adminAs with hundreds of other villages scattered across the country, people from the plains of Ganda in Bikita have witnessed little change in their economic fortunes for generations.
For the most part, they are preoccupied with the pursuit of mundane daily survival activities, desperately eking out a living in conditions that have seen little or no change for ages. They are a microcosm of what is in effect a generational national problem of economic underdevelopment and its multi-layered challenges.
But that is about to change dramatically, not only for Ganda, but the whole country of Zimbabwe, if the Government walks the talk and actualise the pursuit of a US$100 billion economy by 2040.
Such an achievement will increase per capita income levels 16 times for ordinary Zimbabweans and materially impact on the livelihood of all the people across the length and breadth of the country.
A US$100 billion economy implies that the economy grows at a princely pace of 10 percent per annum over the next two decades and inflation is contained at no more than 5 percent per annum. Cumulatively, such a combination of robust growth and low inflation will guarantee that the economy achieves US$100 billion over three decades, to 2040.
Some perspectives on the economy
The inclusive Government of Zimbabwe is to be commended for all the progressive policies being implemented since the advent of multi-currency and the first round of liberalisation measures as part of STERP 1. To be fair to the Government, the economy has resurrected from the 2008 meltdown.
We are no longer at ground zero. Here are a few noteworthy indicators:
l Food shortages that blighted the economy in 2008 are a historical perspective – there are issues of grain deficits in some parts of the country but not to the same scale;
l Capacity utilisation has increased steadily (and unevenly) from levels below 10 percent in 2008 to current levels of about 40-50 percent.
A few sub-sectors have surged beyond 70 percent;
l Progress has been made in respect of restoring key services in education and health – yes, there are still major residual issues in the social sectors of our country;
l Fiscal revenue is increasing steadily to levels just above US$230 m per month;
l Banking sector deposits have also improved measurably to about US$3 billion, despite the acute liquidity challenges;
l The mining sector, agriculture and the ICT sectors are showing signs of recovery, with significant opportunities for further growth and
l The multi-currency ended hyperinflation and brought stability.
Broadly, there is a sense of direction, with the economy growing for the third successive year in 2011, quite at variance with the rudderless and arbitrageur driven hyperinflation economy.
This is not to suggest that the economy is now in cruise mode. The spectacular growth rates approaching the shores of 9 percent per annum; compare remarkably with China and India – the powerhouses of the global economy. More realistically, it is actually a reflection of an economy coming from a very low base – how far the economy had decelerated to ground zero by 2008. Economic statistics often tell a cogent and coherent story, but it is rarely a complete story and must be qualified accordingly.
Our economy still faces hurdles ahead, chief among them, political uncertainty, amplified by the endless haggling in the coalition Government.
We face major structural issues in respect of energy and power supplies, banking sector vulnerabilities, uneven growth, widening income disparities, jobless growth and hence massive unemployment.
Crime and corruption are becoming endemic, emblematic of the socio-economy wide implications of a decade long contraction.
Our social and health indicators offer staggering insights in respect of the kind of challenges we must overcome as a nation, unless we live in denial, the evidence is everywhere among our sprawling urban and rural poor: A US$100 billion economy will address most of these challenges below:
l As much as 70 percent of the people live below the Poverty Datum Line, with perhaps as much unemployment;
l Our nation is 95 percent donor drug dependent;
l Over 50 percent of our under five years are malnourished (or receive donor supplements);
l Our maternal and infant mortality rates are just slightly better than Niger
l Our life expectancy levels are various estimated at less than 40 years.
Parameters for a US$100 billion economy
A $100 billion economy requires nothing short of a far-reaching paradigm shift, similar in scope to the Deng Xiaoping Chinese economic revolution in effect since 1979. There are clear parameters for sustained growth towards a US$100 billion economy.
These parameters are:
l Clear vision and mission
l FDI and the dynamics of economic growth
l An integrated development model
l Understanding global dynamics
l Far-sightedness and focus on the long term
l Mastery of international engagement
l To be continued.
l Shepherd Mverecha is the Head – Group Economics and Strategy, ZB Financial Holdings. The views he expresses in this series are, however, personal and do not necessarily reflect the views of ZB Financial Holdings as a group.
Online Reporter