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Bernard Bwoni Correspondent
Could it be that the wheels of the ZIM-ASSET economic blueprint have finally begun to turn smoothly? Initial indicators are beginning to point to that difficult but pivotal turn of the country’s economic fortunes. Evolution and revolutions sometimes happen silently and the clusters of the economic blueprint have been steadily taking shape and silently taking off.
Two clusters – Food Security and Nutrition and Value Addition and Beneficiation – are standing out. Over the past few months there have been a number of notable key indicators that things would potentially turn round the corner. There are a number of key positive indicators and nationally there have been some critical developments.
In the Food Security and Nutrition Cluster, recent media reports indicate that the number of Zimbabweans requiring food aid is set to decline from 2,2 million to 565 000 next year owing to a resurgent agricultural sector which has seen maize production going over 1,4 million metric tonnes. This is enough for national self-sufficiency and imports will be mainly for stockpiling and reserves.
This coming season Zimbabwe is also headed for another successful agricultural season with the Presidential Well-Wishers Input Scheme for the 2014-15 season now set to cover all food crops. This is significant and will further reinforce the key Food Security Cluster.
There is also tangible evidence on the ground in the country which points to the Value Addition and Beneficiation Cluster take-off, with a number of critical pro-value addition initiatives taking place nationally.
The Diamond Processing Centre near Mount Hampden is nearing completion and these are some of the anchors of the revolutionary economic blueprint. The US$3 billion Zimbabwe-Russia platinum deal is important in that there are within the deal provisions for the establishment of a refinery once full negotiations are complete.
There are already plans and progress underway for another platinum refinery in Zimbabwe. This a key development in terms of the economic blueprint as currently Zimbabwe is exporting raw platinum matte to be refined in South Africa which shortchanges the country in terms of revenue from platinum group metals that come as by-products of the refined matte.
With value addition, precious metals such as diamonds and platinum will be processed and beneficiation will happen in Zimbabwe instead of exporting the raw product where the country loses out significantly.
With the Infrastructures and Utilities Cluster, there are equally extensive and tangible initial signs of the intended outcomes of the economic blueprint. There is tangible evidence with major developments such as road rehabilitation and dualisation steadily taking shape, new power plants being commissioned and the country’s economic resurgence silently and stealthily taking off.
The stock market in any country is a strong determinant of the economy’s direction with a strong stock market pointing to earning estimates that are on the up and thus indicating that the overall economy is getting ready to grow.
Similarly, a down market may point to declining firm earnings and major issues with the overall economy. Indices on the Zimbabwe Stock Exchange (ZSE) have continued to increase with market capitalisation also continuing to maintain growth since the beginning of 2014.
The market seems to have been performing better, buoyed by firming blue chip stocks and large cap stocks in Delta, Innscor, Seed Co, ABC and Econet, which also happen to be the consistent top traded counters in Zimbabwe.
The mining index has continued its impressive performance from June 2014 to date. The manufacturing index has not performed as impressively as the mining. However, it is an important indicator of the state of the economy as it influences GDP greatly.
The strength of the housing market in Zimbabwe is another important indicator but in the current economic environment, it needs to be used with caution. It could be that house prices in the country are overpriced but it is a demand and supply issue.
The strength of the Zimbabwe housing market lies in the fact that most homes are wholly owned and mortgage free.
There are positive signs in business investment, especially with the recent deals between the country and the Chinese and Russians. The country has remained receptive to positive engagement with all development partners. Although the strength of formal or payroll employment remains weak as an indicator, there is an urgent need to harness the strength of the informal sector employment.
The only way for Zimbabwe is up and you cannot help but notice. Now is the time to take a break from the usual doom and gloom and highlight the positives.
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