adminVandudzayi Zirebwa Buy Zimbabwe
The past weeks have seen the release of various economic statistics that indicate that the Zimbabwean economy is slowing.
First it was the World Bank who noted that imports have increased by 26 percent to US$3,9 billion as compared to the same period last year.
The latest CZI survey also revealed that capacity utilisation has maintained a downward trajectory and is now 39,6 percent from a figure of about 44 percent recorded in 2012.
Exports are also said to have remained stagnant and uncompetitive, while companies with orders to supply external markets are failing to do so because of the inability to secure funding. The reasons cited for this state of affairs include liquidity constraints, antiquated machinery, policy inconsistency, energy challenges and an inability to compete against cheap imports mainly from South Africa, China, India and Brazil.
Given all these depressing statistics the temptation is to believe that our situation is one that has no remedy and is a precursor to an even worse economic outlook.
Equally if we are not careful we may fall into the trap of citing one depressing economic statistic after another and in the process create a scenario where the prevailing sentiment is one of gloom and doom.
While prudence does indeed suggest that we cannot escape the facts that are staring at us, it is equally incumbent upon Zimbabwe to situate everything within its proper context and realise that what is being experienced at the present moment are results of a pattern that began some five years back.
The period which we went through with the unity Government and uncertainty that gripped our country as indeed it does with any country around election time only served to worsen our condition. Increasingly, it has become obvious that dollarisation was perhaps the only significant policy intervention of the past five years and only served to move us from an era of hyperinflation to one of stability, where businesses could now plan and trade without the fear of losing value, recapitalise, retool and borrow in the belief that returns would allow them to pay back.
The initial euphoria of this era did indeed see us appear to be on an upward trend. Pent- up demand also restored capacity in various sectors that had virtually gone standstill.
People also returned to work after a period where productivity had slumped to marginal levels. We also benefited from businesses like the telecommunications sector that had invested for the long term and thus were ready from this new era.
Mining, too, which depends on stability, was quick to rebound and came to the fore by providing figures that suggested all our woes were over. Sadly, the fundamentals that drove our economy were never really attended to. And as we became more dependent on the US dollar, opened up our borders to foreign traders, products and services, our own competitiveness came into sharp focus.
Over time, every little movement we made was taken away as salaries were increased, utility bills also increased and productivity decreased against high costs in many of our local companies.
Where we once made a dollar, that margin was reduced but costs remained high and inelastic and yet few had the courage to re- align and do business in the proper way.
Corruption also came in a big way as more middlemen came on stream and began adding to the cost of doing business.
In summary, that explains most of the economic statistics that we are currently receiving. For the past years of the unity Government, we did a poor job of attending to economic fundamentals of the economy.
The issue then is to accept that the statistics coming out now are real and as unflattering as they are, are reflective of an era gone by and say little of our capacity to turn tables and begin a rebuilding process that assures our country of sustainable economic growth.
Now is the time to identify areas within our economy where we must reverse the tide. For starters, we are aware that agriculture is the mainstay of our country and that fertilisers are perhaps the most significant input critical for that sector. We also are aware that in 2013 alone fertilisers have taken up the bulk of imports at US$673 million yet we have companies such as Sables, Windmill and ZFC who are struggling to provide this key input.
In the same way the new Government moved swiftly to address the impasse at Chisumbanje Ethanol Plant, we expect solutions to be targeted at these industries.
The new Government should also pay close attention to various value chains that drive the Zimbabwean economy.
Productivity, market linkages, market access and financing of the different components of the economy must be looked at simultaneously. The Livestock Association of Zimbabwe has done an interesting research with respect to issues that impact on our livestock situation in the country. In that paper they demonstrate how attending to the energy crisis we are experiencing can reduce our costs and enhance competitiveness.
The Minister of Agriculture and Mechanisation and Irrigation Development, Dr Joseph Made, has also made an impassioned plea for our country to attend to the water and electricity situation in the country if we are restore our agricultural productivity.
A number of organisations have also come with various submissions that indicate that with sufficient will Zimbabwe can attend to the myriad of economic challenges that it is facing at the present moment. Now more than ever, Government and the private sector must work in unison in crafting solutions and embarking on actionable plans.
Retailers and various suppliers must be commended for having the courage to get together as they will do next week in the conference set to examine bottlenecks that constrain their ability to work together.
With such commitment it should be possible to share information on practices that ensure that Zimbabwean suppliers regain lost market within the retail market.
Till next week, let us bear in mind that for Zimbabwe to prosper, it is critical to support the local economy.
Suppliers interested in participating within the Zimbabwean retail space kindly get in touch with Buy Zimbabwe offices. Till next week,
God bless.
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Online Reporter