adminEurope has seen its economy enter into turmoil through relying on the service economy rather than going back to the productive economy, which enabled them to build their societies in the first place.
The service economy is primarily that of consuming not what the country produces but that which it imports.
No one will deny that services are very important to society. But, the major problem comes when the ability to pay for those services is constrained by lack of money.
This is the scenario in the Middle East where the restive young population has been led to believe that the new revolution will deliver a better life.
Some are beginning to question where the jobs are that they were promised? Some European countries have adopted austerity measures to curtail the growth of the
service sector by freezing salaries for public sector workers, cutting entitlements for families, pension payments etc.
The newly elected president of France won the election on promises of economic growth rather than resorting to austerity measures.
But, the major hurdle is where he is going to get the money to pay for the social services and other commitments of public expenditure.
While this is going on in Europe, Africa has to come up with its own economic blueprint for sustainable economic growth based on production rather than on a service economy.
Already African countries cannot afford the costs of paying for universal health care, unemployment benefits when the unemployment rates are above 50 percent.
As for Zimbabwe in particular, the emphasis should be on economic growth of the productive sector. No matter how painful this is going to be, there is no other way out. We now own the farms, which must be fully capitalised to produce primary products for our factories.
The over-reliance on imports for consumables will not contribute to economic growth in the short or long term.
Today, factories to manufacture consumable goods for supermarkets are under-utilised.
South Africa is supplying the country with consumable products in the supermarkets.
A month does not pass without a supermarket being opened to sell South African products.
If anyone believes that this is a way of growing an economy, then the country will regret it sooner rather than later.
Yes, many people welcomed the introduction of the multi-currency system and the availability of imported products in the country. The euphoria is now over.
We have a liquidity crisis. Our money is tied up in products that cannot be turned into cash easily.
But the productive sector is starved of money to revive it. Who cares? We have all the consumables we require although they are imported. We wonder why our children cannot find jobs. The public sector has no money to pay its workers let alone employ any more people.
This is the problem of relying on a service economy. Money to meet all the expenditure required will run out.
It is like drawing water from a dam without any more rainfall to keep the dam replenished.
The dam will dry out. Others say, it is like milking a cow without feeding it. Africa is on the threshold of economic growth by finding markets for its primary products in mining and agriculture.
But, Africa cannot only depend on selling primary products but should venture into manufacturing or what is being called value addition.
For example, we have to develop a domestic l To Page B9
Online Reporter