We can override challenges
Zimbabwe’s economy has faced significant challenges over the past few years, ranging from hyperinflation and currency instability to climate change-related phenomena and the Covid-19 pandemic that threatened our growth prospects.
HOWEVER, the country possesses immense potential for growth and development regardless. Today, we will explore the key challenges that the Zimbabwean economy faces, provide relevant statistics and propose potential remedies to overcome these obstacles.
The first is hyperinflation and currency instability as it has been one of the most pressing challenges for the our economy.
In the past, the country experienced hyperinflation levels that reached astronomical figures, leading to a loss of confidence in the currency and devastating consequences for businesses and citizens.
According to the International Monetary Fund (IMF), Zimbabwe’s inflation rate reached 837,5 percent in July 2020. This severely eroded the purchasing power of the Zimbabwe dollar and hindered economic growth. To address these challenges, the Government introduced a new foreign currency regime, allowing the use of multiple currencies for transactions, including the US dollar.
This move brought some stability, but it also highlighted the need for long-term solutions.
As a remedy to this, the Reserve Bank of Zimbabwe has been implementing robust monetary policies to control inflation and stabilise the currency.
This includes maintaining fiscal discipline and implementing transparent monetary operations which we may not delve deeply into in this instalment.
Another remedy is that the country should continue attracting foreign investment as this is crucial to inject capital, technology and expertise into the economy.
The Government has already been at the forefront of creating an attractive investment climate by improving the ease of doing business, safeguarding property rights and offering incentives to foreign investors, among other measures.
The promotion of Zimbabwe as an investment destination of choice has also seen massive attraction as we managed to attract investment interests worth US$8 billion last year, according to the Zimbabwe Investment Development Agency (ZIDA), so if we are able to up the ante this year, we will be good to go.
Another challenge that Zimbabwe has grappled with over the years has been its debt that has led to the country being restricted from accessing lines of credit. This has been a huge hurdle until the Second Republic created a debt resolution platform.
Zimbabwe initiated the arrears clearance and debt resolution strategy championed by the African Development Bank president Dr Akinwumi Adesina and former Mozambican President Joachim Chissano, both of whom have pledged to see Zimbabwe through successful debt resolution.
The World Bank and the IMF have also applauded Zimbabwe for initiating the process to ensure its arrears are settled amicably.
In December last year, a delegation from both financial institutions came into the country and met with the President to express their confidence in the economic reforms being spearheaded by Zimbabwe.
Already, plans are underway for a Staff Monitored Programme (SMP) that will see the IMF seconding staff to Zimbabwe.
The SMP will help Zimbabwe establish a track record of policy implementation and thus pave the way for an IMF financial arrangement or for the resumption of a financial arrangement.
“Our joint meeting today with the President was really a courtesy call, we wanted to hear from him how he wants our institutions to provide much-needed support to Zimbabwe. On our part, we expressed our readiness to support Zimbabwe to the fullest extent that we can.
“The Government has requested a Staff Monitoring Programme through which we can provide support to the Government in terms of policy advice and technical assistance.
“We want to initiate that as soon as Government is ready and I am here to try and understand Government’s motivations and more importantly to signal our readiness to move forward with the Staff Monitored Programme as soon as our teams can sit together and finalise the discussions,” said the IMF.
“The President basically explained Government’s very strong commitment to advancing economic reforms and also including recognising that there are some areas that require attention.”
Countries such as the United Kingdom have also expressed their commitment to continue participating in the country’s debt talks notwithstanding the recent disengagement by the United States of America.
“As one of those countries, one of the creditors, we are really excited to be around the table with the Government of Zimbabwe and others, looking at their political and economic reform plans.
“These are the reform plans that the Zimbabwe Government agreed to covering three broad tracks — the economic, the governance and the land reforms — that they set out.
“It is fantastic that this has been led by Zimbabwe and also supported by the region,” said the UK’s Ambassador to Zimbabwe Pete Vowles in an interview with this publication.
As a solution to the rising number of graduates being churned out by colleges annually, there is need for an increased promotion of entrepreneurship ventures and small business development.
Stakeholders can support entrepreneurship by providing access to affordable financing, business training, mentorship programmes and other key strategies. This has the potential to encourage the growth of small and medium enterprises (SMEs) and create more formal job opportunities.
We note interventions to support SMEs are being implemented, so with that we should definitely see change.
Enhancing vocational and technical education is another remedy that can equip individuals with the skills needed for employment in various sectors, thereby reducing unemployment rates and improving productivity.
In this regard, Education 5.0, set to produce well-rounded and solutions-oriented graduates, is on point
The introduction of innovation hubs has been highly impactful in this regard. Many of them have produced solutions that industry and other aspects of life have been in need of.
On another note, a huge challenge that, if overcome, can transform things in a big way is the disunity that we exhibit sometimes. It frustrates well-intended policies and programmes while sapping the positive energy we need to overcome our challenges and achieve our goals as a country.
As Zimbabweans, we need to be united so we take the country forward this year and overcome various challenges that may be presented to us.
There is also greater need for us to fully grasp and embrace the “Nyika Inovakwa Nevene Vayo” philosophy as nothing supersedes that.
If we look at some of the largest economies and well-developed countries, they got to where they are by maintaining a united front. That is the one thing they all have in common, whether its China, Russia, the United Arab Emirates, Saudi Arabia or even the US, so it is imperative that as Zimbabweans we are united so that we realise maximum development throughout the year.
Let us maintain a united front, my fellow countrymen!
Zimbabwe has been grappling with energy shortages and unreliable power supply, which has been another challenge that has hampered industrial productivity and economic growth. It is great news that the situation has improved significantly. In our business section, we have business leaders commending efforts that have been made to improve power supply.
However, there is need for continued diversification of energy sources through expanding the energy mix by investing more in renewable energy sources such as solar, wind and hydroelectric power, which can all help reduce reliance on fossil fuels and enhance energy security.
Public-private partnerships between the Government and the private sector for energy infrastructure development can also help attract investment, improve efficiency and expand access to reliable electricity.
We also need to raise our production and productivity levels across all sectors of the economy because only through this can we get to where we want to get.
As Zimbabweans, we need to surmount the production levels we reached last year, be it in agriculture, mining, manufacturing and tourism and other economic drivers.
Agriculture has traditionally been the backbone of Zimbabwe’s economy, contributing significantly to employment and food security.
However, the sector faces challenges such as climate change.
Climate-smart agriculture is thus needed, and encouraging the adoption of practices such as conservation farming and irrigation systems can enhance productivity, mitigate the impact of climate change and improve food security.
As Zimbabwe, we have already initiated climate-proofed agriculture techniques through the Pfumvudza/Intwasa programme and we are working on improving our irrigation capacity and mechanising operations.
All these efforts should be ramped up this year.
Providing farmers with affordable credit facilities, access to modern agricultural technologies and training can also help increase productivity and promote sustainable agricultural practices.
With concerted efforts and a sustained commitment to growth and development, Zimbabwe can overcome these challenges and achieve long-term economic stability and prosperity. It is possible!
In God I Trust!
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