Zimbabwe’s Finance Minister Patrick Chinamasa says people should borrow money for productive purposes and chided that one cannot borrow money to pay lobola-bride price- for example, because a woman is not a tractor.
Speaking in the Senate during the second reading of the proposed Movable Property Security Interests Bill which will allow Zimbabweans to use things like livestock and cars as collateral to borrow money from financial institutions, Chinamasa said Zimbabweans had to change their mindsets to realise that they were not poor and could not grow their business without borrowing.
“You cannot create wealth using own resources,” he said. “You cannot raise yourselves using your own boot straps. You can yes, but the journey maybe too long to a point where you never reach where you want to go until you are an old man. So those who have initiatives cannot grow businesses without borrowing,” he said before being corrected by Senate President Edna Madzongwe to add “woman” instead of just ending on old man.
Chinamasa said it was important for Zimbabweans to change their mindsets and realise that they were not poor at all.
“A person will have 20 goats and he still has the audacity to tell others that he is a poor person and that he should be able to be dependent on the handouts given by the State,” he said.
“That is the mindset that we want to change. They must realise that they have got assets. Often I am very amused Madam President when in Makoni District, there are a lot of tobacco farmers. You ask one of them what he does and the person will say I am not employed, and yet he is a tobacco farmer delivering tobacco at the Auction Floors.
“So, that is the mindset that we want to change. All of us do not think that we can earn a livelihood when working for yourselves and even in terms of our surveys, we exclude all those people who are taking tobacco to the Auction Floors. We tend to regard them as unemployed. It is not correct.
“Those who are in artisanal mining, we take them as unemployed because we find them having sand all over their bodies and we end up saying they are not employed and yet they are probably richer than some of us. That is the mindset that I think this Bill seeks to change.”
Chinamasa said Zimbabweans must also realise that raring cattle, sheep and goats was a business and those assets need to be traded.
“You must never fall into a situation where you cannot pay your children’s school fees and yet you have got 50 head of cattle or you have got 30 goats and you do not pay for your child’s school fees because you do not realise that you can do business from trading in these assets,’ he said.
The Finance Minister said he personally felt that the collapse of Zimbabwe’s economy was blessing because it was changing the way people looked at things like employment,
“Let us take for example in the agricultural sector. We were talking about 4 000 farmers. There is no way an economy can grow and expand when a vital productive asset like land is held by one or two people. So, it is important that we realise that because we moved from that ownership of land and now we have the A1 farmers.
“We distributed that land to about 350 000 households, you can also multiply the number of people who are dependent on that piece of land. Now, that change caused disruption in our productive system. So, initially there was a fall of production, everyone was laughing at us.
“However, I cannot see how we could have gone from that skilled land ownership to the current one where it is now owned by the majority of our people, without a transition. There has to be a transition and what we are talking about here Madam President is how to manage that transition from yesterday to today and tomorrow.
“I am happy to say that we analyse these situations and try to come up with policies that relate to the reality of our situation. We are not doing textbook things; we are relating it to the people. Of course, as we do so, it will take time even for the people themselves to understand that this is an opportunity for them.”
Chinamasa said he was aware that Zimbabwe’s banks were conservative but they had to lend money out otherwise they would go out of business.
“Yes, the banking institutions are conservative, but when I talk about mindsets, I am talking not only about the mindsets of us individuals but of institutions also. The way I see it is that – and this is what we tell the banking institutions, if they do not face up to the reality of our situation, they will be out of business sooner or later,” he said.
“This is because the business of a lending institution is to lend money. If you are not lending, you get broke. You make money from the interest you charge when lending to people. If you do not lend, and as it is, they may say, we only lend to established firms but the base of established firms is reduced. So, in the end you cannot avoid lending to people who are plying their trade in the informal sector.”
Chinamasa said, however, the government could not force banks to lend money. That was between the banks and their clients.
“Banks’ main business is to lend but they want to lend to good borrowers who will use the money for the purpose for which it is borrowed and who will be able to pay. That is the relationship you will have between yourself and the bank,” he said.
“We cannot say for instance, Senator Chimhini, go to Barclays; and say you must lend to Senator Chimhini, who wants to build a house or buy cattle. If we do that it will not work. In fact, it may well end up that Senator Chimhini will end up borrowing just to go and marry other women. Muzukuru ndakukutsvinyira manje. You do not borrow to go and pay lobola; a woman is not a tractor.”
Click here for the full debate.