Economic recovery efforts on track

04 Nov, 2016 - 00:11 0 Views
Economic recovery efforts on track

The ManicaPost

Kudzanai Gerede Business Correspondent

Zimbabwe’s prospects of resuscitating its economy are fast taking solid shape following positive developments with regards to foreign investment and trade missions that arrived in the country in the past week and discussed various economic areas available for exploration.

This week Harare hosted a strong Chinese business delegation for the investment conference forum and an equally dedicated South African trade delegation headed by President Jacob Zuma for the Bi-National Commission (BNC) which started on Monday morning separately.

The significance of the meetings is not only hinged on the fact that South Africa is the biggest economy in the region while China is second in the world, but is also crucial in connecting the country with potential investors with experience in building resilient economies.

China has already expressed that it has prioritised Zimbabwe in its economic plans, with Dr Fan Hengshan Deputy Secretary General of China’s National Development and Reform Commission (NDRC) who was part of the delegation revealing that Zimbabwe is listed among the top six economies out of the targeted 18 African countries the Asian economic power seeks to invest in and build co-operation.

The Chinese business delegation, which was made up of official from big firms have expressed interest in opportunities lying in mining, agriculture, construction and tourism.

Observers say the visit is part of the legacy of the Chinese Head of State, President Xi Jinping’s two day visit in the country late last year which culminated in various investment mega deals being signed.

Interestingly, the inaugural Bi-National Commission, a trade and investment facilitation forum between Zimbabwe and its biggest trade partner South Africa, which started last Monday in Harare will be able to put to rest the contentious SI 64 question that was brought in place to boost local industry stability in the market.

Industrialists say mutual understanding at a governmental level will lay the foundation for healthier trade relations at all levels of business between the two neighbours.

They further say the talks will give Zimbabwe a fresh start to its re-industrialization process.

Mr Davison Norupiri president of Zimbabwe National Chamber of Commerce recently said that mutual understanding was guaranteed on the SI64 issue because other countries, South Africa included, also put protective measures to cushion their industries by way of formulating protective local procurement policies.

The meetings this week have been complemented by two major milestones the country has garnered in the course of the same period — the International Monetary Fund (IMF) debt clearance a fortnight ago and the signing into law of the Special Economic Zones Bill by President Robert Mugabe on Monday this week.

The IMF debt clearance has brought a sigh of relief to Government whose ability to access international lines of credit have been for over a decade thwarted by its arrears to the institution. Despite still owing the African Development Bank and the World Bank, the IMF debt clearance is likely to improve the country’s credit rating once modalities are in place to seek financial assistance.

Zimbabwe has seen its foreign direct investment flows take a nosedive over the years and the promulgation of the Special Economic Zones should see inward investment flows.

“It’s a well timed consent into law of the Special Economic Zones Bill by the President because it was now long overdue and work has to get started. The timely coincidence with the debt clearance should be able to open new credit lines to help Government set up some of the infrastructure in the SZEs to pave way for investors,” said Mr Pepukai Chivoore, an economist.

“With the ease of doing business reforms churning out positive results for the local business operating environment, the coming in of Special Economic Zones will make Zimbabwe a fertile investment bed in the region,” he added.

All this also comes at a time when the country is set for the introduction of bond notes, which are expected to ease liquidity problems and spur demand on the local market.

Analysts say approximately US$ 6 billion in exports are expected to be realised by the country when the US$ 200 million  worth of bond notes are taken up in  2.5 – 5 percent export incentives to exporters.

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