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Kiyapili Sibanda, Business Reporter
RESERVE Bank of Zimbabwe (RBZ) Governor Dr John Mangudya says the country needs to produce more to substitute imports and also boost exports in order to earn more foreign currency.
Zimbabwe is a victim of excessive imports with average annual trade deficit of more than $2 billion, according to official statistics.
The trend has been blamed for suffocating viability of local companies, draining scarce foreign currency from the economy and loss of jobs.
Dr Mangudya said in an interview that the key to resuscitating the economy lies in revitalising the productive sector so as to reduce imports.
He said the expected bumper harvest this cropping season as well as increased output from the mining sector, were key in turning around the economy this year.
The RBZ boss said Zimbabwe’s economy was on the mend and heading towards major transformation mainly driven by the agriculture sector and mining.
“The forecast is that the economy will grow by more than three percent this year and it will transform from being a retail economy to a productive economy. This will reposition Zimbabwe as an economic power house,” said Dr Mangudya.
He said the gains made in the agriculture sector which expects to harvest more than two million tonnes of grain this cropping season, courtesy of the Command Agriculture and the Presidential Input support schemes, would see the country regaining its status as the region’s food basket.
Zimbabwe has already suspended grain imports as the country has enough maize in its reserves to last it until the harvest.
Dr Mangudya said increased agricultural output would also provide key raw materials to agro-processing companies.
“Companies producing cooking oil, for example, will have raw materials such as cotton seed and soya beans being produced locally thereby helping in reviving local industries,” said Dr Mangudya.
To support growth of local industries, the Government last year removed several goods produced locally from the Open General Import Licence (OGIL) which means very restricted importation of the goods.
These goods include basic food stuffs, pharmaceutical products, hardware and building materials.
Dr Mangudya said tobacco and maize farmers had done well this year and would obviously enjoy the benefits of their hard work.
“The agricultural industry is a key sector for Zimbabwe’s economy. Tobacco and cotton are the major foreign currency earners and this time we expect close to a billion dollars.
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