Better economic prospects in new decade for Zimbabwe

Industrialist Mr Kumbirai Katsande

THE Zimbabwean economy has emerged from a difficult decade but prospects for the new decade look bright as long as the key economic players focus on the right fundamentals.

Key stakeholders in business maintained that productivity growth and job creation were the major facets to grow the economy in 2020 going forward.

In the past decade, local industry suffered declines in production owing to a myriad of challenges among them low capacity utilisation, foreign currency shortages, erratic power supplies while inflationary pressures began to set in towards the end of the decade.

Economists who spoke to the State media concurred the country needs to put more effort on production in all facets of the economy while also paying attention to the emerging threats such as natural disasters that have a knock-on effect on agriculture.

“Our actions need to be aligned to the social economic pressures around us,” said industrialist Mr Kumbirai Katsande in an interview.

“We need to work on high value job creation opportunities, not just ordinary jobs. There is also another threat emerging in our economies that we should respond to quickly, that is climate change and the negative effects it has on our economy. Both Government and private sector need to come together to tackle this big challenge,” he said.

Mr Katsande highlighted the need to increase food production, beyond maize, but incorporating other food crops such as wheat, beans as well as livestock to enhance peole’s livelihoods.

Zimbabwe and parts of the SADC region have experienced various natural disasters such the El Nino- induced drought as well as the fall armyworm outbreak. Incidences of drought have seen a sharp decline in agricultural production, which has resulted in a significant fall in economic performance, with large parts of the population being food insecure and requiring food aid during drought years.

Such natural disasters have demonstrated the importance and urgency of building resilience against climate variability and climate change.

Market watchers, however, contend Government support for both food and non-food crops as well as livestock production will remain the anchor for increasing production for agriculture, a sector that drives the Zimbabwe economy through employment, food security and 70 percent of raw materials for the manufacturing sector.

“Based on the downfalls presented, we anticipate that the reduction in production will require increased Government support to sustain the sector,” said brokerage firm IH Securities in their 2019 Zimbabwe Agriculture Report.

National Business Council of Zimbabwe (NBCZ) president Mr Langton Mabhanga said Zimbabwe needed to take advantage of the key economic sectors, that is agriculture and mining.

He pointed out that while the country has experienced droughts in the past, the Command Agriculture initiative was a noble programme designed to enhance productivity as well as ensure food security.

“Agriculture is the backbone of our economy and there is no substitute to this, which is why we should get it right if the economy is to grow. We need to pay attention to productivity,” he said by telephone.

Mr Mabhanga also touched on the mining sector as a major investment hub for the country with potential to attract more foreign direct investment (FDI) with clear policy pronouncements.

For instance, policies that promote inclusive growth across value chains. This, Mr Mabhanga said, will also enhance job creation at a time there was high unemployment in the country.

“We need to tackle unemployment as a country by making sure we have agriculture and mining models that enhance inclusive growth. Let us be clear on what should be allowed for foreign investors in mining and what should be left for local entrepreneurs.

“As a country, we need to ensure production efficiencies, for instance, the use of green energy given the electricity challenges we are facing. Let us also adopt a work ethic necessary for our type of economy, we cannot adopt measures used in developed nations when we know we still have a long way to go,” said Mr Mabhanga.

Infrastructure development has also been cited as a key enabler to economic growth in 2020 and beyond and therefore one requiring immediate attention.

Deficits in infrastructure have been an impediment to growth. But the 2020 Zimbabwe Infrastructure Investment Programme is looking at boosting the country’s transport, energy, housing and agriculture infrastructure as part of efforts to increase production efficiency and boost economic growth.

A poor transport network, for instance, is one of the major challenges identified by industry captains as impeding business, hampering the smooth flow of inputs into the country, movement of goods across value chains as well as exports to other countries.

Transport costs have therefore been one of the key operational costs for local businesses, creating scope for Government to expedite infrastructure development as one way of enhancing the ease of doing business.

These have prompted Government to step up efforts towards improving transport infrastructure, while also looking at the country’s ports of entry to enhance the smooth flow of goods into and out of Zimbabwe.