FINANCE minister Mthuli Ncube (pictured) says Zimbabwe must engage in an aggressive export drive to weather an imminent global recession and the after-effects of the Covid-19 pandemic, hinting that the country’s economic growth targets may be missed.
The southern African nation, an exporter of primary commodities such as gold, tobacco and other unprocessed minerals, has over the last three years registered steady growth in exports.
Increased poverty, food shortages, energy shocks, debt crises, climate change, inflation and war were some of the main talking points after the World Bank and International Monetary Fund annual meetings held last week in Washington DC.
“Accelerating the ease of doing business reforms to lower transaction costs will actively support our successful engagement and re-engagement with the global community,” Ncube told delegates attending the ZimTrade 2022 Exporters’ Conference held in the capital this week.
“The government is also dedicated to coming up with sustainable solutions for challenges that face our exporters. Indeed as the world is recovering from a pandemic with an imminent global recession, measures to improve product competitiveness have been instituted.
“The spectre of global recession is real. I have just come back from the IMF/World Bank meetings in Washington DC and this was the topic and that’s the take away. So we have to redouble our efforts to promote our exports to ensure that we can compete effectively in a shrinking global market. I hope that it’s temporary at least for the next 12 to 18 months and then the economy will recover again.”
Ncube said despite the downward risks associated with the recession, Zimbabwe remains on course to meeting the US$7 billion export target by 2023. He said since the launch of the country’s exports strategy, the Zimbabwe has recorded a number of positive achievements towards this target despite having to deal with the devastating effects of the Covid-19 pandemic.
Official figures show that in 2021 exports grew by 37.2% to US$6bn from US$4.93bn in 2020, surpassing the 10% annual growth target. Foreign Affairs minister Frederick Shava also told the same conference that trade negotiations under the African Continental Free Trade Area (AfCFTA) are progressing well.
He said Zimbabwe has submitted its tariff offers under the African Continental Free Trade Agreement and is now awaiting the technical verification by the secretariat. The country’s top diplomat said once verified, Zimbabwe will prepare the necessary legislation to start trading under the agreement.
At the annual IMF/World Bank meetings plenary session held last Friday, World Bank president David Malpass said the World Bank Group and other Bretton Woods institutions should consider their roles and capital structure, and evolve to better address climate change and global public goods.
“A series of harsh events and unprecedented macroeconomic policies are combining to throw development into crisis,” Malpass said in a speech ahead of the meetings at Stanford University. “The human consequence of these overlapping crises is catastrophic.”
Bard Santner Markets Inc chairperson Vinod Bussawah told delegates attending the ZimTrade 2022 Exporters’ Conference that Zimbabwe needs political commitment, time and private public partnerships to transform its economy to become one of the biggest financial centres like Mauritius.
Bussawah is the COO of Mauritius Finance and is also chairperson of Bard Santner Markets Inc. The authorities in Harare have set out an ambitious plan to achieve upper middle-income country status by 2030 but, with no economic and political governance reforms, critics see this as pie in the sky.
Bussawah also said Mauritius has huge opportunities for skilled personnel from Zimbabwe seeking employment in tourism and finance.
Mauritius transformed from being the leading sugar cane producer in the British Empire in the 1860s to an offshore centre anchored by reforms and strong political will.
Zimbabwe experienced a decline from 2019- 20 due to climate change-induced droughts, the outbreak of the Covid-19 pandemic and policy inconsistencies.
The Word Bank says Zimbabwe’s economy grew 5.8% in 2021 and is expected to grow 3.4% this year. The IMF says the economy expanded by 7.2% in 2021.