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Michelle Moyo, [email protected]

GOVERNMENT has been urged to tighten the monetary policy framework to curb resurgent inflationary pressures and price distortions while enhancing marketing confidence to consolidate the economic growth momentum, economic analysts have said.

According to African Development Bank report, Zimbabwe remains within range of Africa’s forecast average economic growth rate albeit the projected slowdown in 2024, which has been attributed to the drought situation that is threatening to negatively impact the economy.

The country is endowed with several opportunities for economic growth and development that includes agriculture, mining, tourism, infrastructure, manufacturing, renewable energy and financial services. 

It also has fertile land and a favourable climate for agriculture with higher opportunities in crop farming, livestock production and agro-processing.

Consolidating the growth momentum achieved in recent years and unlocking higher investment value from these diverse should be supported by a strong fiscal and monetary policy framework, especially in terms of enhancing exchange rate stability and general market confidence.

Economic expert, Mr George Nhepera, said it was quite commendable that respectable regional financial institutions like AfDB acknowledge Zimbabwe’s economic transformation journey.

USD: Image taken from Shutterstock

Coming at a time when the global economy is going through turbulent times amid geopolitical tensions in the Middle East and Eastern Europe, rising inflation in many countries and a strong tightening of monetary policies will be critical, he added.

“For us to sustain this growth going forward, we need to pay particular attention to monetary and exchange rate policy reforms that reward industry and the public at large in our nation,’’ said Mr Nhepera.

“The reforms should seek to rebuild market confidence both locally and abroad so that the country can move forward towards attainment of Vision 2030.

“Our pricing mechanism in our country should continue to gravitate towards a market driven approach so as to arrive at true price discovery for all goods and services including the rate or price of foreign exchange.”

Lupane State University institutional business analyst, Ms Shynet Chivasa, also highlighted that exchange rate volatility needs to be addressed as it is a challenge for products paid in local currency.

Once these are addressed, she said this will bring the required confidence as players are able to come up with short to mid-term business plans. 

“Tight money supply is required in the face of high inflation. There is need to address deteriorating road infrastructure to promote tourism, especially in areas that can only be accessed by road especially along the tourism belt. “We need to continue with the agriculture input scheme and promotion of rain water harvesting to promote irrigation. Stable exchange rate promotes mining as well,” said Ms Chivasa. —@Lo7246Lovelyn