adminThe Minister also risked a costly and devastating nationwide civil service strike when in his statement, the country’s biggest workforce — which has been threatening to strike and has given Government up to the end of this month to review their pay — got no reprieve in its quest for better remuneration. Minister Biti ruled out a salary review for civil servants but offered no alternative incentives. At the same time he warned that the Government faces the real danger of defaulting on salary payments due to the “limited fiscal space”.
While we empathise with the Government on the paucity of its resources, we feel civil servants need to be incentivised in other ways other than monetary terms. Housing stands and duty free imports on vehicles are some of the ways Government can placate the restive civil service while working on a long-term solution to boost national coffers.
In his statement, Min Biti revised the economic growth forecast from 9,4 percent to 5,6 percent due to revenue shortfalls and the poor performance of the key agricultural sector which has been severely underfunded. Agriculture, the backbone of the economy, requires $2,4 billion annually to achieve optimum results but the Minister made no specific mention of how much has been set aside for the sector.
Agriculture is expected to decline by 5,8 percent this year against an initial projected growth rate of 11,6 percent. This has been attributed to poor harvests that were spawned by the late onset of rains and the long dry spells from the end of December last year.
“Contrary to our 2012 gross domestic product growth projections of 9,4 percent, indications are that the economy will shed almost four percentage points to grow by only 5,6 percent which also falls short of the Medium-Term Plan annual average target of 7,1 percent,” said Minister Biti.
He said Government missed its revenue target by $244 million by end of June with a large chunk being shortfalls on diamond dividends of $229,3 million.
While we acknowledge the important role that the mining sector, particularly diamonds, is playing in the economy, we feel more attention should be given to agriculture to boost the performance of the economy. Farmers need to be financed adequately to increase yields. Specialised areas such as tobacco, maize, cotton and wheat farming require timely availability of inputs to achieve the desired yields. Government should therefore look into creating a pool of specialists in these areas and fund them so that the nation’s food security is assured.
We agree with Minister Biti that in preparation for the next farming season, all stakeholders — farmers, bankers, Government, development partners and promoters of contract farming — would need to mobilise resources.
While Minister Biti’s statement painted a picture of gloom, all hope is not lost however, as inflation is expected to remain within target while proposed increases in customs duty on flour imports and excise duty on diesel and petrol are expected to unlock about $20 million in additional revenue.
The mining sector is projected to grow to 16,7 percent from an initial forecast of 15,9 percent.
Total exports from January to June rose by 45 percent to $1,6 billion from $1,1 billion thanks in a large part to the mining sector which accounted for the bulk of the exports receipts at 73 percent.
Zimbabwe therefore needs to attend to the critical agricultural sector to augment the giant strides made in mining so that the country’s economy gets back on track.
Minister Biti is also on track when he says we need to attract foreign direct investment, attend to power shortages, sort out the matter of leases on farms, restore markets and achieve finality in the politics of the country to aid economic recovery.
With the referendum and elections expected later this year, we anticipate the creation of a stable Government that will steer the country to economic prosperity.
Online Reporter