Published by the government of Zimbabwe
Victoria Ruzvidzo and Perry Kaande
28 August 2008
Harare — Reserve Bank Governor Dr Gideon Gono says all political parties should put national interest first as Zimbabwe was endowed with enough resources to turn the economy around but that could only manifest in a stable political environment.
The three main parties - Zanu-PF, MDC-T and MDC - have been engaged in talks under the aegis of Sadc for the past year, but the resultant power-sharing deal has been signed by two of the parties with MDC-T reneging on earlier agreements.
Addressing delegates at the annual ZimTrade Exporters' Conference in Harare yesterday, Dr Gono said politics and the economy were inseparable.
"Any country's political environment sets the atmosphere of business expectations that in turn find expression in investors' decisions, as well as production and pricing behaviour across the board.
"It is, therefore, imperative that all political formations in the country play their part in setting a positive tone for business and investment prosperity through the Zimbabwe First approach in whatever they do," he said, adding that Zimbabwe was too rich to be poor.
Furthermore, Government, business and labour urgently needed to revisit the formulation of a social contract as a pillar for sustainable economic recovery and growth.
This was an imperative "that cannot be postponed any day longer".
"Indeed, it is tragic that having signed preliminary protocols months and months ago, there has been no material follow-ups to put practical substance to any social contract."
It was through such procrastination that the nation had lost a golden opportunity to stabilise the forces that were driving markets out of control, he added.
". . . the centrality of the social contract as a critical pillar to the resolution of our country's current setbacks is as valid and as urgent as it was several months ago when Government, labour and business signed the conceptual protocols towards a social contract," said Dr Gono.
On June 1 last year, the three social partners signed protocols on foreign currency mobilisation and management, prices and incomes stability and productivity enhancement but they have not yet taken effect.
The central bank chief challenged exporters to beef up their operations, stressing that a vibrant export sector would address many of the challenges facing the economy.
He said the hyperinflationary environment, capacity underutilisation and continued critical shortage of foreign currency for imported inputs and machinery were among
the challenges constraining export performance but "it is imperative that as Zimbabweans we realise that our future lies squarely in our hands, and our resolve to confront these setbacks head-on".
Foreign currency generation was pivotal to the quest for macro-economic stability, growth and social prosperity.
A rundown of impediments such as fuel shortages, unavailability of agricultural inputs, capacity underutilisation and external debt arrears were all a result of inadequate foreign currency in the formal market.
"What must be apparent is that at the core of any solution that must deliver our economy from the current setbacks must be the prioritisation of foreign exchange generation," he said as he addressed exporters at the meeting whose theme was "Bringing Down the Barriers -- Gearing Up for Export Success".
"We cannot have a good agriculture production without inputs and we cannot have inputs without foreign currency. It's as simple as that."
The governor pointed out that firms should not expect to be spoon-fed by the central bank saying the onus was on business to produce.
"Equally critical is the need to recognise that the Reserve Bank itself does not produce foreign currency. We do not have a foreign currency printing machine, but we are rather a mere facilitator in ensuring the overall management of this strategic resource."
Zimbabwe was endowed with abundant mineral resources such as diamonds, platinum, nickel, methane gas; unique tourist attractions; fertile farmland and human capacity such that it baffled the mind why the country was experiencing acute foreign currency shortages.
He challenged exporters and other generators of foreign exchange to play their part by channelling their proceeds into the formal interbank market.
He dispelled the belief that the central bank was dictating to banks the daily interbank rates.
"We have never interfered in the process of the interbank exchange rate determination since we liberalised the system. I would like to challenge any bank that received a call from the governor saying you must use this or that rate to come forward," he said.
Dr Gono, however, hailed ZimTrade and other export- oriented organisations for being strategic to export promotion.
Speaking at the same meeting, Common Market for Eastern and Southern Africa secretary-general Mr Sindiso Ngwenya said Zimbabwe's key strengths lay in a robust and competitive industry, which though currently challenged by capacity constraints, was able to deliver quality products.
He said the financial sector had the capacity of challenging the region as it was robust and was endowed with high skills that had become a base for skilled resources internationally.
"Our sophisticated financial sector has potential to export finance service skills to nations that are more populous than we are and yet only a fraction of those populations are banked," he said.
Ultimately in bringing down internal barriers to trade, he said Government and business needed to work together to ensure an all-inclusive consultative process.
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