19 November 2018

Zimbabwe: 'Economy On Sound Footing' - Cross Scoffs At Doomsayers

Photo: The Herald
Eddie Cross

The country's economy is on a sound footing due to Government policy initiatives that have seen growth in the GDP and exports among other indicators, former MDC-T policy advisor Mr Eddie Cross has said.

Writing on his website on Saturday, Mr Cross said the opening up of the country and the re-engagement efforts had raised investors' interest, adding that the current challenges being faced in the country were surmountable.

Mr Cross' analysis echoes President Mnangagwa sentiments in his weekly column, Economic Dialogue, published in The Sunday Mail yesterday.

"The emphasis of 'being open for business' and the start made in returning to the international playing field has elicited considerable private sector interest and I personally have a list of private sector projects that, if implemented, will involve the investment of US$30 billion and will generate many billions in new exports and hundreds of thousands of new jobs," he said. "This was impossible under Mugabe.

"I now hear people saying that the resumption of shortages and fuel queues and the sudden emergence of a parallel market for hard currencies mean that we are going back into the conditions we experienced in 2005 to 2008.

"Nothing could be further from the truth. Our economic fundamentals are sound, exports and the GDP growing rapidly and once the new team in the Ministry of Finance started to tackle the macro-economic problems of the country, they were immediately rewarded by a sharp reduction in the fiscal deficit and we will be in surplus by Christmas.

"At this pace, we will be in a different country by March 2019. Let's keep our current problems in perspective -- if we do, they will not look so entrenched or formidable."

Mr Cross said it was important that people make decisions wisely to avoid losses that happened to those who speculated on exchange rates.

"Seeing things in perspective has never been more important in Zimbabwe," he said. "If we fail to do so, our view of the current problems we are encountering will be distorted and we may all make decisions we later regret.

"When people went out and paid 6 or 7 to 1 for USD and then bought groceries at astronomic prices, they both regret that now as open market prices and conversion rates have fallen back to 2,5 or 3 to 1."

Mr Cross said that Zimbabweans were resilient people who had survived worse economic challenges that occurred in 2009.

Writing in his column, President Mnangagwa said economic indicators were also showing a growth trajectory, with statistics from the National Social Security Authority showing a workforce of more than one million registered employees.

"This is the highest employment level ever in our country, with strong prospects of more jobs coming in the future," the President said. "At a recent meeting I had with the business community, the Confederation of Zimbabwe Industries corroborated this by reporting that 800 000 jobs had been created so far."

President Mnangagwa said companies such as Zimasco, Bindura Nickel Corporation, Paramount Garments, Treger Holdings, Tanganda Tea Company and Suzan General Trading had recorded a quantum leap in exports.

"By September this year, the value of our exports stood at US$3,01 billion, itself an 18,1 percent increase from the US$2,55 billion realised between January and September last year," President Mnangagwa said.

"The central bank has the facts and figures which attests to all this. More broadly, the economy is projected to grow at more than four percent this year and is expected to up to above five percent next year.

"Growth in the gold sector has been phenomenal, rising from the 24 tonnes we managed the whole of last year, to over 30 tonnes recorded so far. The target of 34 tonnes is within our sights.

"Tobacco too made impressive gains. A record of 252,3 million kilogrammes was delivered to our auction floors, up from 190 million kilogrammes delivered in 2017.

"This positive trend shows we will soon break the cyclical shortage of foreign exchange which affects the economy every year this time until the next tobacco crop."

President Mnangagwa said the high demand for foreign currency points to increased business activity as industry, mining and agriculture demanded more raw materials and inputs.

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