Economy faces stagnation: Business

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ZIMBABWE’S economic outlook is gloomy due to impending drought, prompting industry players to call for the country’s best minds to apply themselves to save the situation.

BY MTHANDAZO NYONI

The southern African nation has not received significant rainfall so far, raising fears of another drought this season.

Industry players who spoke to NewsDay Business said the signs of an impending drought this season were dampening the little prospects of a bright outlook for 2020.

“Our economy is mostly agro-driven and a drought strikes right at the core of any hopes for economic growth. We are optimistic though, going by what the bureaucrats are saying that the rewards for the austerity measures implemented last year will begin to show this year,” Zimbabwe National Chamber of Commerce Matabeleland chapter chairperson Brighton Ncube said.

Confederation of Zimbabwe Industries president Henry Ruzvidzo said real prospects of a drought “will require that the country’s best minds apply themselves to mitigate the social and business impact”.

The economy is facing stagnation characterised by negative growth, high rate of inflation, high levels of unemployment, chronic forex shortages and power shortages.

Gross domestic product (GDP) growth is expected to contract 12,9%, according to reports.

Ncube said government should continue improving the ease-of-doing business, adding that the policy interventions must encourage growth and attract foreign direct investment.

At present, he said, businesses felt over-regulated.

“Confidence must be instilled in the use of the local currency. There is need for business and general stakeholders to seriously start diverting to renewable sources of power as a means of long-term planning for the continued sustainable energy sources,” Ruzvidzo said

“Energy is a key enabler to an economy, especially in agriculture, manufacturing and mining, which underpin our economic growth and well-being. Corruption should be dealt with decisively as it is weighing down heavily all the other efforts to turn the economy around.”

He said the 2020 projection would also hinge on further policy measures, particularly on the monetary front and on energy supply.

Ruzvidzo said it was possible to have a policy mix that encourages growth as already signalled in the 2020 national budget.

“Production for both the local and export markets is key to turning around the economy. Policies must be evaluated on whether they increase or decrease national production,” he said.

“While the prospects for the year ahead appear quite daunting, a single-minded drive towards the national vision complemented by appropriate policies should be sufficient to have the desired
outcome.”

NEWSDAY

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