Zimpapers Logo

Political developments indicate that the country will hold general elections sometime this year.

We are, however, deeply interested in the country’s economic rehabilitation as we wade into the new year more than in its political twists and turns umpired by South Africa’s President Jacob Zuma.
The are two questions on the lips of many people.

Is Zimbabwe going to re-introduce its own national currency or will it continue with the present multi-currency regime throughout the year?
What measures will the Government take to re-invigorate the national economy.

Zimbabwe’s economy depends mainly on the mining and the agricultural sectors.
The country is in the Southern African belt from which the world gets more than 40 percent of its uranium, asbestos, zircom and copper requirements.

The discovery and exploitation of the Chiadzwa diamond fields in Manicaland Province’s Marange confirmed mining as Zimbabwe’s economic forte.
Agriculture is second to mining with tobacco as that sector’s goose that lays the national economy’s golden egg.

The manufacturing industry is another important economic sector of Zimbabwe, with the textile industry standing head and shoulders over the other manufacturing sub-sectors. It has, however, taken a nosedive.
The development of the mining industry depends on the world demand for Zimbabwe’s minerals.  The higher the demand, the better the prices for the mineral exports and the easier it is to develop that industry.

The Government cannot, however, control that demand.
A second important factor that the Government would need to look into to develop the mining industry is the transport infrastructure. Good transport infrastructure facilitates and accelerates the movement of mineral exports and that of import of capital goods.

Factors likely to impede the development of this very important economic sector are corruption and bureaucratic inefficiency. Minus these two negative factors, other things being equal, the country’s mining industry seems to have a promising future, especially in the short term.

However, we should hasten to add that among the ‘other things being equal (ceteris paribus) we should mention political unrest and or uncertainty as being a major constraint to economic development in general whenever and wherever it features.
Zimbabwe’s agricultural sector is usually (usually does not mean always) adversely affected by extraneous variables with drought the major one.

This season’s rainfall pattern appears to be both patchy and paltry, a sure cause of a less than satisfactory agricultural output. Apart from cloud seeding the Government cannot do much. Irrigation by means of subterranean water can be viable for small-scale farming and only in areas with perennial aquifers.

Cloud seeding used to assist a lot of agricultural enterprises in Zimbabwe but the Government some years ago most unfortunately suspended it.
Re-introducing a national currency could be an option obviously only after the Government has concluded that the factors that caused the dire distress of the Zimbabwean dollar in 2008 would not appear again resulting in a recurrence of the disastrous hyper-inflation that led to the abandonment of the country’s currency.

It would appear in the opinion of this author that Zimbabwe would serve its national economic interests well by formally joining the multilateral rand Monetary Area (MMA) whose members are Lesotho, Swaziland, Namibia and of course South Africa.

Since Zimbabwe already uses the rand, it should not be difficult or disadvantageous to join those MMA nations three of which (Lesotho, Swaziland and Namibia) use two currencies, that is their own and the rand whose exchange rate is at par.

The advantage in becoming an MMA member is that group’s currencies enjoy an exchange rate stability which the Zimbabwean dollar lacked eventually precipitating massive inflation that ruined the national economy three years ago.

It would also help the Zimbabwean nation to examine in detail the advantages and disadvantages of the membership of the Southern African Customs Union (SACU) which groups together South Africa, Lesotho, Swaziland and Namibia.
Both these moves, joining the MMA and SACU, would be in harmony with the African continent’s economic integration wishes and objectives as expressed in the 1980 Lagos Plan of Action and the 1981 Abuja Treaty.

Another important factor in Zimbabwe’s favour is the current legalisation of the residential status of Zimbabweans in South Africa.
Most of those people are either workers or business practitioners. Their earnings are in rands and so are their remittances home.
By home we mean Zimbabwe where we are already using the rand for both domestic and foreign trade.
Our exports to South Africa are paid for in either rand or United States dollars, so are our imports from South Africa, and it is South African imports that are on every shelf of every Zimbabwean supermarket these days.-Chronicle