The Sunday Mail
Enacy Mapakame
THE decline in value of the South Africa rand continues to tighten the noose on local producers and exporters who are caught up in a vicious global economic cycle linked to slower growth in China.
South Africa and China are Zimbabwe’s major trading partners.
Worries of reduced Chinese output, coupled with growing fears over South Africa’s economic health, are conspiring to drive the rand’s value downwards.
The currency has crashed by more than 20 percent since January 2015 to an all-time low of R14,3 to the US$.
Though Zimbabwe is using a multi-currency system, most transactions are US$-denominated.
“South Africa is not our major trade partner, they are now our major adversary with what is happening to the rand,” opined former Confederation of Zimbabwe Industries president Dr Joseph Kanyekanye at a conference on inclusive growth, investment and poverty reduction in Harare last Wednesday.
“A lot of people have said Zimbabwe can actually be described as a beggar on a golden throne. There are minerals, there is everything. In as much as we have all that, we are hamstrung by funding.”
Commodity-reliant economies such as Zimbabwe and South Africa have been hard-hit by the slowdown in China, the world’s biggest consumer of commodities.
In the five-year period to 2013, trade between China and Zimbabwe grew to US$1,2 billion. South Africa is the country’s biggest trading partner.
The impact of exports on the local economy is now telling.
Zimbabwe National Statistics Agency data shows that the country’s exports to South Africa tumbled 37,3 percent to US$86,3 million in August from US$138 million a month earlier.
However, imports rose 5,4 percent to US$200 million in that period.
Overall, exports to South Africa fell 21,5 percent to US$1,2 billion in the first nine months of 2015 from a year ago.
Dr Kanyekanye said the rand’s decline had compounded Zimbabwe’s competitiveness and ease of doing business challenges.
The country is implementing reforms to simplify processes involved in registering companies, acquiring licences and starting businesses.
At the same conference, Macro-Economic Planning and Investment Promotion Minister Dr Obert Mpofu said Government was committed to economic competitiveness.
“There is still room for improvement,” said Dr Mpofu, who organised the meeting which brought together local and international economists, industrialists, academics and senior Government officials to deliberate on enhancing Zimbabwe’s economic competitiveness and reducing poverty.
African Development Bank chief regional economist Ms Mary Manneko Monyau noted that international financial institutions were committed to helping Zimbabwe unlock its potential and achieve inclusive growth.
“Africa is tired of being in the dark,” she said, adding that millions, particularly in rural areas, did not have access to electricity.
She said the continent should create linkages with emerging economies such as India, Brazil and China; while prioritising agriculture as an economic backbone.
The two-day investment conference was themed “Attaining Inclusive Growth and Poverty Reduction through Enhanced Investment in line with Zim-Asset”.
The conference was expected to come up with recommendations to buttress Zim-Asset.
