The Sunday Mail
Business Reporter
The country’s economic blueprint covering the five-year period to 2025 is prioritising growth through improving local value chains, Finance and Economic Development Minister Professor Mthuli Ncube has said.
Addressing delegates at the Confederation of Zimbabwe Industries (CZI) annual congress in Harare last week, the Treasury chief said the Government would actively promote value addition, expand the country’s manufacturing base and grow export earnings.
Zimbabwe is currently a significant exporter of raw and semi-processed minerals, which makes it difficult to get the maximum possible value from local resources.
Emphasis, however, is shifting towards adding value to local minerals before exporting in order to create decent jobs and higher incomes.
Minister Ncube reiterated that the Government believes in private sector-led growth.
“Government’s role is to provide a conducive environment by improving the business environment, by eliminating unnecessary bureaucracy and providing necessary infrastructure to make the local products competitive on the international market,” he said.
“We believe in a private sector-driven economy to the extent that the envisaged structural transformation of the economy should be led by private players.”
But captains of industry said Zimbabwe was currently confronted by the reality that producers were importing more than 70 percent of their raw materials from regional countries. The Government has since made a commitment to incentivise local production of raw materials that can be fed into the manufacturing sector.
“It is easy to say let us do value addition, but it is about the inputs, so from deliberations made in this congress, we will see how best we can incentivise and domesticate the production of raw materials in the budget,” he said.
Over US$2 billion had been disbursed since the launch of the foreign currency auction on June 23 last year, with most of the funds being channelled towards raw materials, machinery and equipment.
The Government, according to the Finance Minister, had also decided to pay this year’s bonus in foreign currency to cushion civil servants as well as slow down the inflation rate.
“We did realise that there was an uptick in inflation. As you recall, inflation was down to 51 percent in September, but it ticked up to 54 percent, so we thought it could be a great gesture to civil servants for us to pay this bonus in United States dollars just to cushion them over the next month or two. We expect inflation then to fall further as we go to January and February.”
Inflation has been on a downtrend for the better part of 2021, which changed course towards the end of September when parallel market exchange rates began galloping, pushing inflation from 51 percent to 54 percent in October.
