Eco­nomic turn­around on track

The Manica Post - - Business News - Tapi­wanashe Mu­ton­hodzi Post Cor­re­spon­dent

ZIM­BABWE’S eco­nomic turn­around should be on track fol­low­ing mas­sive in­ter­ven­tion by Gov­ern­ment to re­align the eco­nomic sec­tors to­wards a pro­duc­tive econ­omy.

Quite a num­ber of eco­nomic in­ter­ven­tions in­tended to straighten the Zim­bab­wean econ­omy such as the much pop­u­larised Com­mand Agri­cul­ture has been a suc­cess lead­ing to a first ever bumper har­vest the coun­try had longed to achieve af­ter the land re­form pro­gramme.

In this light, in­ter­ven­tions that have been con­sid­ered and can be seen to aid in re­vamp­ing the econ­omy in­clude For­eign Di­rect In­vest­ment (FDI), in­crease of ex­port earn­ings, sta­ble pric­ing sys­tem of goods and ser­vices and paras­tatals re­form among oth­ers.

Part­ner­ships with other coun­tries should see an im­prove­ment on FDI, FDI refers to busi­ness in­vest­ments done by a com­pany or an in­di­vid­ual in a cer­tain coun­try to an­other coun­try. This can be done through es­tab­lish­ing busi­ness op­er­a­tions or ac­quir­ing busi­ness as­sets in other coun­tries. It en­tails own­er­ship of the whole or con­trol­ling shares in a for­eign com­pany.

The Pres­i­dent Cde Em­mer­son Dam­budzo Mnan­gagwa dur­ing his in­au­gu­ra­tion clearly stated that the coun­try was ready to part­ner with other coun­tries to­wards im­prov­ing its do­mes­tic eco­nomic growth.

This gave the coun­try a new po­lit­i­cal dis­pen­sa­tion. Coun­tries that have now shown keen in­ter­est to work with Harare are China, Botswana, Aus­tralia and Bri­tain among oth­ers.

Some years back, China gave Harare City Coun­cil a whop­ping $144 mil­lion loan to im­prove on wa­ter de­liv­ery. These are some of the in­vest­ments the coun­try needs to turn around its econ­omy. Last year the coun­try con­cluded a US$1 bil­lion deal to du­alise the Harare to Beit­bridge high­way, a project that is ex­pected to em­ploy thou­sands of peo­ple.

In­creased ex­port earn­ings should see the na­tion in­creas­ing its dis­pos­able for­eign cur­rency. The econ­omy has been cur­rently crip­pled by a short­age of for­eign cur­rency to im­port valu­able re­sources. En­sur­ing that man­u­fac­tur­ing com­pa­nies fo­cus on ex­port­ing their pro­duce will greatly en­able the coun­try to gain more for­eign cur­rency.

To­bacco re­mains the coun­try’s largest earner of for­eign cur­rency. It can­not sus­tain the coun­try for the whole year alone. To solve this prob­lem, Gov­ern­ment is pro­mot­ing the de­vel­op­ment of spe­cial eco­nomic zones which shall be re­spon­si­ble for fo­cussing on man­u­fac­tur­ing goods for the ex­port mar­ket. A 10 per­cent ex­port in­cen­tive has been put in place to re­duce pro­duc­tion costs for ex­porters.

Re­cently, the Re­serve Bank of Zim­babwe Gov­er­nor, Dr John Man­gudya, said Zim­babwe needed to in­crease pro­duc­tion in quick win sec­tors that in­clude agri­cul­ture, tourism and hor­ti­cul­ture in or­der to in­crease the gen­er­a­tion of for­eign cur­rency. Zim­babwe’s prob­lems have ev­ery­thing to do with limited pro­duc­tion. Ex­ports are the sal­va­tion for this econ­omy, we need to pro­duce first.

To­wards sta­bil­is­ing the econ­omy, re­tail­ers and pro­duc­ers must main­tain a sys­tem of sta­ble prices of goods and ser­vices. To achieve this, Gov­ern­ment has been un­der­tak­ing dis­cus­sions and work­ing to­gether with var­i­ous Gov­ern­ment Agen­cies in­clud­ing the Con­sumer Coun­cil of Zim­babwe (CZI).

It has con­tin­ued with the sur­veys on prices and avail­abil­ity of es­sen­tial prod­ucts, to make sure that all play­ers are com­ply­ing with what was agreed, that prices should be ad­justed down­wards, while en­gage­ments to agree on the pric­ing mod­els ap­pli­ca­ble along the var­i­ous value chains con­tinue.

Gov­ern­ment has early this month made ef­forts to eval­u­ate paras­tatals, Min­istries in Gov­ern­ment and Sta­te­Owned En­ter­prises (SOEs) some of which were op­er­at­ing prof­itably while oth­ers were fac­ing chal­lenges. The eval­u­a­tion of paras­tatals by Gov­ern­ment was meant to iden­tify non per­form­ing paras­tatals that can be re­vamped through part­ner­ships from com­pa­nies in the pri­vate sec­tor.

Strate­gies have been put in place by Gov­ern­ment to ful­fil the ini­tia­tive of the 100 days set tar­get by Pres­i­dent Mnan­gagwa. Re­spec­tive min­istries which have been manag­ing paras­tatals are ex­pected to state how paras­tatals have been fail­ing to make profit and the way for­ward on what is ex­pected to be done to close the gap from fail­ure to suc­cess.

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