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Dr Gono said there was need for financial and legislative measures to protect local industry by, for instance, increasing levies on imports, in the process realising more revenue while saving significantly on the elusive foreign currency.
Addressing a Press conference to clarify reports of gold coins alleged to have been stolen from the RBZ, Dr Gono said concerns over reliance on imports had come out of a board meeting of the central bank held on Tuesday.
Dr Gono said while the RBZ was happy with the state of the financial sector — describing it as “safe and sound” — the monetary authorities were very worried about the extent and level to which the country relied on imports.
He said banks were behaving as expected by the regulatory authorities and the sector had registered growth in deposits, now estimated at US$4,5 billion.
“You have no need to lose any sleep over the status of banks,” he said. “They are safe and sound. We are also happy to see the growth in our deposit base, almost approaching the US$4,5 billion mark and we have seen the growth in our exports.
“But we remain very, very worried by the extent and level to which we are dependent on imports, particularly of finished products. We cannot build a strong economy by exporting jobs, we cannot build a strong economy by sub-contracting producers in other jurisdictions to produce for us that which we can produce for ourselves. The level of finished product imports is worrying us.”
The country relies on cheaper imported products because local producers either do not have capacity to produce — due to financial limitations — or cannot compete with imports because their equipment is obsolete.
According to the Ministry of Industry and Commerce, local industry requires about US$2,5 billion to retool. But because the funds are either too expensive on the local financial market or simply elusive the country has resorted to imported goods.
As a result, Zimbabwe recorded a trade deficit of US$3,6 billion in 2012 after exporting only US$3,8 billion worth of goods in the year to December 31, 2012. Imports rose to US$5,2 billion in 2012 from US$5,2 billion in 2011.
A negative balance of trade constitutes a trade deficit or a trade gap and occurs when a country’s value of imported goods exceeds the value of its exports.
Dr Gono said there was need to strengthen and capacitate local industry to produce and “that is the only way we can stop the hemorrhaging of foreign currency”.
“That is the only way we can reduce unemployment,” he said. “That is the only way through which we can achieve sustainable empowerment of our people when they are able to have a meal, when they are able to send their children to school, when they able to pay for their medical bills, when they able to have a roof over their heads and then when they are able to clothe themselves. That is the first basic form of empowerment.”
When that was achieved; anything else would be “nothing but just a mirage”.
As the country had no capacity to sustain itself currency-wise, it had to depend on exports, foreign direct investment, portfolio inflows and dividends, lines of credit and Diaspora remittances for hard currency, he said.
Online Reporter