Production, value addition key to exchange rate stability

Walter Nyamukondiwa–Kariba Bureau

Zimbabwe is pursuing the trajectory of increased production and value addition of the agricultural and mineral produce as part of medium to long-term measures to tame currency volatility, Finance and Economic Development Deputy Minister, Clemence Chiduwa, said this week.

 Speaking at a National Development Strategy 1 dissemination workshop in Kariba on Tuesday, Deputy Minister Chiduwa said the willing buyer-willing seller intervention would soon lead to the standard determination of a rate for the local currency against other currencies. 

“Currency volatility is the elephant in the room when it comes to our economy. All other fundamentals, including a healthy current account surplus (that is foreign currency inflows grater than outflows) and positive growth are holding up. 

“The madness with the (forex) rates on the market will come to a point where it runs out of steam and at that point, we have to ensure that it is stable at that level. Let it go haywire because of various factors but it will grow weary.” 

Positive steps and incentives such as duty exemption, power augmentation projects, upgrading of the transport system, supporting agriculture and mining, would help reduce dependence on imports which has spurred demand for the US dollar. 

“Production and value addition will be key in promoting currency stability. We may come up with interventions but the most important thing for a strong and stable currency is to increase production so that we cut back on the need to import as the goods would be produced locally,” he said. Mashonaland West province was commended by Deputy Minister Chiduwa for having the third largest provincial GDP contribution of at least US$133 million to the national GDP. 

Minister of State for Provincial Affairs and Devolution for Mashonaland West Mary Mliswa-Chikoka said national blueprints such as the NDS1 should be embraced by everyone, regardless of their political affiliation, as they were aimed at improving the economy. 

“The NDS1 gospel should cascade to the grassroots as it was aimed at ensuring that no one and no place was left behind in terms of development. Everyone should know what role they should play in the realisation of an upper middle income economy by 2030,” she said.