Resuscitating industry and industry development
Continued from last week
THE economy is expected to surpass the initial growth projection of 4,5 percent in 2018 on account of more than anticipated performance across key sectors namely agriculture, mining, manufacturing, as well as services. As a result, the overall economic growth in 2018 is now projected at 6,3 percent.
Over the duration of the Programme, the economy is projected to grow by 9 percent in 2019, and 9,7 percent in 2020. This growth will be underpinned by renewed business confidence and investment opportunities as the New Dispensation opens up Zimbabwe for Business across all sectors of the economy. Smart Agriculture
With respect to agriculture, the Programme presents quickwin investment opportunities for realisation of self-sufficiency and food surpluses that will see the re-emergence of Zimbabwe as a major contributor to agricultural production and regional food security in the southern Africa region and beyond.
The Transitional Stabilisation Programme envisages greater involvement of the domestic financial system in underpinning the financing of agriculture. With regards to livestock, the Programme contains measures supportive of full recovery, in terms of the size and quality of the national herd, with accompanying benefits for improved supply along the livestock value chain, and ultimately meeting national requirements, as well as those of the export markets.
The Transitional Stabilisation Programme targets further strengthening of control and monitoring systems over the Special Agriculture Production Initiative inputs supply and distribution chain.
Heavy reliance on Government support for the Special Agriculture Production Initiative will be gradually reduced as initiatives to enhance private sector support gather momentum, that way overcoming potential development of voids in capacitating production by the farmer.
In order to facilitate private sector investment in agriculture, Government will expedite issuance of bankable 99 Year Leases to allow farmers access funding from financial institutions.
The New Dispensation has taken the decision to finalise compensation to all former farmers affected by the Land Reform Programme, in accordance with the country’s Constitution and Zimbabwe’s obligations under bilateral agreements. Work towards this is being expedited through a Working Group comprising Government officials and representatives of former farm owners.
The Transitional Stabilisation Programme also envisages Government improving farmer access to markets for livestock and other agricultural produce as a quick-win intervention over the remainder of 2018 into 2019 and 2020. In this regard, Government will put in place modalities to operationalise the Agriculture Commodity Exchange to close the marketing gap that currently exists.
Mining Exploration and Development
In mining, the Transitional Stabilisation Programme targets: Re-opening of closed mines. Expansion of mines that are operating below capacity. Opening of new mines. Promoting beneficiation and value addition, through domestic smelting and refining, to increase earnings from mineral resources. The impact of mining goes beyond mineral exploration, exploitation, processing and value addition. Mining is linked to many other value chain industries, and is targeted to contribute over 70 percent of the country’s export earnings in 2018.
The first half performance in minerals such as gold, coal and chrome, among others, also point to better prospects for 2018, than the previous year’s forecast.
Mining proceeds present themselves as a necessary shot in the arm to the rest of the economy, with much more potential as mining revenues are ploughed back into the economy to create circular, self-reinforcing inclusive growth.
Resuscitating Industry and Industry Development
The Transitional Stabilisation Programme will prioritise increased investment in the manufacturing sector, with emphasis on value addition and beneficiation of agriculture produce and minerals, to increase job creation and export earnings.
It is against this background that Government will facilitate roll out of outreach initiatives partnering domestic and foreign investors, building on the initial measures contained in the 2018 Budget and other Government policy pronouncements to improve the investment and business climate.
To enhance and embrace the informal market, the Transitional Stabilisation Programme will partner business Chambers and Confederations in facilitating development of mechanisms for strengthening linkages with formal business. The Transitional Stabilisation Programme will also focus on supporting sustainable micro, small and medium enterprises growth and development through business linkages, market access, cluster development, business incubation and support services.
Protecting the Environment
With respect to environmental management, the Transitional Stabilisation Programme targets protection, restoration and promotion of sustainable use of terrestrial ecosystems, sustainable management of forests, fighting the veld fire scourge, combating desertification, halting and reversing land degradation and loss of biodiversity. Further, Government will integrate the necessary mitigatory measures into national policies, strategies and planning, to strengthen resilience and adaptive capacity to climate related hazards and natural disasters. This includes promoting climate resilient water management systems, focusing on both crop and livestock production. PART IV: Services sector reforms
This Section focuses on measures aimed at addressing the following: Tourism, digital economy, banking and Financial Sector Services, insurance and Pension Savings.
The Transitional Stabilisation Programme also targets support for aggressive marketing and rebranding of Zimbabwe, to facilitate tourism arrivals, taking advantage of the country’s diverse tourist attractions, ranging from natural, to man-made historical sites. This will hinge on provision of innovative incentive packages, and the relaxation of all restrictive visa requirements, among other measures.
The Transitional Stabilisation Programme will also review tourism operators’ licensing requirements with a view to improve entry into the industry and competitiveness of tourism products. This will include the streamlining of the registration, Licensing and Permit requirements, as well as the numerous charges and fees. Furthermore, the Programme will also target sustainable financing of the tourism industry through the establishment of a Tourism Revolving Fund that will provide capital resources for tourism development.
Growth of Service Sectors also outlines opportunities for the digital economy arising out of adoption of ICT, with also benefits from increased investment in e-Government platforms.
In this regard, harnessing the digital economy and digital entrepreneurship contributes significantly to economic growth, and has the potential of creating jobs for the youth and at low cost, benefiting from applications of digital platforms. Central will be support for innovation and collaborative research among institutions of higher learning, in partnership with technology oriented industry, taking advantage of opportunities and niche in the digital economy.
The Transitional Stabilisation Programme also targets broadening adoption and utilisation of e-Government across Ministries, Departments, local authorities and State owned enterprises in the provision of public services to cut loopholes for corruption.
Banking and Financial Sector Services
This Section also outlines the role of banking and financial sector services in savings mobilisation, including financial inclusion initiatives to embrace previously disadvantaged sectors such as SMEs. Underpinning the above, will be focus on mobilisation of deposits through promotion of a culture of savings and investment, to engender the role of the banking sector in financial intermediation, particularly in supporting productive and export sectors to at least 90 percent of total banking sector lending. The Transitional Stabilisation Programme will continue to encourage use of plastic money through digital platforms.
Insurance and Pension Savings
The Transitional Stabilisation Programme is targeting insurance penetration to reach 20 percent, with various affordable micro-insurance products via the mobile phone targeted to emerge as the leading drivers of insurance penetration. Drawing from offshore experiences, the Transitional Stabilisation Programme also targets review of some of the stringent insurance industry licensing requirements, including for brokers and underwriters.
In order to address the perennial arrears problem, Government will, over the Transitional Stabilisation Programme, institute a number of public sector pension reforms, including rationalising and harmonising pension contribution rates for parastatals and local authorities.
Government has mandated the Insurance and Pensions Commission to unpack the findings and recommendations of the Commission of Inquiry into the Conversion of Insurance and Pension Values from Zimbabwe dollars to United States dollars, and come up with an implementation framework that will address complaints relating to low values, low confidence, corporate governance challenges and high expense ratios, among other things.
Investing in Public Infrastructure
The Transitional Stabilisation Programme recognises that functional public infrastructure remains a key enabler to unlocking economic growth potential, increase competitiveness and productivity, while equipping public services to meet demand. In this regard, the Programme prioritises quick-win projects in energy, water and sanitation, ICT, housing and transport, with focus on expediting completion of ongoing infrastructure projects, that way contributing to the revival of the economy. The Transitional Stabilisation Programme, therefore, targets increasing the Budget on capital expenditures from the current 16 percent of total Budget expenditures to over 25 percent, beginning from the 2019 and 2020 fiscal Budgets. Our re-engagement efforts will also target support from Development Partners, particularly for projects that improve the well-being of citizens, including encouraging of blending Grants from Development Partners with interest bearing instruments to promote infrastructure development.
To be continued next week