Economic review: 90 days into 2017

THE first 90 days of this year have come and gone and we look back and analyse what has happened so far in our economy. Congratulations to what we did right and strong condemnation to the mistakes made. We need to move with urgency in doing those things that ensure a prosperous economy.

Indeed Zimbabwe has received above normal rainfall this year and most dams are spilling, which is a good start for the year. This has impacted positively on the agriculture sector with prospects of higher yields. We now need to work swiftly on our storage facilities across the country and ensure timely payment of grain deliveries. The country has also suspended grain imports, which is a good development.

We expect improved yields to result in the reduction of prices of stockfeed, mealie-meal and increased agroprocessing capacity.

There are interesting developments in the tobacco sector, which has so far realised $47 million from sales since opening of the marketing season a few weeks ago. We applaud farmers for their hard work but the 10 percent tax recently announced by Zimra, has shocked farmers. Cotton farmers are also expecting good yields this year and this will boost the textile and clothing industry. There is however, a need to grow soya beans to provide raw materials for cooking oil producers as opposed to relying on imported raw materials.

We expect these positives to create jobs in the second quarter. What is encouraging is that the retrenchment figures have drastically gone down this year..

Moving into the financial services sector, we noted how the Reserve Bank of Zimbabwe has been strengthening the sector to bring about profitability, corporate governance and productive inclinations. We need to cement these by enhancing confidence in the sector through reduced interests rates and processing applications fore forex on time. Inflation is now back on the positive territory and there is need to watch out for this former number one enemy of the economy, which is not demand driven.

We just need to get our underlying economic fundamentals right to tame this unwanted animal. Most companies that opened up shop in 2017 are soldiering on despite the biting economic conditions. More needs to be done to support them and ensure they grow and reach efficiency levels. Those in debt need to honour their obligations to enhance trust.

We need to address our domestic debt as a country as well as address cost drivers that continue to impinge on production efficiency. These include utilities charges, salaries and allowances, fuel, raw materials, cost of finance and communication technology. These militate against competitiveness.

Our charges are still too high given the prevailing economic activity when compared to regional benchmarks. Cash shortages continue to haunt the economy despite use of plastic money. The US dollar continues to magically disappear, which points to exports deficiency and rampant imports and leakages.

The multi-tier pricing behaviour on the market is destroying the economy. Encouraging cash purchases is retrogressive given the cash shortages in the economys. Let us resolve challenges than creating other headaches through round table frank discussions between stakeholders.

As a nation we need to tame the appetite for imports and walk the talk on the Buy Zimbabwe campaign. More needs to be done to package Zimbabwe as a tourist destination so as to achieve the $5 billion target set by Government by 2020. There is a need to encourage local tourism by pricing right maybe a two tier pricing regime. We need to invest more in key infrastructure and hasten completion of set projects in power, water and solar technology as there is slow progress.

Bond notes have worked well so far but we need to reduce our cost structure as a country to support growth of the productive sector.

Statutory Instrument 64 of 2016 has created a market for local firms but we need to consolidate this with increased output. Sprucing up the rail and road network as well as capacitating mining firms is also crucial for the economy. The country needs a robust retooling programme to enhance industrial efficiency. This includes supporting SMEs and formalising the informal sector, which now employees the bulk of workers. We acknowledge that ZAMCO has cleaned up banks balance sheets and the sector is profitable but there is also a need to relook the Treasury Bills financing route to avoid Government over crowding the market.

The Special Economic Zones law is now in place and now the country expects tangible programmes and investment activity on the ground. Like Finance Minister Patrick Chinamasa said, this country needs production.

As a country we need to start producing aggressively and competitively in order to claim our global market share. In doing everything, let us bear in mind that we have one Zimbabwe and one economy to defend and develop. When united the country prospers but when divided we will tear each other apart at the expense of future generations.