Saturday, 20 February 2021

MANGUDYA : BUMPER HARVEST TO PUSH DOWN PRICES


HIGH agriculture yields expected this year are likely to push food prices down and reduce inflation to less than 10 percent and drive economic progress, as the Reserve Bank of Zimbabwe (RBZ) anticipates record economic growth by year end.

Agriculture is set to overtake the mining sector as the lead industry in boosting the country’s trade and industrial performance, buoyed by the bountiful rainy season. The RBZ’s forecast for the year puts farming at the forefront of guiding the economy to a healthy trajectory as the Government steps up efforts to achieve its target of reaching single digit inflation.

RBZ governor Dr John Mangudya said this year’s favourable agricultural season will be the backdrop of price and financial systems stability. Dr Mangudya presented this year’s first Monetary Policy Statement (MPS), last Thursday where he said this year’s agriculture harvest was going to be the backbone of economic recovery.

“The bank remains optimistic that the expected economic growth of 7,4 percent in 2021 is achievable. The bank also projects annual inflation to close the year at below 10 percent. The measured optimism is based on the expected significant growth of the agricultural output in 2021, as a result of the good rainy season, fiscal sustainability and the bank’s focus on price and financial system stability.”

In his address, Dr Mangudya said the MPS’ main focus was to curtail inflation and control the foreign exchange auction system so as to support economic growth. The Central bank chief said agriculture was going to subdue the country’s inflationary pressures.

“Coupled with increased food production due to a favourable agriculture season, inflationary pressures are expected to remain subdued in the short to medium term. As a result, the economy is expected to continue experiencing a gradual disinflation from the 362,6 percent annual inflation in December 2020 to below 10 percent by December 2021.”

The aura of optimism in the RBZ is also felt by farmers who are expecting a bumper harvest, after years of wallowing under successive seasons of drought. In an interview, Lands, Agriculture, Fisheries, Water and Rural Resettlement Minister Dr Anxious Masuka said it was highly expected that monetary authorities would foresee economic growth anchored by agriculture.

“Looking at the figures, it is pleasing to take note of how the improved rains this season have heightened hopes for a better performing economy,” said Minister Masuka.

In this summer cropping season, the Government set an ambitious yet attainable target to plough 1,5 million hectares of maize. Minister Masuka said maize production was to exceed the one million tonnes mark from last season’s 900 000 tonnes.

Farmers said they would support the Government’s move to leverage agriculture as an economic growth base. Zimbabwe Commercial Farmers Union vice president Mr Winston Babbage lauded RBZ’s projects but called for the Government to support farmers in providing conduits for agro-harvest.

“Indeed the good rains we are having will result in an improvement in trade of agriculture produce. If the economy improves, so does life for the farmer and the generality of industry. We would want that optimism to follow through as well when the time of harvest comes. Farmers face a lot of bottlenecks in finding markets and good prices for their produce,” he said.

Besides the reliance on maize, other agriculture products such as cotton, citrus and beef were counted as critical in meeting the 7,4 percent economic growth prospect. According to ZimTrade, exports from the agriculture sector are expected to post 2,7 percent growth this year. Sunday Mail

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