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droughts and other natural disasters such as flooding have seen agriculture being subordinated as the pillar of the economy.
While the sector remains critical inasfar as it provides 60 percent of raw materials to the manufacturing sector while sustaining thousands of families that depend on subsistence farming, its global impact on the economy is rapidly being superseded by such sectors as mining.
Last year, agriculture achieved an 18 percent growth while mining managed a 47 percent growth.
A look at exports will indicate that the mining sector produced half of total foreign currency earnings.
The economy now depends more and more on export earnings as the major source of foreign currency.
An analysis of investor interest also shows that most of the investors from China and other markets are more interested in the mining sector.
This interest is understandable given the rising international prices of gold, platinum, chrome, diamonds and other minerals. Mining has become such a lucrative sector.
The mining indabas held last year were well attended and many economic research firms have also shown a keen interest in the sector. The discovery of diamonds a few years ago in this country has also conjured more interest.
Zimbabwe is endowed with at least 40 different types of minerals, hence so much potential exists for the sector to become Zimbabwe’s literal pot of gold.
On Tuesday the man of God Prophet Emmanuel Makandiwa also prophesied that more diamonds would be discovered as the nation becomes more spiritual.
“We discovered the diamonds because Zimbabwe is becoming more spiritual.
“Not having rains is not a curse but kuti vanhu vaite discover (what God has in store for us).
“Kuchanhongwa dombo sedombo ramusina kumboona. Hapana Mwari paanoisa vanhu mugwenga pasina provision. ( We shall discover more and more diamonds like never before. God would not allow us to go through a dry patch without providing for us),” said Prophet Makandiwa.
He said Zimbabwe’s economy was destined for greater heights, emphasising the need for the nation to become more prayerful.
Such prophecies about the economy will surely come to pass. They tally with what we have already seen on the ground. So far the country has earned more than US$175 million from diamonds alone.
Figures released by the Chamber of Mines last month showed that the country realised US$1,3 billion from mineral exports excluding diamonds last year, up from about US$600 million in 2009.
Higher output and stronger commodity prices impacted positively on the sector’s performance.
In its economic review released in February, ReNaissance Capital said the mining sector had become the engine for growth in this country, buoyed by strong commodity prices and increased fixed investments in the sector.
“This is significant because minerals bring in half of total exports earnings, equivalent to one-third of GDP,” said ReNaissance.
The mining sector is expected to grow by 44 percent this year while agriculture is set to rise by 19,3 percent.
The manufacturing sector, on the other hand, is expected to manage a 5,7 percent growth, from 2,7 percent in 2010.
These statistics invariably show that mining has become the major pillar for economic growth.
Presently, the Chamber of Mines is engaging international financiers to secure funding for the gold sector.
The absence of funding has been the sector’s greatest undoing but the situation appears to be softening.
ReNaissance Capital predicts that by 2015, mining will contribute between 15 percent and 13 percent of Zimbabwe’s GDP, up from the current 7 percent.
Export earnings are expected to grow significantly this year. Research analysts Frost and Sullivan also concur with RenCap that mining is now the engine for growth stressing that an increase in production output of the country’s platinum, diamond, coal and ferrochrome industries will yield positive results.
The growth would be supported by the resumption in production output of the country’s gold mining industry in 2009.
“The introduction of multiple currencies has assisted most of the mining entities within the country to afford purchases of the required machinery, equipment and consumables to increase production output,” says Frost & Sullivan’s automation and electronics industry analyst, James Maposa.
Furthermore, the fact that mining consumables such as fuel, chemicals, explosives and adhesives are now being imported from neighbouring South Africa with relative ease as a result of the new foreign exchange policies will augur well for the sector.
Of interest is that growth in the mining sector is not viewed just in the short term but is expected to shape overall economic growth going forward.
Of course, a lot will hinge on the availability of the US$5 billion that the sector needs to upgrade and expand infrastructure and the feedback on the indigenisation of the mining sector. The National Indigenisation and Economic Empowerment Board has said it will go on a campaign to demystify the process while correcting wrong perceptions.
Of course, ultimately a win-win scenario will work well for the mining sector and the rest of the economy. It’s about time Zimbabwe capitalised on its natural endowments.
This, coupled with an emphatic confirmation from Prophet Makandiwa, should see the economy growing in leaps and bounds.
Remember this country has a penchant of breaking records and pulling surprises when least expected.
In God I Trust!
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