Economic revival measures pay off

Minister Chinamasa

Minister Chinamasa

Farirai Machivenyika Senior Reporter—
Measures recently adopted by Government to resuscitate the economy have started paying dividends as growth has been witnessed in some key sectors, Finance and Economic Development Minister Patrick Chinamasa said yesterday.He said there were many leaks in Government departments and proposals were being made that they should not retain any money, but channel everything to the Consolidated Revenue Fund.

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Minister Chinamasa said this while responding to concerns raised by legislators and various portfolio committees on the Mid Term Policy Review he presented in July. “The manufacturers of local fertilisers are expected to boost production by between 30 and 44 percent by year-end. This is expected to result in a reduction of prices. I already have a commitment from manufacturers that prices will go down by 20 percent,” he said.

This development, he said, was likely to boost agricultural productivity this farming season, barring adverse rainfall conditions. Minister Chinamasa said a recent visit to Bulawayo had also shown that productivity in the textile sector was on a rebound, picking up remarkably following a ban on second-hand clothing imports.

“A recent visit to Bulawayo showed that production is picking up and some of the manufacturers I was talking to said they were supportive of the measures. They said they were actually importing machinery from collapsed South African companies that were also affected by the importation of second had clothes,” he said.

Minister Chinamasa said the decision to ban the import of second had clothes was one of the most painful decisions he had been forced to make. “It’s one of the painful decisions to make, but you cannot talk of reviving textile industry in Bulawayo and other towns and talk of importing second hand clothes at the same time. You cannot have your cake and eat it at the same time,” he said.

The minister also said he introduced taxes on vegetables and groceries as a way of promoting production and consumption of local goods. The move has seen local cooking oil producers operating at close to 100 percent capacity, while prices of the commodity have significantly gone down. Minister Chinamasa said Government had adopted a number of measures to boost local productivity, including new lines of credit.

“Government has taken a number of steps to assist local the manufacturing industry by facilitating a number of lines of credit with the PTA Bank, Afreximbank and others,” he said. Minister Chinamasa said the RBZ had also intervened to reduce interest rates on loans, while Government was engaging multilateral lenders to reschedule the country’s debt and ensure that the country accessed new lines of cheap finance.

Meanwhile, Minister Chinamasa said he would consider consolidation of Government revenues in one fund in the 2015-16 national budget. This follows concerns that the current scenario where some Government agencies retained money they collected led to leakages. “That is a proposal that we will look at in the 2016 national budget to have all the revenue coming through the Consolidated Revenue Fund,” he said.