Govt forges ahead with growth thrust

04 Dec, 2022 - 00:12 0 Views
Govt forges ahead with growth thrust Minister Ncube

The Sunday Mail

Senior Business Reporter

The GOVERNMENT is forging ahead with its economic growth thrust, as espoused in the National Development Strategy 1 (NDS1), by developing and strengthening value chains in mining, agriculture and manufacturing.

Under President Mnangagwa’s leadership, the Second Republic is targeting an upper middle-income economy by 2030.

NDS1, which is a five-year economic development programme, was launched last year and runs up to 2025.

In the 2023 Budget, Finance and Economic Development Minister Professor Mthuli Ncube indicated that the structural transformation of the commodity-driven economy to a diversified resilient economy would be achieved through the promotion of value addition of primary commodities, diversification of the local product range and exports, as well as adoption of innovative technologies.

“In line with NDS1, the thrust of the 2023 National Budget is to develop and strengthen existing value chains, promoting the linkage of SMEs (small and medium enterprises) with large corporates and identification of quick-win value chains in agriculture, manufacturing and mining,” he said.

Prof Ncube said the anticipated favourable rainfall patterns, restoration of inflation and exchange rate stability, coupled with the availability of key enablers, are expected to support growth of the agriculture and manufacturing sectors going forward.

The ongoing transformation of the agricultural sector, anchored in innovative technologies and good agronomic practices, he added, is meant to rebuild capacity to meet national requirements, support economic growth and increase household incomes.

“The various programmes and projects being undertaken by the Government seek to promote production and productivity, build resilience to climatic shocks, transform agricultural activities into viable business enterprises, as well as reduce the import bill.

“The projected positive agriculture growth for 2023 is based on the normal to above-normal rainfall forecast, climate-proofing measures under the National Accelerated Irrigation Rehabilitation Programme, as well as the restructuring and transformation of agriculture systems to improve the viability and productivity of the sector,” said Prof  Ncube.

Transformation of the manufacturing sector will be sustained through the Value Chain Revolving Fund; Zambia-Zimbabwe Agro-Industrial Park; domestic production of fertilisers; as well as several new investments in the sector, including the integrated iron and steel plant being built by Dinson Iron and Steel Company (Disco) in Manhize near Mvuma.

“However, growth of the manufacturing sector is expected to slow down to 2,6 percent in 2022, before gaining momentum to 4 percent in 2025.

“This growth will be anchored in expected better performance of the primary sectors of agriculture and mining, as well as a conducive macroeconomic environment.

“The sector is also expected to continue benefitting from the Special Drawing Rights revolving fund of US$30 million, which has been availed through the participation of commercial banks to support retooling and capitalisation of the industry.”

Since 2019, capacity utilisation in the manufacturing sector has steadily risen to current levels of above 66 percent, while domestic products now occupy 80 percent of shelves in supermarkets.

“The 2023 National Budget, therefore, seeks to accelerate the structural transformation of the sector with a view to expanding value-addition capacity and diversifying the product range.

“Successful industrialisation of the economy and the drive towards economic structural transformation require policy pathways that integrate the country’s unique underlying comparative advantage, including the large informal sector and linkages between academic skills development and industry skills requirements.”

He added that the attainment of Vision 2030 and the thrust of “leaving no one and no place behind” hinges on a diversified and competitive industrial sector that has the capacity to provide decent jobs and incomes as the anchor of economic transformation.

As part of the thrust to strengthen domestic value chains and economic transformation, the Government is capacitating the Industrial Development Corporation of Zimbabwe to support its subsidiaries to value-add raw minerals and come up with compound fertilisers and other products presently being imported.

It is also believed that there is scope for optimising benefits through investments in exploration, extraction and value addition, especially through the local production of lithium-ion batteries for electric cars that underpin the transition to green energy.

The mining sector is expected to grow by 10 percent this year from the mid-year projection of 9,5 percent.

This is largely driven by expected increased output in gold, platinum group metals, chrome, nickel, diamond and coal, as well as record high international commodity prices and increased investments in the sector.

Next year, the sector is forecast to grow by 10,4 percent.

Economist Ms Chipo Warikandwa said promoting growth in mining, agriculture and manufacturing would create jobs, stimulate production and grow exports, which are fundamentals of economic growth.

“The NDS 1 is premised on growing the economy and improving the living standards of citizens, which leads to the attainment of an upper middle-income society.

“So, if the value chains in the major economic mainstays are strengthened, it is possible that the economic growth targets under NDS 1 will be achieved, riding on the Government’s aggressive approach to rebuilding the economy,” she said.

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