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Observations by Reserve Bank of Zimbabwe Governor Dr John Mangudya in his Mid-Term Monetary Policy Statement that the economy is on the mend are nothing short of comforting. This year’s growth is forecast at 3,7 percent by Treasury supported by resurgent growth in agriculture, mining and tourism. It is, however, the nascent signs of recovery in the manufacturing sector, which traditionally has a stronger multiplier effect on the economy owing to both its upstream and downstream linkages to the economy that are reassuring.
There has been a revival of around 350 firms in the manufacturing sector that are benefiting under the Government’s localisation policy, which is supported by Statutory Instrument 64 of 2016 that has seen the manufacturing sector enhance capacity utilisation.
Latest statistics show that some sub-sectors in the food and packaging industry are now operating above 75 percent.
But judging from the prevalent economic headwinds, especially after more than 16 years of Western subversion, the momentum needs to be maintained.
The RBZ, as advisor to Government, believes there is need for more structural reforms from Government, which counsel needs to be heeded.
According to the central bank, there is still need for essential policy measures to enhance consumer and business confidence, including the structural reforms related to the ease and cost of doing business.
Though there is now some movement, the reorganisation of State-owned enterprises has to be pursued expeditiously for it has been outstanding for a long time.
The same needs to be done for 99-year leases, whose bankability remains contentious between bankers and resource-starved farmers.
Without financing, land cannot be a functional asset that it ought to be. Discussions on the issue cannot go on forever.
Similarly, reliance on tobacco, gold, platinum, chrome and diamonds — which products generate 85 percent of exports revenues is not sustainable.
This obviously speaks to a need to diversify the country’s sources of revenue.
As far as the RBZ is concerned, far-reaching structural reforms are a pre-requisite for attracting foreign direct investment and accessing fresh lines of credit that the economy desperately needs.
It turns out, funding for the clearance of arrears owed to the World Bank and the European Investment Bank might depend on them.
“While funding for the clearance of arrears to the IFIs has been secured, the arrears shall be expunged in synchrony with the execution of the structural reform measures presented in the 2017 Mid-Term Budget Review Statement by the Minister of Finance and Economic Development,” explained the RBZ yesterday.
Time is, however, of the essence. Some of these proposals have for long been on the to-do list of policy makers.
It is now time to walk the talk. The Office of the President and Cabinet, through the Rapid Results Framework that is premised on delivering set reforms in a 100-day period, has been quite successful as a vehicle for reform. But more still needs to be done.
As the sun is now shining, it is now time to make the hay.
Online Reporter