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FINANCE Minister Patrick Chinamasa says Government will focus on ramping up production across sectors since the economy is now on firm grounding.
Giving an update on the state of the economy at the ZANU-PF 16th Annual National People’s Conference in Masvingo on Friday, Minister Chinamasa said while there was a number of challenges still facing the economy, these could be overcome.
“Some challenges remain, but we are going to work on those challenges. The challenges are to do with fiscal deficit, current account deficit, debt overhang, low productivity, liquidity and cash challenges,” Minister Chinamasa said.
Zimbabwe has struggled with issues of production due to outdated technologies and old equipment or antiquated machinery, as it bore the brunt of a decade long economic crisis to 2008.
The challenges from the economic meltdown affected industrial and agricultural production, Zimbabwe’s capacity to service debts, competitiveness of industry and generation of exports, leading to liquidity problems in the economy.
But Government has responded with a cocktail of effective policy interventions including restricting importation of products that can be made locally and reforming doing business conditions to attract foreign and local investment.
“We have put in place measures to deal with each and every one of these challenges. I want us to understand that these challenges are primarily to do and are symptoms of low productivity,” Minister Chinamasa said on Friday.
The economy is estimated to grow by a marginal 0,6 percent this year due to the effect of the El Nino induced drought and low global commodity prices, but the economy is forecast to grow relatively faster; 1,7 percent, in 2017.
The finance minister said going forward, it was imperative that all efforts be channelled towards production in all sectors of the economy, as this was the “answer to our economic problems”.
On enablers, he said Government had recently signed a Build Operate and Transfer agreement for the dualisation of the Harare to Beitbridge road, adding that Government would soon conclude a similar deal for dualisation of the road linking the capital city and Chirundu.
With regards to interventions on power supply, the minister said expansion of Kariba South was now 65 percent complete. This will add 300 megawatts to the grid. Nearly a billion dollar loan has also been concluded for the 600MW capacity expansion of Hwange Power Station.
Disbursements of the loan for Hwange power station expansion are expected to start next year.
An $85 million loan has also been secured from India Export and Import Bank for rehabilitation of Bulawayo thermal power station. This will restore the thermal power station’s generating capacity to 90MW.
Looking at other sectoral achievements, Minister Chinamasa said a firm foundation had been laid in the food security sector to ensure Zimbabwe will be self-sufficient by the end of the 2016/17 agricultural season.
“We have been able to secure eight months supply of maize reserves through imports and also maize that we were able to buy from our farmers. This season, we have spent more on agriculture, than any other year.
“We are engaged in Command Agriculture, ARDA is engaged in graduation farming programme, mechanisation through the More Food for Africa initiative is underway and progressing well, input schemes for cotton and maize are also progressing well,” the minister said.
Minister Chinamasa said Government had spent $85 million on irrigation schemes this year and $42 million on the cotton input programmes.
He said Government would rehabilitate all small-scale irrigation schemes countrywide through support from the International Fund for Agricultural Development and Japan International Co-operation Agency.
Still on agriculture, he said efforts were underway to address sticking points to the issue of land title through issuance of 99-year leases to secure land tenure.
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