MUTARE– Government’s latest economic blueprint document which aims to leverage local resources through devolution is fraught with arithmetic errors, a sign which skeptics says reveals this is yet another paper tiger.
The National Development Strategy 1 which runs from 2021-2025 erroneously assumes a population of 11.3 million in 2020 which is less than the last census and even less than our current population hovering around 16 million.
Zimbabwe can be classified as being in a vicious cycle of poverty and has all the signs, low incomes, low productivity, low savings, low demand, low capital formation and strategy documents must address these fundamental issues, said an economist.
Dr Prosper Chitambara, an economist said any strategy document must address these fundamental issues to drive sustainable development.
He said the NDS success hinges on sustainable financing models which leverages productivity enhancing sectors through deliberate domestic resource mobilisation.
The NDS avoids going into details with what Public Finance calls Gross Fixed Capital Formation (GFCF), although this is the amount of capital required to achieve any proposed growth, where without capital injection growth is impossible.
“The challenge of low productivity low incomes would require greater investments in the key enablers of infrastructure, social services, public health, social welfare, water and sanitation what we call the productivity enhancing sectors of the economy.
“If the financing is really in place to upscale those critical investment. Ultimately it all comes down to financing, sustainable financing. In other words we have to be relying more on domestic resources.
“We need to have the right institutions to drive the NDS, and ensure its implementation, these are the two key issues,” said Dr Chitambara.
An economist who declined to be named for official reasons, said treasury cannot be trusted and is playing around with figures, making erroneous assumptions and falsifying information in the document.
He said another technical blunder, in a document is laden with arithmetic problems, is a faulty conclusion that the economy will decline by 4% in 2021 to $13.1 billion down from 18.5 billion, this translates to 30 percent decline.
“Treasury cannot change numbers randomly. The 2019 GDP according to Treasury was $18.5bn while the NDS has 2020 at $13.1bn using the official exchange rate. That’s a 30% decline in GDP that is not 4%.
“An average compounded growth of 5% per annum on real GDP of 13bn in 5 years or 10years for that matter with current population means per capita will be less than $1k. The 2025 numbers are not feasible under treasury own numbers,” said a source.
The source said in its current form, the NDS 1 was another paper tiger which would not translate to sustainable development but lead to a debt trap.
“The NDS is not entirely sure of the external debt to GDP ratio and seemingly fails to include does not include $5bn debt held with RBZ as well as the $3.5 billion set for farmer compensation and other parastatals. This is a very clear debt trap,” said the source.