Kudzanai Gerede Business Correspondent
MOVES by the Government to grow the economy are finally paying off following a revised growth projection from 1,7 percent initially set to 3,7 percent currently envisioned on account of a more than anticipated oncoming harvest thanks to the restructuring of the country’s agriculture sector.
But some analysts are being cautious of exceeding initial expectations citing under performance in various other sectors which complement overall growth performance as a major obstacle to achieving the 3,7 growth projection.
The tourism sector which has been fairly performing in recent years is facing massive challenges chief among them being declining occupancy rates and waning tourist spending due to the usage of a strong currency and the statistics last availed by Zimbabwe Tourism Authority reflected low international arrivals from elite tourism spending markets.
In his 2017 National Budget statement, Finance and Economic Planning Minister, Cde Patrick Chinamasa projected a 1,5 percent economic growth rate having considered various interventions by Government to prop up agricultural production such as the special maize production scheme dubbed Command Agriculture but a closer look at the state of affairs across the country’s major agricultural belts shows that yields will surpass initial expectations.
Minister Chinamasa recently said the economy would grow by 3,7 percent, a similar projection to that of the World Bank’s outlook for 2017 having seen the fruition of Government special maize production scheme.
“We have never spent as much money on agriculture as we have this season. I am pleased with the blessings of the Almighty who gave us abundant rains; we are anticipating growth in agriculture.
In fact we are revising growth in agriculture and in turn in overall growth. I anticipate after the revision our growth to be around 3,7 percent from 1,7 percent or so we had anticipated in the 2017 National Budget,” he said.
Last year the finance ministry twice revised downwards growth prospects closing the year at 0.5 percent following catastrophic effects of the drought that besieged the agriculture sector, ultimately crippling various agriculture value chains which make the nucleus of the country’s agro-based-economy.
However, in 2017, analysts are buoyant of the production so far with the Minister of Agriculture, Irrigation and Mechanisation stating that already key grains of maize, sorghum and finger millet are in good condition and awaiting harvest in a few weeks.
“This is definitely one of the success stories to tell in the entire formulation and implementation of Government policies to date and justifies why the minister has revised growth projection in the agricultural sector and to a greater extent it has a significant bearing on the overall performance of the entire economy,” said Mr Pepukai Chivore, an economist.
The country expects about 3 million tonnes of maize this year and other sub sectors like tobacco and sorghum have done well to augment production output.
However, some observers say the quantity of anticipated yields on the fields do not account to actual yields and returns realised by the end of the harvesting and post marketing seasons as there is a lot that needs to be done in terms of achieving the projected figures.
Mr Chivore warned that the revision of the growth targets maybe prematurely done as there are still a host of grey areas such as poor handling and storage of commodities and the continuous downpour experienced across the country that threaten the ultimate output to the market and the growth of the sector.
“Rains are good and we expect a bumper harvest but let us not discount loses that may result from the incessant rains.
Zimbabwe has a poor record of post-harvest management and most of GMB silos are in need of renovations. The tobacco selling season is about to begin and we don’t have any indication of the prices,” he stressed.
The GMB currently has five of its 12 silos across the country functioning with little less than a month before harvesting begins.
Observers who spoke to Post Business also said the 3,7 per cent projection is likely to be supported by several other key sectors like mining and manufacturing which have seen steady improvements during the past year although still facing a myriad of challenges to provide sound buffer to economic progression.
Capacity utilisation for the manufacturing sector increased 13 points to 47 per cent in 2016 while that of mining took a marginal increase despite challenges of competitiveness, capital shortages and viability.
The mining sector remains critical to the attainment of economic growth and analysts are cautious of high expectations hinting that commodity prices remain depressed despite a slight improvement in recent months.
Weaker prices are however expected to be mitigated by improved output projection particularly in the gold and chrome sub-sectors which have improved performance.
Government recently nationalised chrome claims in a bid to open up for new players and fresh capital injection following under performance of ZIMALLOYS and ZIMASCO which held 80 per cent of total chrome claims in the country.
Confederation of Zimbabwe Industries (CZI) president Mr Busisa Moyo is buoyant of growth of the manufacturing sector and contribution to the national economy in 2017 due to the progress in the agriculture sector which is intertwined to most local industry.
“Good performance of soya beans, wheat and maize is bound to promote growth of local value chains systems across industry,” he said.
“Manufacturing sector capacity utilisation will increase and with a better agricultural season, the agro-processing sector will have less complication with supply of inputs,” he added.
The country however still needs to complete the ease of doing business reforms and instil various other interventions to promote competitiveness and investment promotion to improve industry constraints such as low capital injection and weak aggregate demand currently prevailing in the economy.