THE gains being recorded in the economy are being threatened by speculators and continued indiscipline on the parallel market, Vice-President, Dr Constantino Chiwenga, said yesterday.
Despite the sustained fiscal discipline and tight monetary
conditions underpinned by the strong policy framework as well as close
coordination by fiscal and monetary authorities, pricing of basic goods and
services remains way above the purchasing power of ordinary citizens.
The Government has expressed concern over this trend at a
time when the Reserve Bank of Zimbabwe (RBZ) has successfully operationalised
the official Foreign Currency Auction System, which has set the country firmly
on a path to price and exchange rate stability.
About US$1,72 billion has so far been disbursed towards
ensuring uninterrupted financing of the importation of key raw materials and
equipment for the productive sectors of the economy, according to the apex
bank.
This week the local dollar is trading at 1:86,9 to the
US-dollar on the official platform and yet businesses that benefit from the
auction system continue to index their prices on the speculative parallel
market rate, which has risen to between 1:130 and 1:150 or above in worst
scenarios. This has resulted in widespread outcry by consumers whose income is
being eroded.
“The drawback, which we continue to face, is indiscipline
on the parallel market, which continues to stir up negative expectations that
undermine the impressive efforts by the monetary authorities,” said Dr Chiwenga
in his keynote address at the Zimbabwe International Business Conference in
Bulawayo.
“I wish to warn the perpetrators of this heinous crime that
the long arm of the law will soon catch up with them.”
The Vice-President, however, assured the gathering, which
comprised Cabinet ministers, industry executives as well as local and foreign
exhibitors, that the Government would continue to implement measures that take
the economy forward in line with the National Development Strategy
(NDS1:2021-2025), which should deliver an upper middle-income economy by 2030.
This transformation trajectory will be achieved through
increasing support for the productive sector, which has already seen
manufacturing sector capacity rising from 36 percent in 2019 to 47 percent last
year and 54 percent in the second quarter of this year.
Industry leaders have estimated a further jump in capacity
utilisation to above 60 percent by the end of the year.
NDS1 rollout is riding smoothly on the milestones achieved
the Transitional Stabilisation Programme (TSP:2018-2019), which sought to
reverse the historic distress of high inflation, low-capacity utilisation and
productivity, as well as loss of jobs in the wage employment sector.
“We no longer view our economy as comprising a formal and
informal sector. Instead, we consider our economy as comprising economic
agents, including the micro, small and medium enterprises variously referred by
some as the informal sector,” said VP Chiwenga.
“This paradigm shift means that enterprising individuals
sustaining themselves, through engagement in business in the micro-small and
medium enterprises sector, should no longer be considered as unemployed just
because they are not in wage employment.
“Our thrust in the Second Republic is to encourage and
incentivise more people to start business and improve their personal lives,
through lawful means.”
The VP applauded efforts shown by industry leaders in
boosting productivity and urged them to improve on what has already been
achieved so far through embracing research and technology to spur innovation in
the production of goods and services, while fostering development of value
chains.
Despite the disruptive Covid-19 pandemic, Dr Chiwenga said
Zimbabwe was poised for an economic boom, estimated at 7,8 percent by the end
of the year, according to the Treasury.
The bumper harvest received in the last season is among the
key boosters while the firming of international commodity prices, particularly
from minerals such as platinum, nickel and copper, is expected to set the stage
for the attainment of a US$12 billion mining economy by 2023, said the
Vice-President.
“Because of this strong external sector performance, the
foreign currency supply has been buoyant, rising by 9,1 percent to US$4,02
billion in the first half of the year, compared to US$3,12 billion received in
the comparable prior year,” he said.
Dr Chiwenga urged local businesses to embrace regional
integration and the recently operationalised African Continental Free Trade
Area (AfCFTA) to widen their export markets in the quest for increased
intra-Africa trade.
To thrust the on-going economic recovery to greater
heights, he briefed delegates about the massive rollout of several key
infrastructure projects such as roads, airports, irrigation, housing, energy,
sewer and water reticulation as well as dams.
“These programmes and projects are meant to restore basic infrastructure without, which our desire for rapid but balanced economic growth and development cannot be realised. Infrastructure is the lifeblood of the economy,” said VP Chiwenga. Herald
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