Source: Agric key to Zimbabwe recovery – The Zimbabwe Independent April 20, 2018
AGRICULTURE plays a strategic role in Zimbabwe’s economic development. It was the economy’s mainstay until former president Robert Mugabe ruined the sector through a chaotic land reform programme that impoverished the nation.
Zimind Comment
The economic history of many developed countries shows that agriculture played a critical role in fostering their economic advancement. Zimbabwe can do the same. The sector in Zimbabwe is made up of three main components — the large-scale commercial and agribusiness sector, the small-scale commercial farming and communal farming. Despite the ravages of the land reform exercise, the sector remains strong, contributing about 15% to Zimbabwe’s Gross Domestic Product (GDP).
Zimbabwe has vast tracts of rich farmland. However, the majority of it is currently under-utilised or lies derelict after land was largely given to influential Zanu PF leaders and their supporters as well as government officials by Mugabe. Some of the beneficiaries have little capacity and in some cases appetite for farming.
Agriculture has deep and wide inter-linkages in the economy. Hence, downstream industries have either collapsed or streamlined due to problems in the sector. The manufacturing sector, for instance, has been under-performing for almost two decades due to reduced through-put, utility challenges, antiquated machinery, liquidity crunch and cash shortages to import raw materials as well as to retool companies. So recovery of agriculture would be critical for through-put, materials into the production process, into the manufacturing sector. Government needs to come up with an agricultural recovery plan — not this command agriculture programme — as part of a new economic blueprint to guide the country in the next five years.
For agriculture to play a positive role in the economy, there is an urgent need to fix a number of issues, mainly security of tenure and utilities. Although, government has made significant investment into power in projects like the Kariba South Extension which will add another 300MW to the station’s capacity increasing its total generation capacity to about 1 050MW and will soon focus on Hwange units 7 and 8 in a US$1,1 billion project funded by the Chinese, there is still need for more innovative ways to ensure adequate and reliable power supply.
When the economy recovers there will be a spike in power demand.
If agriculture recovers, it will not only boost food security and GDP, but also help reduce the unsustainable import bill. That will in turn address the balance-of-payments position and the current account deficit currently around US$600 million. Besides, it will also improve foreign currency earnings, easing the liquidity crisis.
Over and above, agriculture remains the biggest employer in the country, directly employing 30% of Zimbabweans and indirectly providing the livelihood of 80% of the people. Thus the recovery of the sector will have a positive impact on disposable incomes, consumer spending and aggregate demand to fuel production and economic growth. Given that the sector is vulnerable to changing weather patterns, government should mitigate the negative impact of droughts through investment in irrigation. Progressive authorities have prioritised irrigation system development. Security of tenure must also be sorted out for agriculture and the economy.
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