Kuda Sterp Assignment

8/9/2019 Kuda Sterp Assignment

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MIDLANDS STATE UNIVERSITY

FACULTY OF COMMERCE

DEPARTMENT OF BUSINESS MANAGEMENT

STRATEGIC MANAGEMENT

LEVEL 4.2 PARALLEL

NAME SURNAME REG. NUMBER

Tafadzwa Murungu R0645048

Kudakwashe G Chapanda R0645087

Edina Tengende R0645047

QUESTION:

Evaluate the adequacy and relevance of STERP 1 and STERP 2


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Mindful of the urgent need to restore economic stability, immediately after its formation,

the inclusive Government, on the 17th of March 2009, launched a home-grown economic

blueprint, the Short-Term Emergency Recovery Programme (STERP). STERP is a

stabilization programme, which lays the basis for a more transformative medium- to

long-term economic programme.

The Finance Minister Tendai Biti launched the 3 year Macro-Economic Policy and

Budget Framework: 2010-2012 (STERP II) as a follow-up recovery programme to the

Short Term Economic Recovery Programme (STERP) which he announced when he took

office at the beginning of the inclusive government in February 2009. The Minister said

the vision of both programmes was to create a functioning, democratic and viable

economy. Both STERP Programmes prioritize and pursue democratisation as well associo-economic strategies that guarantee the integrity of the poor in the economic growth

policy framework.

The implementation of STERP was to a greater extent not successfully implemented.

This is because it did not consider how the country will get the finances to finance its

operations. Robertson (2010) stated that, bringing about the recovery would be

challenging enough even if the country had actually suffered from the claimed effects of

sanctions, but Zimbabwe began to suffer from self-inflicted damage long before

anyone reached for the almost entirely invalid sanctions excuse. If this enlarged and

revised document included any evidence that the recovery proposals included efforts to

repair the damage deliberately done, assistance would almost certainly be offered much

more readily and much more generously. But no such lines appear in the text, or to

address the fact that the countrys problems are as serious as they are because decisions

were taken to close down Zimbabwes biggest business sector and to dispossess the

investors who had built this capacity.

What does appear in the statement is that, The Framework strategies to transform

Zimbabwes agriculture will involve a greater reliance on efficient inputs delivery and

farm output marketing systems and a smooth integration of agriculture with the domestic,


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regional and international markets. Regrettably, the phrases suggest we will all be

putting our trust in bureaucratic procedures in the apparent belief that they can make

business acumen and talent unnecessary. The importance of the people who had already

transformed Zimbabwean agriculture and who used to be relied upon to deliver all of the

efficiencies required is not acknowledged, not recognised and not admitted.

Dairy development Consider the paragraphs under the heading Dairy Development:

Challenges experienced with overall livestock production have also undermined dairy

farming. As a result, raw milk supply, which was 256 million litres per annum in 1990,

has since fallen to current levels of 23 million litres. This is against national demand of

96 million litres, and an installed capacity of 350 million litres.

The general decrease in dairy production is also a result of viability challenges,

unavailability of stock feeds on the market in previous seasons, as well as crippling

labour shortages. The Framework targets increasing dairy production to around 25

million litres in 2010. Supportive measures during 2010 to 2012 include support for

growth in the dairy herd, which had been depleted to around 140 000, against an all-time

high of about 1.4 million.

Simply dishonest While a few facts can be identified in those lines, the relevant facts are

missing and some of the claims are simply dishonest. Dairy farming was not undermined

by livestock production challenges. It was undermined by the eviction of the owners of

nearly all the dairy farms in an acquisition process that destroyed a large percentage of

the dairy herds. True enough, livestock production challenges did follow, but for

reasons carefully avoided in the STERP II document. The relevant facts are that highly

skilled dairy farmers used to produce more than 10 times the current volume of milk, and

because this was well in excess of national requirements, a wide variety of diary products

could be exported. Now that production is about a quarter of the countrys requirements,

substantial imports are needed.


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The confiscation of dairy farms, complete with the massive investments in equipment and

breeding stock, was as expensive to the country as it was unjust to the investors who had

created the businesses. The claims now implied in the STERP II programme that the

industry can be revived as if all this never happened and as if people who acquire such

farms for nothing can run them as well as those who spent sometimes a lifetime building

them is as dishonest as it is stupid.

Choosing to redefine farming as a social or even political activity instead of a business

activity does not release the population from its need of food or paid employment, any

more that it releases food processing factories of their need of agricultural inputs.Equally, any attempt to claim that farming skills are inborn, natural, inherent, intuitive or

instinctive simply denies the existence of the vast range of technical, scientific,

engineering, financial and marketing experience that farmers need in order to survive.

Glaringly obvious in urging the international community to assist the Government in its

economic recovery and growth endeavours, the Deputy Prime Minister was perhaps

unaware of facts that are glaringly obvious to nearly everyone else: Zimbabwe used to

stand out as one of the Third Worlds most successful developing countries, but it chose

to impose policies that have damaged or destroyed most of its productive capacity. It is

now asking for assistance, not to put things right by fixing what was broken, but to meet

import bills, recovery expenses and lost tax revenues with money that taxpayers in other

countries have to earn and donate to the people of Zimbabwe. All this is necessary so that

Zimbabwes government can pretend that it has done nothing wrong and has no need to

admit making mistakes.

As is the case with almost all aid, transfers of money to meet these requests will do

Zimbabwe no favours. Unless the country places its future into the hands of competent

investors and business operators who can again base business decisions on the rule of


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law, on property rights and on security of tenure over freehold property, the country will

remain dependent on aid. Zimbabwe certainly needs aid. But it should come with the pre-

condition that steps be taken to re-engage the Zimbabweans who have the skills needed to

place the recovery onto a self-sustaining path.

Quality, affordable and readily available health care and delivery remain a priority for

Government under the Framework, consistent with the Millennium Development Goals.

Challenges for the Framework include restoration of the gains the countrys health

delivery system had witnessed since independence and up to year 2000.

Compromising these gains were the economic challenges that the launch of STERP set

out to address, with regards to the human resource base, supply of drugs, healthequipment and infrastructure, and conditions of service for health personnel. Already,

some initial progress has been made towards the reversal of deterioration in the health

delivery system, with improvements noted on all the above milestones during

implementation of STERP.

Major challenges remain with regards to the rehabilitation and re-equipping of medical

infrastructure, notwithstanding STERP interventions which have seen restoration of

haemodialysis services at both Harare Central and Parirenyatwa Hospitals.

One of the major pillars of STERP was Social Protection whose focus was to mitigate

poverty and suffering by resuscitating public services delivery, and strengthening

humanitarian assistance, particularly focusing on Specially Targeted Vulnerable Groups,

including women, children, the disabled, the elderly and child-headed families.

The review of Social Protection Programmes under STERP has already alluded to the

resource constraints which undermined the implementation of cash transfers through

public works.

In the petroleum sub-sector, projects on ethanol blending and jatropha biodiesel

production will be expanded. This plan was not a success due to a number of factors and

these include lack of agricultural inputs to the farmers. Jatropha is also seasonal which


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means that we were going to have more fuel seanally as a nation. They are also not all

parts of the country that are suitable for growing the plant. This was not a relevant

decision looking at the economy of Zimbabwe

The proposed amendments seek to broaden the ownership rights in the mining sector in

line with the Indigenisation and Economic Empowerment Policy, promote foreign direct

investment, enforce the "use it or lose it" principle so as to decisively deal with

speculative holding of claims, and to reform the Exclusive Prospecting Order system in

order to facilitate exploration for new mineral deposits. This was expected to boost

mining yet it is giving 51% of ownership to Zimbabweans who will have not invested

anything. To this extent the investor will not have control over his investment.

Complications are still going on at Chiyadzwa diamond mine and we keep on saying weare reach, we have many minerals were and how are they helping the country. Investors

are also expected to invest at Kariba Power Station, nothing has happened but instead the

station is continuing to deteriorate, currently there is one plant that is operating.

The shortage of capital should, to some extent, be alleviated by the credit lines pledged

by various development partners. In addition, Government is reviewing the Industrial

Development Policy framework so as to facilitate the promotion of value addition and

productivity in the sector. This was closer to reality, we saw countries like South Africa

and Botswana providing financial assistance. From Botswana documents were to be

signed for a USD70 million in March this year.

Such projects include the expansion of Kariba Power Station, Gokwe North Thermal

Power Station, coal-bed methane power project and the Batoka hydropower station.

Plans for these stages went unsupported as the level of power supply is continuing to

lower in Zimbabwe. Most of the industries are struggling to operate as they have adopted

to the use of generators but this cannot lead to more and cheap production. The of

generators invalidates the sense of economies of scale.

This programme is envisaged to yield an additional 710 megawatts to the national grid

within a few months' time. Efforts to engage potential investors for the development of


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new power generation projects will continue in earnest. This is also not in support with

the indeginisation act. No investor will want to donate an investment. The situation at

Kariba Power Station is not as was planed in the STERP.

Reference:

http://allAfrica.com

http://www.thezimbabwean.co.uk/

www.pfphosts.com.
http://allafrica.com/http://www.thezimbabwean.co.uk/http://www.pfphosts.com/http://allafrica.com/http://www.thezimbabwean.co.uk/http://www.pfphosts.com/

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Kuda Sterp Assignment