Mugabe's mortuary of dead assets
- From: "Zvakanaka" <lalapansi@xxxxxxxxx>
- Date: Fri, 13 Jul 2007 11:43:51 +0200
Editor's Memo
The Zimbabwe Independent
Mugabe's mortuary of dead assets
By Vincent Kahiya
SINCE government launched the current war on prices, awestruck stakeholders
have been gazing into the horizon to see where this rush of blood into
government's head will take us to.
Already we have seen arrests of company executives, empty shop shelves,
retrenchments and reduced productivity in industry. But the impact of this
madness is going beyond that. The government of President Mugabe is once
again travelling a well-beaten path: that of converting national assets into
dead capital.
Increasingly, national assets can no longer be used to their full potential.
These are institutions that give life to an economy and facilitate the
creation of wealth. They are fast diminishing.
Two events this week aptly demonstrate how our government is shamelessly
strangulating instruments that should be creating wealth for the country.
There was a report on Monday that thousands of tonnes of harvested sugarcane
at the state-run Arda Chisumbanje estate were left to rot in the fields and
hundred of hectares of the crop was wilting in the fields due to moisture
stress. This is the same parastatal responsible for another blunder which
saw 500 hectares of wheat failing to germinate.
On Tuesday, the Cabinet Taskforce on Price Monitoring decreed that it had
cancelled licences for all abattoirs, making the ramshackle state-owned Cold
Storage Company the only firm allowed to slaughter cattle. This means that
abattoirs such as Montana Meats, Pama Meats, Carswell Meats, Mutasa Meats,
Lishon and so on were overnight transformed into dead capital because they
could not avail meat at the government controlled price of $100 000 a kg.
The smaller abattoirs entered the industry because of the degenerating state
of affairs at the then Cold Storage Commission which hopelessly failed to
service export quotas as well as the domestic market. The company was only
rescued from the scrapyard following President Mugabe's declaration in
Marondera last year that the company should reopen its closed abattoirs.
This is the same contraption that is now being entrusted with providing meat
to the country. Last week in this column, I questioned where President
Mugabe had learnt this form of destructive economics. More traits of these
disastrous tendencies are becoming clear. In Zanu PF's scheme of things, the
only way they can create business for the corrupt and shoddily-run
parastatals is to use heavy handed tactics to push private sector
competitors out of business.
We have seen this in the transport sector where private operators are daily
hounded by the police to give Zupco leverage. Despite its massive
advantages, Zupco's depots today are littered with broken-down buses only
recently launched onto our roads with much pomp and ceremony. The story is
the same with the GMB whose monopoly in grain trade killed the Zimbabwe
Commodity Exchange which afforded producers competitive prices. Today, GMB
silos have also become dead capital because farmers have resisted selling
their crop to the parastatal for a give-away price.
The flagship citadel of destruction remains Kondozi Farm in Odzi which after
rape by the state was reduced to a wasteland. This piece of land used to
produce vegetables and fruit for export to Europe and South Africa. It is
now dead capital together with vast swathes of farmland seized under the
agrarian reform.
The same goes for scores of parastatals presided over by the state. They are
not producing wealth for the nation but they instead rely on the handouts
from the fiscus for their survival.
This is where the current price blitz is heading. It is rendering retail
outlets, butcheries, abattoirs, factories and buses dead capital.
The closure of abattoirs this week could be a harbinger of worst things to
come for this already floundering economy. Contemplating the Kondozi pretext
in the case of the abattoirs would be ghastly. After the forced takeover of
the estate, the state looted equipment in the name of transferring it to
Arda Estates - whose exploits on the land are a scandal. The equipment never
got to Arda. It was stripped of key assets like tractors, lorries and pack
yard infrastructure. The government brought in soldiers to till the land and
they failed dismally in this endeavour. This is how the state killed that
vital asset and private abattoirs could befall the same fate. The lunacy is
most likely to be extended to other sectors of the economy with disastrous
consequences because the government does not have a post-blitz plan to
ensure that manufacturers continue to produce and retailers remain open.
With a whole mortuary of non-performing assets, this economy will be much
harder to revive. For a government that has presided over so much death and
destruction the current exercise is routine business.
.
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