Export earnings to close year at US$7bn

Business Reporter
THE country’s foreign currency earnings are projected to close the year at US$7 billion inclusive of both Diaspora remittances and export receipts.

Riding on the comprehensive ease of doing business reforms and economic diplomacy agenda being spearheaded by President Mnangagwa’s administration, Zimbabwe continues to record positive export growth as testimony that the world is warming up to local products.

Analysts have said local and foreign investors are increasingly showing renewed confidence in destination Zimbabwe with the diaspora community also coming on board to support the economy through remittances.

In recent years, the country’s total foreign currency receipts have hovered below US$6 billion with diaspora remittances at below US$1 billion.

This week, President Mnangagwa and his entire Cabinet held a meeting with the Presidential Advisory Council (PAC) and private sector forum representatives.

During the meeting there was general consensus that the economy was not only restructuring but growing, said Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa in a post-Cabinet media briefing on Tuesday night.

“The PAC and private sector representatives commended Government on the achievements, which were attained due to collaborative effort,” she said.

These include the projected year-end Gross Domestic Product growth of 7,8 percent, reduction in inflation from 87 percent to 50 percent as at August 2021.

The minister said the meeting also noted the milestone being recorded in the manufacturing sector, whose capacity utilisation rose from 47 percent last year to 54 percent in the second quarter of 2021.

Industry leaders have now projected that capacity utilisation will clock 60 percent on average as the year ends, evidenced by demand for foreign currency on the auction market from US$11 million in June 2020 to the current US$40 million to US$50 million per week.

“Export earnings have also increased to US$3,9 billion as at 13 October and are expected to rise to US$7 billion by year end, inclusive of diaspora remittances,” said Minister Mutsvangwa.

Creating an export-led growth and substituting imports are at the heart of this drive, which should culminate in the attainment of an upper middle-income economy by 2030. Citing statistics recently released by Zimstat, the country’s trade promotion and development agency said exports grew by 47,46 percent to US$3,75 billion between January-

August this year, from US$2,54 billion recorded during the same period last year.
Minister Mutsvangwa said the private sector leaders also commended the Government for the strides being made on the balance of payments front, where Zimbabwe has recorded a surplus.

They also commended the successful mass vaccination programme, which indicates that at 3,8 million for the first dose and 2,8 million for the second dose, Zimbabwe is among the top-seven in Africa.

The successful establishment of the Victoria Falls Stock Exchange, improved infrastructure development especially under the Emergency Road Rehabilitation Programme and the establishment of innovation hubs to support industrialisation efforts, are some of the key milestones under the economic development front.

The private sector also acknowledged the US$3.5 billion Global Compensation Agreement for former white commercial farmers and noted that this would go a long way in guaranteeing the real value of land, said Minister Mutsvangwa.

“They recommended that, going forward, land should become a balance sheet item, which people can borrow against, turning farming into a business in the truest sense,” she said.

“Following robust debate, the meeting generally agreed that the economy is northward-facing, and that the suggested initiatives be categorized into short, medium to long-term.”