Government moving away from allocation economy

The Chronicle

Freeman RazembaHarare Bureau 

Zimbabwe is moving away from an allocation economy where every businessperson and individual queued at the Reserve Bank of Zimbabwe (RBZ) to access funds for their businesses, a Cabinet minister has said.

Information, Publicity and Broadcasting Services, Minister Monica Mutsvangwa said in the Second Republic, the private sector should source own foreign currency and not expect support from the RBZ.

She said this while addressing local editors from various stables in Harare yesterday.

“The Second Republic is moving away from an allocation economy where every businessman goes to the RBZ,” she said. “We really have to move away from that.

“If you ask a lot of businesspeople in this country how they raised their capital, they start telling you that I put a proposal to the Governor (of RBZ Dr John Mangudya) and not many of them have visited the cities where monies can be raised. I think we are moving away from that.”

Minister Mutsvangwa said the source of capital in the country was $4 billion when there were trillions out there.  She said Government achieved a lot within a short space of time, with notable progress in infrastructure development, particularly road rehabilitation and expansion. Further, significant investment has been attracted, with many existing companies being revitalised and new firms opened.

Minister Mutsvangwa said under President Mnangagwa’s leadership, the Second Republic was pushing for the attainment Vision 2030 that aims to turn the country into an upper middle income economy. 

“The effort towards attaining this vision was triggered by the adoption and implementation of a two-year Transitional Stabilisation Programme that is underpinned by the mantra “Zimbabwe is Open for Business”, a policy of re-engagement with willing nations in the international community, a drive for investment and putting in place an enabling infrastructure,” she said. 

“As repeatedly pointed out by His Excellency the President, the going is not going to be a walk in the park as there are many national issues that need to be corrected. However, the nation has achieved a lot in the short-term. 

“The country has made notable progress in infrastructure development, including road rehabilitation and expansion. Notable achievement has also been realised in our drive for investment with many companies existing and new (ones) being revitalised and opened.” 

Minister Mutsvangwa said infrastructure development was being enabled by domestic resource mobilisation and mostly from Zinara.

“That shows a lot of work has been done (and) that shows that the Second Republic has closed that hole which was there, because we didn’t know what the Zinara money was being used for, but the President saw that hole and closed it and the money being collected by Zinara is now being used for road infrastructure,” she said.

Minister Mutsvangwa said the Second Republic was implementing reforms across all needy sectors to create an enabling environment for the people and businesses to thrive. 

“Common sense dictates that the benefits of these efforts to turnaround our economy and set our country on a recovery path will not be fully realised in the short and medium-terms,” she said.

“It is against this backdrop that the nation faces challenges in the service areas, one example being the energy sector, which is riddled with shortages of fuel and electricity supplies. 

“We also have an unstable financial sector that has led to price increases and inadequate foreign currency supplies and is affecting the economy in a negative way. We expect the situation to be made even more difficult because the 2018-2019 year was not a good one in terms of agricultural yields. 

“I am advised that an assessment baseline study carried out by the Ministry of Agriculture found out that this season, the main cereal, maize which is our staple, the yields were slightly over half of what we got last year with some areas having nothing at all.” 

Minister Mutsvangwa said 2019 was to a great extent a drought year, with a recently concluded Vulnerability Assessment showing that many families will need food assistance to go through to the next harvest. 

Government is putting in place plans to ensure food security, including working with partners to widen solutions. 

The food situation was compounded by the Cyclone Idai disaster which killed about 350 people, left many others injured and homeless, especially in the eastern parts for the country. 

Deputy Minister of Information, Publicity and Broadcasting Services Energy Mutodi, the ministry’s Permanent Secretary Mr Nick Mangwana and other senior Government officials attended the meeting.