News Column

Zim's Economic Potential Impressive

June 13, 2014

Eric Bloch



THE majority of Zimbabweans have been economically deprived for at least 18 years and they don't believe there will ever be a meaningful upturn in the Zimbabwean economy and that they will never enjoy respite from poverty.

The reality is that the economy can be dramatically revitalised. Although such transformation can only be achieved over a period of time (at least six years), it is almost certain that in due course, the Zimbabwean economy will be revived to the benefit of its populace.

However, the overriding question is: when will the economic upturn commence? Concurrently, because of the understandable but misplaced doom, gloom and pessimism of most Zimbabweans (including the more than three million who have left the country to seek employment elsewhere), that upturn will however be slower than desired. The sceptics are by now wholly unable to recognise the vast range of assets that Zimbabwe has, which can be extensively developed and exploited.

Among the many resources which Zimbabwe has, some of which are currently partial economic contributants but have the potential to do much better, are:

Approximately 20 million hectares of arable land, of which less than 10% is being productively used.Prior to the turn of the new millennium, Zimbabwe was known as the "breadbasket of the region", exporting considerable quantities of maize, wheat and other grains, cotton, sugar, citrus, beef. The country now has to import considerable quantities to service the nation's basic food needs.

Moreover, apart from the previous proven potential of land, Zimbabwe also has almost two million skilled agricultural workers (most of whom are currently unemployed).

Beneath that wonderful, potentially rich land, Zimbabwe is endowed with a vast amount of wealth. Over the last three years, there has been some significant mining development.

However, if assessed in relation to the magnitude of the wealth that could be created, Zimbabwe is at this stage only scratching the surface.

Intensified exploitation of the huge reserves of gold, diamonds, platinum, coal, chrome, nickel, lithium, methane gas, emeralds and many other minerals, would enhance the economy substantially. That effect would be both direct, by virtue of the wages which would be generated and expended by tens of thousands of Zimbabweans that would be employed, and other operational inputs that would be invested by the mines. In addition, there would be greater revenue flows into the currently bankrupt fiscus.

The extent that Zimbabwe is endowed with diverse and attractive tourism resources is so great that it was recently bestowed the World's Best Tourism Destination Award.

The beauty of Victoria Falls, several of the world's finest wildlife parks and reserves, the magnificent Lake Kariba, Nyanga, Vumba, Chimanimani, the mystic Great Zimbabwe, and the grandeur of the Matopos, are but some of Zimbabwe's remarkable tourist attractions. The tourism industry has, over the last two to three years, been developing and expanding, attracting more visitors to Zimbabwe.

Nevertheless, the extent thereof is still minimal as compared to that which can be realised. As with agriculture and mining, tourism can be a substantial contributor to national economic growth and well-being.

Although the manufacturing sector has shrunk considerably in the last few years, the prospects for its recovery and expansion are bright. Considerable infrastructure still exists although it is highly under-utilised, and there is also considerable scope for enhancement and extension of the infrastructure.

Zimbabwe is geographically located to enable it to be a key supplier to the entire of Southern Africa, servicing needs of at least 428 million people.

Moreover, as agricultural and mining production increases, there will be extensive opportunities for viable value-addition by manufacturers to primary products generated by those two sectors. Zimbabwe can add value to many of its minerals, its good quality cotton and other agricultural products that can be generated by these key sectors.

As with other sectors, considerable additional employment would be created, including thousands of highly-skilled workers rendered jobless in recent years.

Similarly, there would be extensive downstream economic interaction and benefits, beneficiation as a result of enhanced export performance and a contraction on dependency upon imports.

Achieving this transformation, however, requires diverse and dynamic econonomic policies (and constructive implementation of those policies by government).

Recently, in contrast to many years of economic obduracy, government has started pursuing somewhat more effective policies, although not yet sufficiently so, and has been making assurances to investors. What is critical is that it no longer be dilatory in implementing the policies, but that it does so urgently, although not with such undue haste as to render any of the necessary actions destructive. Government must now resolutely seek to revive the economy.

Next week we will address several of the pressing key economic policies and actions which would create the remarkable economy which Zimbabwe can have.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: AllAfrica


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters