adminThe Herald, 24 July, 1980
MEDIUM and long-term growth in the economy rests heavily upon Zimbabwe’s ability to retain skilled manpower and the extent to which the country makes itself attractive to foreign investment, reports RAL Merchant Bank’s Guide to the Economy.
Requests for foreign aid and soft loans have fallen far short of expectations and RAL says that the Government will remain dependent upon funds generated locally from taxation on profits, incomes and expenditure.
“Unless the foreign aid flow is stepped up sharply, an unlikely event while the present conditions of recession continue in many of the major economies, the increased reliance on domestic resources seems certain to lead to Government policies that will encourage business sector confidence and an inflow of private investment capital,” states RAL.
Analysis of the manufacturing sector shows that production in the first quarter of 1980 was higher than for any comparable period in previous years and 14,4 percent higher than January to March 1979.
Prospects for further improved mining output this year are good, says RAL, particularly for minerals like chrome which were affected by sanctions.
“However, the prospects for new investment capital being attracted to the mining industry are heavily dependent on the way that the emerging policies of the new Government are interpreted by foreign and local investors,” warns RAL.
Inflation is likely to be an increasingly severe problem to Zimbabwe in the immediate future, the most severe pressure being likely to arise from food prices which appear certain to increase as a result of higher minimum wages announced two months ago for farm workers.
Commenting on the financial sector, RAL says that liquidity levels will remain high in coming months due to present uncertainties which are likely to limit inflow of private capital and the creation of local investment opportunities.
Online Reporter