Sunday News
Reporter scoops award
THE period 2009-2012 was marked by an economic rebound from a severe economic meltdown that was characterised by hyperinflation, following the introduction of the multiple-currency regime. The multi-currency regime brought about price stability and tamed hyperinflation to zero levels overnight. The economy experienced a geometric average growth rate of 11,0 percent per annum.
However, GDP growth decelerated sharply from 10,6 percent in 2012 to 4,5 percent in 2013 with an estimated 3,1 percent in 2014. Real GDP was projected to marginally improve to 3,2 percent in 2015. The basis of this projected marginal improvement was the planned investments in agriculture, mining, communications and other infrastructure projects, including in the water and energy sectors. The negative impact of weak macro-economic policies, unfortunately began manifesting themselves in 2015 in a sustained negative inflation that has turned our economy into a deflation.
However, other factors like the continued firming of the US dollar against weak currencies, like the South African rand also contributed to deflation. The argument is, with strong macro-economic policies, a severe deflation could have been mitigated.
The weak macro-economic policies have ushered in a background of weak domestic demand, tight liquidity conditions, with inflation running in the negative from the last quarter of 2014, and with a sustained trend throughout 2015 to date.
Industrial capacity utilisation has continued to decline, and is estimated at 36,3 percent owing to underproduction and lack of competitiveness. The real exchange rate overvaluation relative to the South African rand has caused a loss in external competitiveness, as it has made imports cheaper than domestically produced goods and our exports more expensive.
Because of increasing demand for imports and dwindling export earnings, our external sector position is under severe pressure, with an estimated current account deficit of around 23,1 percent from 2014. Zimbabwe is still at high risk of debt distress, SUNDAY News senior business reporter Dumisani Nsingo has won the Best Print Journalist Award at the Small and Medium Enterprises 2016 Media Awards held in Harare on Friday evening.
The media awards were held concurrently with those of the SMEs sector during an International Expo.
Nsingo attributed the award to his unwavering coverage of developmental issues and the challenges being faced by smallholder farmers in their efforts to turn around their agricultural projects into viable enterprises.
“Winning an award is always exciting and a great
Fiscal Policy — The fiscal position remains tight, with the liquidity problem worsening by day, the situation is not good at all, and the country is still under debt distress. The large amount of current expenditures in this year’s budget is effectively crowding out capital expenditure, which is essential for medium and long-term economic growth. The weakness of public investment is exacerbated by the low borrowing capacity because of the high public debt overhang. The credibility of fiscal policy has been seriously compromised by underperformance on the revenue side of the budget. As more companies close and throwing employees into the streets, the net effect is a reduction of the revenue side of the budget. Thus, fiscal policy does not reflect the key development priorities and social objectives articulated in Zim Asset. Government expenditures, including loan repayments, for the 10 months of October 2014 to date have been running higher than or above targeted due to additional employment costs and higher loan repayments. Employment costs alone, excluding loan repayments, average 85 percent of total expenditures. The employment costs have been higher than budgeted as public wages and salaries were increased by the civil service salary review that was implemented from April 2014. The expenditure mix remains highly unsustainable, with current expenditures constituting about 96 percent of total expenditures in the budget.
Monetary Policy — There is express desire to continue using the multi-currency regime in Zimbabwe, regardless of the costs that certainly outweigh the benefits. The issue here is that the economic fundamentals are not right yet, to support the reintroduction of a local currency. The major costs being that our central bank effectively lost direct control over money supply, interest rates and the exchange rate.
The role of the Reserve Bank of Zimbabwe has therefore been largely limited to banking supervision and facilitation of the smooth operation of the national personal achievement, which comes through hard work, commitment and sheer determination to excel.
‘‘In this case I am glad to say that my articles that highlighted the challenges being faced by smallholder farmers and those that anticipate starting agricultural enterprises caught the eyes of the adjudicators,” he said.
He also paid tribute to the Sunday News family saying: “winning this award all comes to team work because all my workmates contribute to the final piece which comes out of our publication and as such I would like to extend my gratitude to all of them”.
The other winners were Zimbabwe Broadcasting Corporation’s Tapiwa Machemedze who won the Electronic Media category and Financial Express’ Nelson Gahadza who scooped the Best Online Journalist.