Expedite economic reforms: Industry

Conrad Mwanawashe Business Reporter
INDUSTRY says Government should expedite the implementation of business enablers as well as reforms while putting more effort in clarifying indigenisation laws. In an economic analysis presented at the Confederation of Zimbabwe Industries post- Budget breakfast meeting on Friday, BancABC group economist and CZI economics and banking committee member Mr James Wadi said Government should also speed up the review of the Labour Act. Mr Wadi said although the economy is resilient more needs to be done to ensure prosperity and growth.

He said this after Minister of Finance and Economic Development Patrick Chinamasa last week presented a $4,1 billion Budget which was an attempt to strike a balance among the interests of Government, business and labour.

Mr Wadi noted that Zimbabwe’s revenue and deposits levels at $4,1 billion and $4,6 billion respectively compare favourably with other countries in the region, particularly Zambia. Zambia’s revenue and deposits are at $4,9 billion and $5,5 billion respectively although its economy is almost double the size of the Zimbabwean economy.

Mr Wadi warned that the growth of non- performing loans at a faster rate than loans to the private sector showed that more work was required to correct the anomaly.

“Much more worrying is that NPLs have grown at a faster rate than loans to the private sector. This is one of the structural challenges we are faced with and which must be corrected. From December 2011 to August 2014 year-on-year growth in deposits and in loans has been coming down. NPLs have been rising again pointing to an issue that we have serious challenges and there is need to resolve these challenges,” he said.

Government has set up the Zimbabwe Asset Management Company which has since taken over $60 million worth of NPLs secured against recoverable assets. Some of the positive highlights from the Budget which industry says will take advantage of include export incentives, beneficiation of platinum and diamond, the widening of tax bands which has the effect of providing relief to taxpayers.

Minister Chinamasa also waived stamp duty on cession of mortgage bonds, among other measures aimed at stimulating demand in the economy.

Responding to industry’s comments on the Budget, Minister Chinamasa hailed the co-operation between Government and the private sector.

“As you can see, our figures remain static. I’m sleeping better. My appetite is back. We need to be doing at least 7 percent growth annually for 10 years to catch on lost time. We have lost a good 20 years. Therefore, 3,2 growth per annum is not good enough,” said Minister Chinamasa.