adminaverage mark by year-end.
“At this rate, we can probably hit the 50 percent mark on average, assuming the environment remains unimproved,” he said.
“Clearly, the country has only one way out of the current quagmire – to attract Foreign Direct Investment necessary for growth and development.”
Mr Binha was responding to inquiries by the Herald Business on the failure by local industries to reach the target of 60 percent capacity by June 2011.
He said that the economy has reached a “plateau” as far as capacity utilisation is concerned.
“However, the economy is stuck in an untenable equilibrium of low capacity, low wage and low employment which is basically not sustainable,” said Mr Binha.
He said that the economy is currently experiencing sub optimal growth to reflect the challenges confronting the economy – principally liquidity challenges, capitalisation and working capital challenges, power outages, uncertainty and generalised low business confidence.
“The economy has potential to grow by 10 to 12 percent annually, but the wheels of economic activity are evidently slowing and this year’s growth may be 7,5 to 8 percent,” he said.
Mr Binha said the country’s policy thrust should be to improve the investment environment, provide leadership on public and private partnerships, accelerate structural reforms, including privatisation and put in place measures to deal with banking sector vulnerabilities.
“Zimbabwe requires substantial capital flows to underpin economy recapitalisation, overhaul the antiquated machinery which are teeming in our factories, replace technologies of decades ago with new technologies and revamp our infrastructure,” he said.
Online Reporter