… country losing US 1.8 billion annually to graft

Beverly Bizeki

Efforts by Zimbabwean government to curb corruption seem to be fruitless as the country continues to bear the ugly fruits of the scourge which has seen it losing an estimated US $1.8 billion annually.
As the country commemorated the 20th anniversary of the International Anti-Corruption Day on December 9, 2022, a look at the economic situation in Zimbabwe tells a sad story as it is plunged into deep poverty coupled with current power black outs and inflation continually rising.
Zimbabwe Anti-Corruption Commission Deputy Chairperson Kuziva Murapa officially lamented the loss of capital to corruption and said this causes a drawback in the progress of the nation.
“Zimbabwe alone is estimated by the Reserve Bank of Zimbabwe (RBZ) to be losing about US$ 1.8 billion annually due to illicit financial flows. This leaves governments with little or no resources to fulfil their obligations to their citizens,” said Murapa.
The day was celebrated under the theme, ‘Uniting the World against Corruption’ with Zimbabwe coming up with its own ‘Uniting Zimbabweans against corruption’.
Murapa also noted efforts by government to fight corruption citing the adoption of legal frameworks particularly the whistle-blowing.
“Allow me to highlight that our legal regime has a great lacuna in terms of the existence of a whistle-blower and witness protection framework. This has a negative effect of retarding potential whistle-blowers from whistleblowing due to fear of victimization. Therefore, corrupt people are left scot free due to lack of evidence incriminating them to acts of corruption. However, allow me to express my deep gratitude to cabinet for approving the principles of the whistle-blower framework,” added Murapa.
Guest of honour at Masvingo City commemorations Minister of State for Provincial Affairs and Devolution Ezra Chadzamira became the first to sign the integrity pledge in the fight against corruption together with other department heads at the ceremony.
The anti-corruption day commemoration is born out of the global realization of the need for countries to continuously reflect on approaches adopted in the fight against corruption.
Other stakeholders who attended the commemorations include the Zimbabwe Revenue Authority (ZIMRA), Zimbabwe Republic Police (ZRP), Transparency International Zimbabwe (TZI) and Supreme Council of Islamic Affairs in Zimbabwe among others.

TellZim Reporter

Hate him or like him, Great Zimbabwe University (GZU) Vice Chancellor Professor Rungano Jonas Zvobgo made history when he was ordained the second bishop of the African Reformed Church at Shonganiso Mission on Saturday last week.
Professor Zvobgo is the first and only Vice Chancellor in Zimbabwe to be ordained bishop of a church.
The colourful event was witnessed by President Emmerson Mnangagwa who praised Prof Zvobgo for defying odds and answer to the calling of becoming a religious leader despite holding a very senior government position.
President Mnangagwa urged Prof Zvobgo to lead by example making sure that he grows the church which was started by his father in 1956.
“My advice to you is that you must not lead alone. Find deacons and other righteous man that will help you to lead and grow this church. We know you are an able leader; we are proud of you in government and we expect you to continue with that leadership style,” said Mnangagwa.
Zion Christian Church (ZCC) Bishop Nehemiah Mutendi and leader of the Worldwide Family of God Church Prophet Andrew Wutawunashe who were leading the installation and ordination process thanked Professor Zvobgo for accepting to lead the church which was founded by his father.
Both Bishop Mutendi and Prophet Wutawunashe shared emotional speeches as they chronicled how Africans were victimised for starting their own churches during the colonial period.
Speaking to a local radio station in Masvingo just before his ordination, Prof Zvobgo revealed that it all started 32 years ago when his late father Jonas Mudadigwa Zvobgo asked him to be his successor.
“It took me over 30 years to come to this decision. My father wanted me to be his successor and he would sometimes send people to my work place to plead with me to accept being a bishop but I could not accept because I was not ready then.
“Everything has a time…this is the right time for me to become a bishop,” said Prof Zvobgo.
On how he was going to balance between university work and Church leadership demands, Prof Zvobgo was very clear that there was not going to be any conflict of interest as his new role complemented his work in government.
“There is no conflict at all, in fact, my new role will complement my duties in government. We must continue to help the young ones so that they fear God and know how to do good,” he added.
While accepting his new role at Shonganiso, Prof Zvobgo told hundreds of people that he was going to make sure that his church complements government vision in terms of production.
“I will be working with you as bishop but I will also take some of the things that we do in government such as implementation of Education 5.0 and make sure you all understand what it means. I will personally make sure we complement government efforts in production…we must not just wait to be spoon fed. No. We have to work,” said Prof Zvobgo.
President Mnangagwa also took that opportunity to urge the church to preach peace. He said his government was not going to tolerate any forms of violence.
“Let us preach peace all the time. If you see someone coming to your home and you suspect that they are not peace lovers, please show them exit door so that they must never be with you for a moment. We want peace,” said Mnangagwa.
President Mnangagwa also donated an ambulance to Shonganiso Clinic at the same event.

According to the statistics authority, Zimbabwe National Statistics Agency (ZimStat), price inflation eased in the month under review. The statistics show that general prices as measured by the all-items Consumer Price Index (CPI) spiked by 255% in the last 12 months ending November 2022, down by 13.8 percentage points from the previous month’s outturn. From a month-on-month (MoM) perspective, the inflation rate decelerated from 3.2% recorded in October 2022 to 1.8% in November 2022.

The ZimStat disaggregated inflation data by province shows that Mat South had the highest monthly outturn followed by Harare (2.8%), Mat North (2.7%), and Bulawayo (2.1%). Granular analysis of the figures shows that at 301.4% YoY & 0.9% MoM, the Food category (which is 30.34% of the total consumer basket) was the main driver of inflation. Meat (4.4%), fruits (1.9%), food (0.9%), fish &sea food (0.8%), and food products N.E.C (0.4%) were the groups with high inflation in the month. Accordingly, an individual required about ZWL21 652.27 in November 2022 to meet the minimum needs basket cost (Food Poverty Line, FPL). The FPL is the minimum income required by a person to afford a daily energy intake of 2 100 calories. As for the Total Poverty Consumption Line (TCPL) -the total minimum income an individual needs to purchase both non-food & food items for them not to be deemed poor- official statistics show it closing November 2022 at ZWL28 516.73, up 1.3% when compared to October 2022 amount of ZWL28 144.07. It, therefore, means an average household of four (4) needed a minimum income of ZWL114 066.92 in November 2022 to be considered out of poverty.
The public applauds both monetary and fiscal authorities on some of the policy actions they have implemented in recent months to slow inflation growth. November 2022 completed five (5) consecutive months of disinflation trajectory, a trajectory that began in July 2022 when monthly prices slid by 5.1 percentage points to 25.6% from 30.7% recorded in June 2022. Now, buoyed by this rapid disinflation path, the government has projected an average monthly inflation of between 1-3% in 2023. The authorities expect this inflation target to be anchored by a tight monetary policy stance, stable Zimbabwe dollar (ZWL), and sustainable fiscal spending as shown by projections of a “sustainable” fiscal deficit of 1.5% of national output (GDP) as stated in the 2023 budget statement.
If realized, a stable price environment will bring great relief to citizens, particularly the poor majority who are earning way below the poverty datum line (PDL). This is because the massive ZWL depreciation and elevated prices experienced for most of 2022 have largely eroded real incomes, lowered aggregate consumer consumption, widened income disparities, and plunged the majority into poverty. For instance, the 2022 World Bank statistics show that at least 40% of the population is living in extreme poverty in Zimbabwe. Also, the local currency & price volatilities have hugely affected business predictability. As I explained in last week column, business predictability is key because it enables great market fit and quality customer service while eliminating waste and inefficiencies to build a strong foundation of sustainable enterprise. In addition, an astronomical spike in the Reserve Bank of Zimbabwe’s (RBZ) benchmark policy rate from 80% to 200% has fuelled the cost of money. More so, high fuel prices as well as prolonged electricity load-shedding schedules compounded the cost of doing business in 2022. Generally, a high-cost environment feeds chronic inflation and scares away private-sector investment which is key in powering GDP, incomes, and employment growth.
However, it remains to be seen if the Reserve Bank of Zimbabwe (RBZ) will be able to meet this inflation target given the likely risks to the outlook. The forthcoming general election will likely derail the sustainability of the Treasury spending path. For instance, a projected 136.8% jump in budget expenditure ceiling to ZWL4.5 trillion in 2023 from 2022’s ZWL1.9 trillion can attest to this assertion. If the national output growth is expected to decelerate further in 2023 from 2022 levels, the public can then ask: What is informing the Treasury’s projected jaw-dropping spike in revenue collections by Zimbabwe Revenue Authority (ZIMRA) next year? From an outsider’s perspective, it is evident that fiscal authorities are anticipating elevated ZWL depreciation and sustained price increases in 2023 -high prices mean increased revenue collection for ZIMRA. Also, based on recurring deadly political clashes like cases in Matobo and Gutu, there is a high chance for the upcoming election season to degenerate into full-blown political violence, civil unrest, and abuse of human & political rights.
Furthermore, the 2023 proposed budget shows that the government is facing an increased public borrowing requirement in 2023. Public debt will jump significantly in 2023 as Treasury faces a mammoth task of financing a ZWL575.5 billion budget gap comprising an overall deficit of ZWL336.9 billion and net loan repayments of ZWL248.6 billion. The Treasury proposed to finance this deficit by issuing a US$100 million domestic bond, US$400 million external loan facility is expected from Afreximbank, and ZWL82.8 billion treasury bills (TBs). Ahead of the 2023 harmonized elections, the Treasury will also gobble tens of millions of US$ as loans to lawmakers and cabinet ministers together with their deputies which have debt ramifications. An unsustainable debt level depletes national reserves, crowds-out both private investment & public service delivery, constrains the countercyclical effects of fiscal policies and heights long-term market interest, tax, and inflation rates, among other effects.
More so, electricity shortages will likely persist in the first half of 2023 due to limited imports, uneconomical tariffs, constrained production at Kariba hydropower, and frequent breakdowns at nation’s aging thermal power stations. Electricity is a key business enabler; its scarcity increases business costs, balloons the inflation burden, and strains household budgets. The COVID-19 pandemic and Russia-Ukraine war with an indeterminate end also pose a greater risk to the price inflation outlook. For instance, the sanctions and countersanctions caused by the war are negatively affecting global supply chains, trade, production, and cooperation. As such, I expect the resultant elevated global inflation to continue for most of 2023 thus presenting a great risk for perennial net importers like Zimbabwe.
Therefore, to help suppress excessive price growth in 2023, the authorities should consider some of the alternatives proffered herein:
• The authorities should implement complementary monetary and fiscal policies, with the latter spending sustainably to ensure and maintain the sustainability of ZWL liquidity growth in the market.
• Government should intensify engagement & offer lucrative incentives to independent power producers (IPP) to increase domestic production of renewable energy. These incentives can be extended to businesses and households to increase their uptake of solar energy thus bringing relief to the constrained national grid.
• The existing high tax environment is adding to business costs and subduing disposable incomes. Hence, domestic resource mobilization (DRM) should be expedited in 2023:
o curbing leakages from corruption & illicit transactions
o lowering tax compliance costs
o reducing capital controls
o strengthening taxpayer motivation & education
o formalizing informal businesses.
• Robust reforms (economic, structural, electoral, etc) should also be part of the policy mix to reduce prevailing growth-retarding pricing distortions, avoid crowding-out of public service delivery, protect rule of law & property rights, and help Treasury secure the direly needed support from its creditors to meaningfully resolve the decades-long debt conundrum.

Zvikomborero Sibanda is an economic analyst and an astute researcher. He writes in his personal capacity. He can be contacted via email:

bravosibanda@gmail.com
Twitter: @bravon96