‘Economic prospects bright’

Source: ‘Economic prospects bright’ | The Herald

President Mnangagwa

Political Editor

DESPITE challenges caused by the Covid-19 pandemic as well as the continued economic sanctions on the country, Zimbabwe’s economy is poised for growth anchored by recoveries in the agriculture and mining sectors, economists have said.

This comes after President Mnangagwa told the nation in his Independence Day address that the country is on course to meet its Vision 2030 to become an upper-middle-class economy, putting economic growth this year at a plus 7 percent.

Riding on a successful rainy season that will ensure a bumper harvest, Zimbabwe is also expecting an 11 percent growth in the mining sector.

And for the first time in decades, the Second Republic, under President Mnangagwa, has realised budget surpluses. Inflation, which had become a major source of macroeconomic instability, has been contained and the foreign currency auction system has also enhanced transparency and accountability in the distribution and use of foreign currency.

In an interview, Zimbabwe National Chamber of Commerce (ZNCC) chief executive officer Mr Christopher Mugaga said as outlined in the President Independence speech, Zimbabwe’s economic targets are very much attainable.

“The growth is very much attainable, if you look at the main drivers, the contribution of the agriculture sector is vital, so is the service sector and also the mining sector.

“The microeconomic growth will translate into the macroeconomic growth but what is important is to see the quality of the growth so that it results in the creation of jobs,” he said.

Economic analyst Mr Eddie Cross said there is an unprecedented building boom in the country, unseen in the country’s history, and anyone who doubts the feasibility of the economic growth projections is in denial.

“For the past two years very substantial progress has been made. We have seen major changes: inflation has gone down, I think the economy has now started to respond. My view is 2021 is going to be a year of growth. There is no doubt that this team that took over in 2017 has committed itself to fundamental and substantial changes. You can see that in the way the economy has responded, not only in agriculture and mining, not only in the recovery of international commodities,” he said.

Added to that, he said there is relative price stability and also local manufacturers are packing the country’s shops, an indication that local industry is rising to the challenge.

And despite the Covid-19 pandemic and its detrimental effects on international travel and tourism, successes in the agriculture and mining sectors will offset the negatives, he added.

The respected economist dismissed suggestions by some prophets of doom that the country’s economy won’t grow because of power cuts when the reality on the ground is that power outages are now rare while the completion of Hwange Power projects will ensure that by January next year Zimbabwe will have an additional 600MW to the national grid.

“Exchange rates have been stable for the past nine months. I have lost faith in all the multilateral agencies. The IMF has not given us adequate recognition for the progress made, the World Bank analysis of economy this year is totally wrong, real businessmen now feel the same,” said Mr Cross.

On his part Confederation of Zimbabwe Retailers chairman Mr Denford Mutashu said drivers of economic growth such as power generation, a bumper harvest and growth in the mining sector have all added to the impetus to meet the above 7 percent economic growth.

“As an industry, we are happy with President Mnangagwa and Government commitment to improve the doing business environment and thrust on building a private sector-led economy.

“Increased output and industrial production have led to more locally manufactured goods taking up space of supermarket shelves. Seventy percent of the shelf space is now occupied by local goods with a remarkable improvement on the 17 key basic goods that are all manufactured locally. This has led to price stability while taming inflation which ravaged the economy in the yesteryears,” he said.