admin
Leonard Ncube Victoria Falls Reporter
FINANCE and Economic Development Minister Patrick Chinamasa has called for calm saying the country was on the right path to “overcome the liquidity challenges” facing the economy and would achieve the desired turnaround.
He told Chronicle Business Friday on the sidelines of a Zambezi River Authority Council of Ministers’ 32nd Session here that economic recovery was certain.
He quashed pessimists’ sentiments about the country’s economy and said the government was confident the economy was on the recovery path despite prevailing constraints in the face of illegal sanctions.
“We’re confident we’ll measure up as the economy is resilient. We’ll overcome challenges from liquidity problems arising from sanctions,” said Chinamasa.
He said failure to access capital and financial assistance from the global finance houses continues to weigh down on revival efforts but insisted the government was “confident we’ll find a way around these challenges”.
The minister urged firms to adjust their operations to the current economic climate and heed the call to reduce prices for their products and services to allow recovery.
The business community has said while reducing prices was noble towards enhancing domestic product competitiveness on the backdrop of an influx of cheap imports and a skyrocketing import bill, the government should lead by example by reducing taxes and rates to cushion them from high cost drivers.
Studies have shown that Zimbabwe was a high cost country with a multiplicity of statutory charges and high production costs that muzzle investment.
These cover aspects such as labour costs, water and power tariffs, taxes, transport logistics and information technology.
The findings have prompted the establishment of a Cabinet committee last year that has been tasked to look into these issues and find ways of enhancing domestic industrial competitiveness.
Several firms such as mobile phone operators, Delta Beverages, transport operators and recently bakeries, have heeded the call to slash prices.
Chinamasa commended the move but would not promise any “good” news to businesses regarding symbiotic reduction of charges by government departments.
“It doesn’t happen like that. Already there is price reduction taking place in the economy in terms of distorted prices that were in the industry during the hyper inflationary era where people devalued the United States dollar.
“What’s taking place now is giving proper value to the US dollar,” he said.
“It’s only those firms that are failing that find it difficult. Those that are still surviving should adjust and look at the cost structure to make sure they survive. They’ve to scan the environment and see what are the threats and adapt otherwise we’re happy to say those businesses that have been resilient and survived with the economy are adapting in relation to management and staff complements.”
Chinamasa said the government was taking stern measures to realign government operations with the aim of ensuring the economy was on the mend.
“Cabinet mandated the Public Service to look at the wage bill to see what ways could be employed to make sure it’s reduced. We’re doing meetings of which I can’t give details now as recommendations have to go to Cabinet first.
“All we need now is to see whether we’re going forward. We had to take hard decisions some of them being reduction of the wage bill in relation to revenue collections and reforming the labour laws so that we build flexibility for companies that want to be leaner to be able to do so without liquidating,” he added.
Online Reporter