Zim@44: Forging ahead with economic growth

ADDRESSING the nation yesterday from Murambinda B High School, the centre of the national celebrations of the 44th anniversary of Independence, President Mnangagwa, while acknowledging the severe drought this year, was upbeat and positive about Zimbabwe and how it is coping.

The drought, the most severe for 40 years and basically the worst in the post-independence era, was declared a state of disaster by President Mnangagwa recently, largely to allow the necessary allocation and reallocation of resources to cope with its effects. Once a state of disaster is proclaimed, a lot of emergency measures can be taken.

The President recommitted himself and his Government to ensuring that no one would go hungry and that all that needed to be done to cope would be done. As he has said before, this would require allocation of resources and probably some reallocation of resources.

But the point is that the major economic efforts of the Government since the advent of the Second Republic means that there are these resources to allocate and reallocate, which was not necessarily the case when President Mnangagwa took office.

While Zimbabwe has already started receiving some help from the United Nations system and is likely to gain more, including help from development partners, this simply makes it easier to cope, rather than makes it possible.

Such a severe drought, which has hit the whole of SADC and especially the middle belt where Zimbabwe lies, is a blow, but on the other hand along with Covid-19 and other emergencies, is one of those things that governments are there to deal with. This is what the Government has been doing over the sanctions, mobilising Zimbabweans to deal with each problem, and doing so successfully.

So President Mnangagwa made it clear that Zimbabwe, while coping successfully with serious problems, was still pushing ahead with economic growth, largely driven by its pro-investment strategy that has already achieved so much. Some of this growth is going to be driven by the drought-alleviation steps, the rapid expansion of irrigation as the new dams are connected to the farmers.

The President highlighted mining, where the effects of a major investment drive have been most spectacular with the more than quadrupling in value of output under the Second Republic. One point that we need to remember is that while a lot of this investment has been external, and most welcome, Zimbabwe is now part of the process, largely through companies falling under the Mutapa Investment Fund.

This is important, pushing up the percentage of investment from domestic sources but doing so to accelerate investment rather than trying to limit the amounts other investors are allowed. The actual policy is to press for the maximum investment, regardless of source, to accelerate development and growth, but through Mutapa and the Zimbabwean private sector, to have Zimbabwe investing ever more rather than just leaving it to others.

One area of investment that will prove crucial this year is the growing amount of commercial solar power now flowing into the grid. Again this is the result of Second Republic policy, converting a potential and a pile of paper inquiries, licences and the like into large solar arrays.

Already the independent producers are generating and feeding around 60MW into the grid, and over the next three months this is expected to roughly double, as installations and work now in progress reach completion. That effectively replaces one of the Kariba South generators that Zesa has been forced to shut down as a result of the low lake levels, another direct effect of the regional drought.

But the end of the year it is likely that something close to a second generator’s worth of solar power will be on grid, so with the backing of investors, and some of these are Zimbabwean private sector, we are overcoming other serious effects of the drought as well as laying the foundation for accelerating future growth.

The results of an investment commitment are not instant. It usually takes at least two years from filling in the forms and making the commitment to commissioning the new works, and sometimes this can take even longer. The lead time is the time to line up the equipment and do the initial works. But by now quite a lot of investment work is coming up for commissioning, hence the recent travels around the country by the President as he officiates at ceremonies when the next investment comes on line.

The President brought up the hopes and achievements of shutting down the unlamented Zimbabwe dollar and launching the new ZiG currency backed by gold and foreign reserves. And the success of that currency has been marked.

In the eight trading days since the launch, and the trading is done entirely by the commercial banks rather than the authorities, the ZiG gained a little in value each day, gaining 1,6 percent on the starting price at the launch by Wednesday. It has been a long time since a Zimbabwean currency has had a straight eight-day run of gains against the US dollar, showing that the concept has obviously attracted willing sellers and willing buyers.

The President also stressed the social progress being made, and which again, like economic progress, needs to be accelerated, and a lot of the required progress involves all Zimbabweans. Gender-based violence is decreasing, but President Mnangagwa wants that progress pushed harder. He wants churches and communities to become more involved in fighting drug and substance abuse, even while the authorities push hard to dry up supplies and rehabilitate users.

A major theme of the President’s address appears to be that none of us can really do everything alone, so we have to work together to get a lot of what needs to be done accomplished. The Government can do its share and can co-ordinate where necessary, but essentially a better Zimbabwe at 45 next year requires everyone to spend the next 12 months doing our share, no matter how small or how big. And there is a lot to do.