President Mnangagwa said focusing on currency alone will not provide solutions to economic challenges facing the country – imploring Zimbabweans to focus on strategies to boost production.
Discourse is currently centred on the country’s currency of account, the RTGS dollar, which has continued to weaken against major currencies, trading at $5,88 against the US$1 as of Wednesday this week.
Debate has been raging on whether the country should continue on the path of fully introducing its own currency or re-dollarise as pressed by the market.
The President’s remarks come as most economic agents are no longer accepting the local currency or alternatively indexing prices to the stronger and stable US dollar. The alignment of prices to the exchange rate is also being done at a huge premium to the official interbank rate.
However, speaking on Wednesday, ahead of an inaugural radio interview on Capitalk FM to be broadcast live from 7pm on Friday evening, President Mnangagwa said what makes an economy is not currency, but production.
“The economy is not money, the economy is production. Money is just a legal instrument for transactions between citizens as we exchange goods and services, that’s all,” said President Mnangagwa.
He said instead of focusing on money, Government’s thrust had now shifted to value addition and beneficiation of the country’s mineral resources.
Said the President; “So what is critical is not the money, what is critical is production.”
His statement dovetails with his activities and focus in the last few days where he has been engaging players in the production value chains.
Last week the President toured a company which is into processing of granite, Southern Granites (PVT) Ltd in Chitungwiza and said “the operations of the company were in sync with Government policy.”
“This is in line with the pursuit of the Second Republic to accelerate the modernisation, industrialisation and inclusive economic growth,” he said.
President Mnangagwa described the tour as an “eye-opener,” that will help define how the granite rocks will be exported going into the future.
“Now that we have the technology I have instructed the Minister of Industry and Commerce (Mangaliso Ndlovu) to craft a Statutory Instrument to ban the exportation of raw blocks. We need to value add,” said President Mnangagwa during the tour.
There are many products that are exported after in semi-processed form such as tobacco, while high value minerals such platinum and chrome are exported largely in their raw state, in the process prejudicing the country of potential earnings worth hundreds of millions of dollars.
In the brief ahead of the radio interview, President Mnangagwa said there was a need for people to look at the vast resource endowments in the country.
He cited agriculture as a focus area that needed players’ attention.
“We have the land, good soils so our agriculture is critical. Almost many things come out of agriculture, let us look at cereals crops, there is agro processing.”
He said shifting to value addition is the reason why he had to visit Southern Granites and the same focus should be on tobacco and cotton – to get maximum value from the crops.
President Mnangagwa said there was need to bring technology and skills into all these key areas. He, however, said while agriculture was the bedrock for the development of the country’s economy, value addition can also be done in mining and tourism sectors.
President Mnangagwa’s thrust also speaks to what Cabinet is now focusing on, having this week approved the Local Content Strategy as well as the Zimbabwe National Industrial Development Policy.
The Industrial Policy is guided by the principles of value addition and beneficiation; export-led industrialisation; promotion of sustainable industrial development; gender mainstreaming and modernisation as well as upgrading of industrial equipment and machinery.
The policy aims to attain the following: a manufacturing sector annual growth rate of at least 2 percent per annum; a 30 percent contribution to the national gross domestic savings; a manufacturing value added growth of 16 percent per year; a merchandise export growth rate of 10 percent per year; and increased employment in the manufacturing sector to 20 percent by 2023.
In Local Content Strategy document, the Ministry of Industry and Commerce indicated that the strategy was targeted at boosting value addition through utilisation of domestic resources and localisation of supply chains.
It is believed that the increased consumption of locally manufactured products has the potential to drive the country’s industrialisation agenda and at the same time help whittle the country’s trade deficit.