Tuesday, November 20, 2007

(HERALD) Zim’s economy set to turn around next year: Georgias

Zim’s economy set to turn around next year: Georgias
Business Reporter

ECONOMIC Development Deputy Minister Senator Aguy Georgias has indicated that 2008 could be the year for Zimbabwe’s economic turnaround if the current policies are implemented fully. In his paper on the economic outlook to the end of 2008 at the just-ended Employers’ Confederation of Zimbabwe convention in Nyanga, the senator said he forecast phenomenal gains in sectors such as agriculture, mining and manufacturing, given the right policies. With regard to agriculture the deputy minister said a growth of 28,6 percent was anticipated in in the 2008/09 season.

"Measures expected to drive this growth include the announcement by the Reserve Bank Governor, Dr Gideon Gono, in the Mid-Year Monetary Policy Review Statement announced on October 1. These include allowing cotton growers to retain 20 percent of their earnings in their foreign currency accounts. Production of all other crops, tobacco, maize, coffee included as well as livestock and dairy have been encouraged through a package of incentives and policy measures announced by the Ministry of Agriculture.

"With the ongoing retooling of the key agricultural sector through the RBZ innovative mechanisation programme we envisage increased production of tobacco, citrus, tea, coffee, sugar, beef and flowers for export. I cannot speak for God, but from what the experts are saying, we look set to receive above normal rainfall this season," he said.

Senator Georgias said the envisaged benefits from the improved agricultural performance were expected to impact positively on the manufacturing sector, especially the agro-based industry, which in turn would increase exports and foreign currency earnings.

In this regard, the manufacturing sector is expected to grow by 1,7 percent in 2008, further buttressed by the Basic Commodities Supply-side Intervention (Bacossi) facility, the efficient operationalisation of the National Incomes and Pricing Commission and value addition initiatives and improved supplies of packaging materials.

Turning to mining, Senator Georgias said the sector was expected to grow by 3,7 percent.

The growth was expected to be underpinned by the firming of mineral prices on the world market.

"Benefits will accrue to our economy in the coming year from improved prices for gold, nickel, copper and diamonds.

"Production and export of chrysotile asbestos products has been allowed to continue with South Africa taking up 80 percent of the product.

"Firming prices on the international market should, therefore, come as a boon to increased volumes and enhanced foreign exchange earnings," he said.

Other measures, he said, included the timeous issuance of licences to explore new mines, increased foreign currency availability and improved fuel and electricity supply.

He said other key sectors such as tourism, construction and services were also expected to grow as they were subject to different sets of incentives.

The growth in the different sectors, he added, was dependent on the ability to rein in inflation.

"How to contain inflation is critical to the success of our plans. We, however, envisage a return to single-digit inflation by the end of 2008, all things being equal," he said.

Stabilisation of prices and incomes was also critical.

"This is key to sound economic management and social progress. Experiences of the recent months have been quite telling and instructive in this area," he said.

Another factor that would be crucial to the turnaround, the senator said, was the ability of the country to earn foreign currency.

In this regard, he said, there was need to increase export volumes and foreign direct investment as well as adding value to primary products and harnessing the potential wealth in precious minerals and agriculture produce.

"The outlook for 2008, given a combination of these sound fiscal and monetary policies, looks encouraging.

"With innovative exchange rate management and policy responsiveness to market forces, we look set to achieve exponential increase in export volumes.

"My ministry is coming up with a policy package expected to yield positive results by 2008," he said.

Senator Georgias also called for unity of purpose among all Zimbabweans.

"Cynics may say my confidence is misplaced, that the situation on the ground paints a gloomy picture with odds weighing heavily against revitalisation.

"Since I am not an obsessive pessimist or clairvoyant, I will state here that what we need in this country once again is to pull in one direction in order to withstand the rigours of exogenous factors," he said.

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