World warming up to Zim —ED
PRESIDENT Mnangagwa yesterday said Government is encouraged by the positive responses from the re-engagement process, which seeks to reintegrate the country into the family of nations.
The President said this while officially opening the 7th edition of the Zimtrade Exporters’ Conference in Harare which ran under the theme: “Accelerating export growth for sustainable economic development.”
The President implored local companies to take advantage of the improving relations between Zimbabwe and top global powers, due to the re-engagement process, to boost their production capacity and consequently exports.
“As our engagement and re-engagement efforts begin to yield visible benefits, I challenge industry to anticipate the expanded export market and develop business strategies with this in mind,” said President Mnangagwa.
“. . . my Government will continue the ongoing efforts to re-engage with the international financial institutions to support the recapitalisation and retooling of industry, as well as trade finance to boost capacity utilisation and production for export.
“We are, to date, encouraged by the positive response we are receiving as a result of our re-engagement efforts.”
The re-engagement of nations that had literally slammed the door on Zimbabwe, particularly after the Land Reform Programme, started in November last year when the new administration led by President Mnangagwa came into being.
Already, plans to rejoin the Commonwealth are at an advanced stage while multilateral financial institutions such as the World Bank and International Monetary Fund (IMF) are thawing their previous hostility towards Zimbabwe.
The IMF has indicated willingness to assist the country to cobble a debt clearance strategy.
Government will engage most of its creditors at this year’s annual IMF and World Bank Group meetings scheduled for Bali, Indonesia, from October 12 to 14.
Zimbabwe’s external debt stands at $7,4 billion. But as Zimbabwe seeks to find common ground with the IMF and the World Bank to enable them to release funds, private financiers such as Gemcorp Group and CDC, both from the United Kingdom, have already extended a combined $350 million to Zimbabwe. CDC had last
extended funds to Zimbabwe in 1994 and CEO Mr Nick O’Donohoe said they were preparing the $100 million loan facility since the day former president Robert Mugabe departed.
Gemcorp’s $250 million facility is for the importation of essential goods such as fuel and medicine.
President Mnangagwa believes once industries get finance for retooling, they would be able to ramp up production and exports.
He said exports were critical as they help in foreign currency generation.
“The most important source of foreign currency to drive the economy is through exports, especially value added goods and services.
“I wish to commend companies from all sectors of our economy . . . that have continued to export and contribute to the country’s export earnings. I note that minerals, tobacco, horticulture and selected manufactured products and ser- vices dominate the country’s export basket,” said President Mnangagwa.
However, he said the current scenario where about 80 percent of local exports are coming from primary commodities was “undesirable” in the medium to long-term future.
He said “greater strides” must be made to ensure the expansion of the production and range of exported manufactured and processed goods across all sectors of the economy.
President Mnangagwa said manufactured and processed agricultural commodities and services must be grown “exponentially if we are to sustain the economic growth trajectory and reduce our trade deficit.
“I am confident that the current total export figures can be surpassed given the vast resource endowments of our country.
“It is incumbent upon captains of industry and commerce across all sectors to be export-oriented and to leverage on our country’s geo-strategic advantage to access a broader market share within the region, continent and beyond,” he said.
The President said to accelerate the country’s quest to enter the global value chains, local firms must utilise the existing bilateral agreements and the preferential and customs trade agreements that have been entered into for duty-free and quota-free market access with trading partners in Comesa, SADC and countries in the European Union under the Interim Economic Partnership Agreement.
The coming in of the African Continental Free Trade Area (ACFTA), which was signed in March this year, ushers in opportunities for local entrepreneurs and companies to export into the continent as part of promoting intra-African trade.
President Mnangagwa said mining and agriculture are among Government’s priority sectors earmarked to stimulate economic growth.
The President also said local com- panies should establish joint venture partnerships with potential investors that are keen to do business with Zimbabwe.