed slave on Thursday.
The shackles are off and he clearly looked relieved. For the first time in his portfolio, he is free to do what he always thought needed to be done; reducing the wage bill, cutting back on unnecessary spending, fixing the indigenisation law, and reengagement with foreign funders.
Many are still undecided about President Emmerson Mnangagwa’s policy direction, after his strong inauguration speech was sullied by unpopular Cabinet picks. So the pressure was heavy on Chinamasa to provide some clarity. And he did so by sending the message that “we are breaking from the past”.
But while the words said all the rights things, the numbers tell us that breaking from the past will be harder than he made it seem.
Still, it is easy to see why Chinamasa’s statement may as well have been headlined “Free at Last”. There are four key areas where, under former President Mugabe, he was barred from doing what he needed to do.
Two years ago, Patrick Zhuwao, then Youth and Empowerment Minister, called reporters on Christmas Day to a press briefing. He was angry with Chinamasa, who just days earlier had announced that banks would be exempt from foreign ownership.
“This is a man who is a lawyer who was once an attorney general and is lying and misleading the banks,” Zhuwao railed. He accused Chinamasa of “treachery”. Zhuwawo ally, Jonathan Moyo, told Chinamasa to “shut up” and stick to his own portfolio.
Chinamasa at one point walked out on Zhuwao at a meeting meant to solve their differences on the matter. Not long after that, Zhuwao declared that all foreign firms that don’t give up shares to locals would be closed by April 1, 2016. The threat drove the stock market down and helped cause a flight of cash from the economy.
Mnangagwa told a conference at the time that the fighting between the two ministers had caused “confusion and unsettled current and potential investors”. Mugabe was forced to issue a statement clarifying the law, but investors remained anxious.
The proposed change to the law, in which only platinum and diamond mines will now be majority locally owned, has been well received although it falls short of the expectations of many investors. But after so much opposition, this was still a chance for a Chinamasa victory dance in front of his old critics.
Former President Mugabe was never a fan of the IMF and the World Bank, or foreign investment in general. At one time, Chinamasa was in the middle of delicate talks with the IMF, when Mugabe told a ZanuPF meeting: the IMF can “go to hell”.
In 2016, Zhuwao said FDI was “ungodly” and Zimbabwe could do without it.
Now, on Thursday, Chinamasa was able to confidently promise that he was prepared to make the “necessary sacrifices” to engage global capital, repeatedly referring to Mnangagwa’s inauguration speech, which pledged reengagement. That’s one more shot at his former President.
Wage bill reform
In 2015, the Cabinet agreed to a programme of reforming the civil service. Part of that was a plan to remove over 3700 “youth officers” from the Government payroll. But at a rally in Chinhoyi in July, Mugabe changed his mind after he was reminded that these were ZANU-PF activists.
“Our economy is recovering. Is this the time we should be firing our youths? Whether this is the Minister of Finance or Minister of Labour, I say stop it,” he declared. The next day, it was announced that the whole 2015 civil service reform plan had been frozen.
On Thursday, it was easy to see Chinamasa’s delight as he announced he could now send those youths away. The cuts would save the taxpayer $1.6 million per month and US$19.3 million per year, he said. That was another middle finger to his former boss.
Chinamasa’s biggest undoing was his inability to say “no” to Mugabe’s spending habits. By mid year, Mugabe had overspent on his travel budget by $23 million. His large delegations on foreign trips were a source of ridicule and a drain on government funds. Government officials often had to make embarrassing justifications for the spending.
“Diplomacy is not costless,” presidential spokesman George Charamba once said.
In his budget, Chinamasa took delight in announcing an end to all that. Delegations will be cut and travel will be minimised.
“Experience has shown that Zimbabwe delegations to regional and international fora being among the largest from the region at such gatherings,” Chinamasa said.
The numbers don’t lie
There is a lot that Chinamasa was once forced to do that he is now happy to bury publicly. He spoke freely against everything that Mugabe got wrong. The “policy inconsistencies”, a hallmark of Mugabe’s fumbling Government, and the “fiscal indiscipline” that reflected in the failure to adhere to approved budgets. Massive spending was “being incurred arbitrarily outside Budgeted Votes”. There was a failure to follow laid down systems, Chinamasa said.
Chinamasa used terms such as “paradigm shift” and “New Economic Order” and “new system” to try and drive home the point that this was a new Government that was determined to do new things.
But away from his triumphant words and his promises to end the old chapter, it is the numbers that show how big a job he has if he is to make a real clean break from the Mugabe era.
Most critics have immediately latched on to Chinamasa’s allocations, especially the fact that Defence got more than Health. But the bigger problem is not who gets what, but what it is being used for, and what Chinamasa can do about it.
The wage bill is still at 85 percent of revenue. So even if Health or Education do get more than the military, focus must be on the fact that most of it is being chewed by wages, not investment and operations.
His measures to reduce the wage bill include everything from retiring aged civil servants to cutting fuel allocations, but the cuts just don’t go deep enough. The yawning deficit, the source of inflation and liquidity shortages, demands that more sacrifices to be made. As long as Chinamasa cannot fix that deficit, it won’t matter much how much money is allocated where.
Chinamasa has enjoyed his first taste of freedom, and his “Free at last” joy was clear throughout his triumphant statement. But now that he is free of Mugabe’s shackles, Chinamasa’s true mettle will now be tested.