Price stability to anchor Budget, currency

CONTINUED price and currency stability are central to the 2021 national budget set to be presented on Thursday since with stability companies can plan and people can save, Finance and Economic Development Minister Professor Mthuli Ncube told a pre-budget seminar.

“The overarching goal for this Budget is to support macroeconomic stability in terms of prices and currency stability and stability in the general environment. Because with stability we can do so much: companies can plan, people can save, citizens can postpone consumption and they can invest because they will know that the value of their currency is being preserved.

“In terms of specific measures, we will continue to support the Foreign Currency Auction System that we have put in place.”

Several Government Ministers who made presentations during the seminar held last week said Zimbabwe’s economy is poised for growth because of policies being implemented by the Second Republic.

The 2021 Budget presentation comes at a time when the economy is expected to grow by an average 5 percent a year, around 28 percent in total, over the five-year tenure of the newly-announced economic policy — the National Development Strategy (NDS1 2021-2025) — in line with President Mnangagwa’s Vision of transforming the economy to an upper middle income status by 2030.

In her address at the seminar, Industry and Commerce Minister Dr Sekai Nzenza said the state of the economy was not gloomy as stated in some sectors.

“There is a misperception out there. The misperception out there is that industry is gloomy. But that is not the correct perception when we look at industry in terms of the National Development Strategy 1,” she said.

“Already we have seen, since the introduction of the forex auction system, recoveries. We are already witnessing its impact. There are companies that are already celebrating the auction system and one is Lafarge and the price of cement is beginning to stabilise. Other companies that are doing well are Delta Beverages, Schweppes and Varun Beverages and yesterday I was at Nestle. Nestle’s capacity utilisation has moved to 85 percent and what this shows is that there is confidence in investing in Zimbabwe.”

While Covid-19 had disrupted operations of some companies there are some that actually registered growth.

“All in all we had about 400 plus companies that continued to operate (during the Covid-19 lockdown), especially in the pharmaceutical industry with some increasing their production.

“Other companies that continued to operate were fertiliser companies and other companies right now who are doing well include those companies which are producing cooking oil, the milling companies and those involved in detergents,” she said.

She said the tobacco industry has doubled production during the lockdown while the leather industry would soon receive US$15 million from Common Market of East and Southern Africa following the adoption of a new leather industry strategy by Cabinet.

Lands, Agriculture, Water and Rural Resettlement Deputy Minister Vangelis Haritatos said Government was working on increasing hectarage of land under irrigation with several dams under construction or having been completed countrywide.

The dams include Marowanyati in Buhera that was recently commissioned by President Mnangagwa and Causeway between Mashonaland East and Manicaland, Mutange in Gokwe, Gwayi-Shangani in Matabeleland North, Chivhu Dam in Mashonaland East and the Tuli-Manyange Dam in Gwanda among others.

As a sign of growth, Mines and Mining Development Minister Winston Chitando said his ministry had this year alone handled 17 000 applications for mining claims.

“At the moment we do have 17 000 applications for mining titles which shows a massive interest in mining. Traditionally we handle between 2 500 to 3 000 applications per year and with increased funding we hope to process them,” Minister Chitando said.

He said the ministry would also repossess 210 mining claims that were lying idle under the “use it or lose it policy”.

Foreign Affairs and International Trade Minister, Dr Sibusiso Moyo said Government would continue with the engagement and re-engagement drive and marketing the country as a safe destination for investment and tourists.

Government has instituted various fiscal and monetary policy measures that have seen stability in prices and foreign exchange markets while several infrastructure projects that include dam and road construction have been embarked upon.

The pre-budget seminar was attended by MPs, Cabinet ministers and experts drawn from the private sector. – Herald