Unity of pur­pose will en­sure en­vis­aged growth

The Herald (Zimbabwe) - - Leader & Comment -

ZIM­BABWE’S econ­omy should grow by at least 3,8 per­cent this year, ac­cord­ing to es­ti­mates by the World Bank and that pre­dic­tion comes from hard-hearted, hard-headed con­ser­va­tive econ­o­mists. So there is a dis­tinct pos­si­bil­ity that if we do ev­ery­thing right we can do bet­ter.

The ba­sic pre­dic­tion as­sumes that with de­cent rains and Govern­ment ef­forts to get in­puts to farm­ers, most of this growth will be in agri­cul­ture. This is the same pre­dic­tion that Zim­bab­wean econ­o­mists had al­ready made and hence the Govern­ment’s pro­gramme of Com­mand Agri­cul­ture.

But it is pleas­ant to have out­side con­fir­ma­tion that we are do­ing some­thing right, es­pe­cially when prophets of doom wan­der around Zim­babwe claim­ing that the “present harsh eco­nomic en­vi­ron­ment” is eter­nal.

But the fix­ing of agri­cul­ture is not just help­ing to make the coun­try richer. It is also go­ing to help ame­lio­rate two other se­ri­ous eco­nomic chal­lenges: the se­ri­ous im­bal­ance be­tween im­ports and ex­ports and the grow­ing eco­nomic in­equal­ity.

A far bet­ter trade bal­ance, which most peo­ple no­tice through the short­age of im­ported bank notes, is au­to­matic with bet­ter har­vests.

If Zim­babwe can save $500 mil­lion on food im­ports and can ex­port more to­bacco and a lot more cot­ton then ob­vi­ously there are more ex­port earn­ings that can be spent on im­ports less im­me­di­ately crit­i­cal than food.

For many, the cash short­ages started loom­ing at the end of the last har­vest, when it be­came ob­vi­ous that a far higher per­cent­age of our di­min­ish­ing ex­port earn­ings were go­ing to have to be spent on food. At the end of the 2017 har­vest we should start see­ing a sig­nif­i­cant re­ver­sal of those dam­ag­ing trade im­bal­ances.

The sec­ond im­me­di­ate gain will be the growth of ru­ral fam­ily in­comes. Most of the ex­tra wealth gen­er­ated this year will be with these fam­i­lies and the rest of us ben­e­fit as they start spend­ing more. And the re­ver­sal of the de­cline in man­u­fac­tur­ing, per­haps the most im­por­tant eco­nomic trend of last year, means that much of that ex­tra money will be spent on Zim­bab­wean goods, rather than im­ported trin­kets.

This is ba­sic eco­nomics; if farm­ers have bet­ter in­comes then man­u­fac­tur­ers and ser­vice-providers have more cus­tomers. The spread of that ex­tra wealth should help re­duce in­equal­i­ties au­to­mat­i­cally and ben­e­fi­cially. Even the fam­i­lies grow­ing a small plot of maize on the side of the road in Harare ben­e­fit the econ­omy.

The money they save on food will be spent on other things.

The Govern­ment’s fi­nances ben­e­fit. Spend­ing less on food aid and get­ting more VAT on what farm­ers buy does help the Min­is­ter of Fi­nance bal­ance his books.

But all of these po­ten­tial gains mean that the im­mense ef­forts al­ready made to make this sea­son a suc­cess must be main­tained. We need to en­sure that farm­ers have the fer­tiliser to bring their crops to ma­tu­rity; that they have the her­bi­cides to kill weeds and that they have the in­sec­ti­cides to wipe out pests like army­worm and oth­ers that flour­ish in a de­cent rainy sea­son.

It is not just those in Com­mand Agri­cul­ture who need this stuff. Even the ur­ban plot-holder needs to be able to buy the odd bag of fer­tiliser, and he needs it in his lo­cal shop.

There is so much at stake that we must not, and can­not, re­lax our ef­forts un­til we see those trucks bring­ing the har­vest into our si­los and ware­houses, into farm gra­naries and store­rooms.

The World Bank’s pre­dic­tions are no guar­an­tee of suc­cess, but are a strong in­de­pen­dent as­sess­ment that if we con­tinue to do ev­ery­thing right then we will win. So let us all stop ar­gu­ing and keep push­ing on.

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