Austerity measures under the Transitional Stabilisation Programme (TSP) are now being relaxed as they have largely achieved their purpose, with the economy now poised for growth driven by increased production and exports, President Mnangagwa has said. The 2020 Budget, to be presented next week, will be anchored on productivity, economic growth and job creation, he said.
The robust engagement and re-engagement policy, together with an improved investment climate on the back of ease of doing business reforms, will result in new industries being opened and boost capacity utilisation.
President Mnangagwa said this while opening the Economic Development and Financial Indaba in Harare, which ran under the theme, “Driving towards a 2030 economy anchored on production and exports”.
“This indaba comes at a time when my Government has put in place clear frameworks to transform, industrialise and modernise our economy towards the speedy attainment of an upper middle income status by 2030,” said President Mnangagwa.
“The transition to this goal is painful. We had to institute austerity measures which we are now relaxing since the purpose of those austerity measures has been achieved in the main, with regards to the issue of currency as well as economic fundamentals.
“Our next Budget is anchored on productivity and economic growth and job creation.”
President Mnangagwa said the ongoing retooling in the manufacturing sector will spur capacity utilisation, resuscitation of ailing industries and help establish new ones as Zimbabwe leverages on the robust engagement and re-engagement policy framework.
The President said as efforts to boost capacity utilisation pace up, Government was now implementing the Zimbabwe National Industrial Development Policy (ZNIDP 2019-2023), which seeks to facilitate industrial growth and development anchored on innovation, investment and exports.
He said the theme of yesterday’s indaba was appropriate as it brought to the fore, the centrality of production, productivity and a strong export base “in our desire to accelerate our economic growth”.
To achieve Vision 2030, Government introduced TSP, which set a solid foundation to bring about financial discipline, inclusive economic growth and sustainable socio-economic development.
The President said there was need to make concerted efforts to sustain a national economic growth rate averaging 7 percent a year.
Recently, the President launched the roadmap for a US$12 billion mining industry to be achieved in 2023, which represents a threefold rise in output from the US$2,7 billion achieved in 2017.
As the growth in mineral output and revenues unfolds, linkages were expected with the manufacturing sector, agriculture, services and other economic sectors, which will in turn, have a multiplier effect on overall economic growth performance.
Efforts to increase power generation are also “progressing well”, with Government committing to ensure the right energy mix to guarantee constant supplies.
Presently, key economic sectors are groaning under long hours of power cuts occasioned mainly by low water levels in Kariba Dam and obsolete equipment at thermal power stations, resulting in intermittent breakdowns.
The availability of water was key to economic growth, and the President visited Morton Jaffray Waterworks in Harare to have a first-hand appreciation of the challenges.
But Bulawayo, which has severe shortages of raw water, also needed urgent attention.
As an industrial hub, it was critical to attend to that city’s water challenges.
“Guided by national interest, councils must work with Government with unity of purpose and for the good of all our people, to holistically attend to the perennial water problems in our urban areas.
“In line with the ongoing devolution programmes, economic development must be anchored at the local level. Hence, all of us must shift our mind-sets and promote investment and industry systems at that level, harnessing the resource endowments in the respective communities,” said President Mnangagwa.
The National Trade Policy (2019-2023) and the National Export Strategy (2019-2023), launched by the President in Bulawayo last month, will drive growth in various economic sectors.
The President rallied stakeholders in various economic sectors to diversify and increase their export market base.
Government is committed to ensuring efficiency in bureaucratic procedures during the processing of exports, a move that will help local companies to also benefit from the African Continental Free Trade Area (AfCFTA), which presents a market of 1,2 billion people and a combined GDP of US$2,5 trillion.
President Mnangagwa added that productive sectors will continue to be supported to grow the economy and improve exports.
Government is also open for dialogue with the business community and investors in the quest to revive and grow the economy.