The Sunday Mail
ZIMBABWE remains on track to achieve its goal of attaining an upper middle income status for its citizenry by 2030 thanks to the Government’s single minded pursuit of a developmental trajectory anchored on a stable macro economic environment. In a remarkable turnaround for the country which has suffered from the effects of a debilitating sanctions regime since the turn of the millennium, economic analysts are now bullish and predict a growth spurt in the coming years with massive infrastructure projects being rolled out across the country pointing to a change in fortunes for Zimbabwe.
Against all odds, the Zimbabwe dollar has stabilised while 90 percent of the country’s foreign currency is now circulating in the formal market, stabilising the exchange rate and reducing inflation. Foreign currency deposits in nostro accounts now sit at about US$1,2 billion while local currency deposits are at $80 billion — a massive improvement from previous years.
Thanks to the Reserve Bank of Zimbabwe foreign exchange auction system — introduced in June last year — sanity now prevails in the money market and the parallel market for foreign currency has been tamed with most companies now accessing their forex requirements from the platform. The decision to allow fuel dealers and selected service providers with access to free funds to charge in US dollars was a masterstroke which has helped channel most of the foreign currency which was on the informal market into the formal sector. Now prices of basic goods and services on the market are stable on the back of exchange rate stability which is expected to hold steady and even strengthen in the coming months as proceeds from the tobacco auction floors kick in and the impact of a hugely successful agricultural season take effect. Inflation — for years the bane of the economy — has been tamed, with annual inflation going down to 194 percent in April this year from 837 percent in July last year. Predictions are that inflation will end the year at 15 percent while the economy will grow by 7,4 percent. With mining and agriculture — the backbone of the economy — firing on all cylinders, it is only a matter of time before Zimbabwe completely turns the corner. “Things are stable and we are very pleased with that. Companies are able to plan, citizens are able to save and the Zimbabwe dollar now retains value and that is what is important because stability is paramount,” Finance and Economic Development Minister Professor Mthuli Ncube told The Sunday Mail last week.
“I don’t recall Government finances being strong in a while. This year will be even better, we have had a very good agricultural season and the mining sector is strong”.
Indeed, the better than expected performance of the economy has allowed Government to score other important milestones such as procuring vaccines to contain the Covid-19 pandemic, making Zimbabwe one of the best African countries in terms of coronavirus mitigation and management. As at last week, Zimbabwe had administered the first dose of the Covid-19 vaccine to more than 500 000 of its people, marking a key milestone in its quest to achieve herd immunity. Elsewhere, the country is ploughing ahead with massive developmental projects which are crucial in stimulating activity in other sectors of the economy. There is dam construction on a level not seen since independence, roads – major arteries linking Zimbabwe and its neighbours, trunk roads connecting cities, rural roads and those within towns and cities — are being rehabilitated, spruced up and others completely rebuilt. The Robert Mugabe International Airport is being revamped with Victoria Falls and Joshua Mabuko Nkomo International Airports having been rehabilitated to meet international standards.
To ensure that no one is left behind and development is inclusive, Government has prioritised high impact and results-based community projects. Among these are Muchekeranwa dam in Manicaland, Gwayi-Shangani in Matabeleleland North, Kunzvi dam north of Harare, Mutange in Gokwe, Chivhu dam in Mashonaland East and Marowanyati dam in Buhera. These are meant to climate-proof against drought and thus eliminate food imports while feeding the rapid industrialisation that is taking place around the country. They are also incubators for fisheries projects sprouting across the country while also feeding irrigation schemes in communities close to them. In the health sector, Government is sprucing up facilities at its central hospitals and establishing Covid-19 specialist centres.
On Friday, President Mnangagwa opened two facilities in Bulawayo, a paediatric orthopaedic hospital and a Covid-19 isolation and treatment centre – both initiatives a culmination of Public-Private Partnerships. He also toured various industries in the country’s second capital which are experiencing unprecedented turnaround on the back of an improved macro-economic environment and policies conducive for growth promulgated by the Second Republic. The resuscitation of local industries is an important step towards the attainment of the goals of the National Development Strategy 1 — itself an important cog in Vision 2030. Local companies are accessing the bulk of their forex requirements from the RBZ auction system and channelling it towards the acquisition of machinery and raw materials. This has resulted in increased productivity which is evident in local goods which are filling up supermarket shelves, saving the nation much needed foreign currency as import substitution gains traction. Big companies such as United Refineries and the Treger Group in Bulawayo — which President Mnangagwa visited during his tour of the city — are major players in the cooking oil, soap and household goods sector. Treger for instance, through their subsidiary, Monarch, produce the bulk of the stoves used in most homes in Zimbabwe and the Sadc region. It also manufactures solar geysers, aluminium windows, wheel barrows and other households goods. It is one of the companies that have taken advantage of Government’s fiscal incentives to increase capacity utilisation, employment levels, diversity and range of products and export penetration. Private sector participation is key to overall economic revival and growth and we applaud the efforts of these companies. Their contribution to the national economy is noted in the latest data from the National Social Security Authority which shows that more than 170 000 new jobs have been created in various sectors of the economy since 2017, 7 000 of which were created in the first four months of this year alone. This is commendable and shows we are on the right track.
