Oliver Kazunga Senior Business Reporter
THE persistent dry spell being experienced countrywide and in Sadc is likely to impact negatively on industry prospects and the projected 2.7 percent economic growth this year, industry experts say.

The Meteorological Services Department has warned of a prolonged dry spell — induced by the ravaging El Nino effect — which has dampened hopes for a good harvest with most crops already wilting due to moisture stress and excessive heat.

Confederation of Zimbabwe Industries (CZI) Matabeleland Chapter president Walter Chigwada said agro-processing industries were set to suffer the most.

“The picture for companies’ prospects this year is not pleasing. The greatest challenge facing many companies is the adverse effects of drought that we’re having not only in Zimbabwe but regionally,” he said.

Surveys have shown that most crops in Matabeleland region, Masvingo and Manicaland are already a write off.

“In Matabeleland, we’re not only affected on the crop side but also livestock because there aren’t pastures and that is going to have an impact on agro-processing industry,” Chigwada added.

“We’ve had a tough time and if things continue like this it also means the projected macro-economic growth projection for this year will have to be revised downwards. As things stand, already the contribution of agriculture to the Gross Domestic Product has been affected.”

Agriculture is the backbone of the country’s economy providing the bulk of raw materials to industry, food and employment to a majority.

The government has already mobilised $260 million to import grain for drought prone areas for this year up to 2017 to avert starvation.

“Due to drought, which is threatening the country and the region at large, the hectarage under tobacco is likely to be lower this cropping season. And last year, the hectarage for the same crop was 30 percent lower than the previous season,” said Chigwada.

He, however, said industry was pinning its hopes on the speedy conclusion of measures aimed at improving the ease of doing business.

He said this would go a long way in attracting foreign direct investment in other sectors of the economy such as tourism, mining, information communication technology and SMEs.

Falling international commodity prices, erratic power supplies, cheap imports and high costs of doing businesses have also been blamed for suppressed domestic output and lack of competitiveness.

Chigwada also said the local mining industry could anchor the economy based on improved prices of minerals such as gold and platinum on the international market.

The mining sector has been one of the most critical drivers of economic growth since 2009, contributing more than 60 percent of total exports.

The government has attributed the mining sector’s boom to a stable macro-economic environment brought about by the adoption of the multicurrency system in 2009.

 

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