THE re-introduction of a mono-currency should rejuvenate the country’s manufacturing sector to produce more and benefit from increased export competitiveness, President Mnangagwa has said.
Exports are critical in generating foreign currency for the economy, and over the years Zimbabwe lost its export competitive edge on the back of an influx of cheap imports owing to the use of the stronger United States dollar compared to weak regional currencies.
In June this year, the Government dumped the multi-currency system, adopted since 2009, and introduced the Zim-dollar as the sole currency for domestic transactions.
In his State of the Nation Address in Parliament yesterday, President Mnangagwa said the country’s economy was poised for growth with the manufacturing sector being among the key drivers.
He said his Government was increasing support to the sector to ensure increased domestic output and job creation.
“Our manufacturing sector offers immense growth opportunities through backward and forward production linkages. I am pleased to note that some companies are gradually increasing their production and exports. The introduction of a mono-currency system is also set to boost the competitiveness of our manufacturing sector,” said the President.
“In addition, Government is scaling up its support to the sector through duty exemptions on raw materials and capital equipment, tax breaks and holidays for priority projects and other import management measures.”
This thrust is anchored on the implementation of the recently adopted Zimbabwe National Industrial Development Policy and Local Content Strategy, he said.
Over reliance on imports has not only squeezed the forex supply side but widened the country’s trade deficit and contributed to the demise of several local industries. To promote trade and exports, the President said modernisation of the Beitbridge Border Post and bilateral negotiations on the establishment of One-Stop Border Posts in Victoria Falls and Beitbridge were ongoing. These are being complemented by adoption of smart technologies to speed up freight clearance at border ports of entry.
In the same vein, President Mnangagwa said Zimbabwe would continue to play her part in advancing the Sadc, Comesa, and African Union economic development agenda. As such, he said, in partnership with the private sector, the country looks forward to derive maximum benefit from the operationalization of the African Continental Free Trade Area.
“Our businesses are urged to take advantage of the scope that exists from Zimbabwe becoming a transport and logistics hub. This follows the commissioning of the Zimbabwe Walvis Bay Dry Port in Namibia, coupled with other confirmed bilateral investments,” he said.
In addition, the President said measures were being put in place to establish the SMEs Stock Exchange with a view to unlocking resources for SMEs who have been facing numerous constraints in their operations.
“Our SMEs continue to face challenges of inappropriate technology and unsuitable workspaces. Government has since secured a US$2,7 million grant from the Government of India for the upgrading of 11 existing technology and common facility centres located in the country’s 10 provinces,” he said.
“Additional state-of-the-art machinery for use in manufacturing activities of SMEs are currently being installed. Going forward, Government is committed to support programmes to build appropriate workspaces for SMEs businesses.”
President Mnangagwa also expressed satisfaction with Government’s policy to empower women entrepreneurs, which has seen the Zimbabwe Women’s Micro-Finance Bank disbursing loans to clients throughout the country.
He said his Government was accelerating the operationalization of the Zimbabwe Investment and Development Agency and was already implementing phase two of the Ease of Doing Business Reform Programme.
“It is encouraging that Zimbabwe has been recognized by the World Bank as having made considerable regulatory improvements in five areas measured on the Ease and Cost of Doing Business. This has seen Zimbabwe being cited as a country in the top 20 improvers in Doing Business,” the President said.
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