HARARE – The Confederation of Zimbabwe Industries (CZI) says it is engaging the government to come up with long-term solutions to present economic challenges.
“The economy remains very delicate when my term started last year. We had hoped that by now we would be somewhere in terms of growing capacity utilisation, but the current indications point to the need for long-term solutions,” CZI president Busisa Moyo told journalists on the sidelines of the association’s Annual General Meeting yesterday.
The CZI president, who is also United Refineries chief executive, said the manufacturing sector had been severely hit by the economic headwinds as numerous operators closed shop in the first quarter.
“As industry, we are very worried. Confidence is low on the back of various announcements that have been made in recent months which have affected consumer spending,” he said.
Moyo said the industry mother body was also assisting the government to craft long-term sustainable solutions in line with advice from the International Monetary Fund (IMF).
The multilateral lender said the country urgently requires bold economic reforms that include clarity on the indigenisation policy, reducing corruption and containing the public sector wage bill to reverse the worsening economic situation characterised by low exports and a widening current account deficit, among other challenges.
“Zimbabwe’s economic difficulties have deepened.Drought, erratic rains, and increasing temperatures, have reduced agricultural output and disrupted hydropower production and water supplies.
“Economic activity is severely constrained by tight liquidity conditions resulting from limited external inflows and lower commodity prices,” the IMF says in its latest report on Zimbabwe.
“A profound economic transformation programme is needed to reverse this adverse trend and unleash the country’s potential.
“Policies need to address the underlying impediments to growth as soon as possible, and redirect the economy towards private sector-led growth.
“The lack of external financial support cannot be a reason for inaction.
“To the contrary, an ambitious, comprehensive, and front-loaded economic reform programme is essential for Zimbabwe to regain access to financing from both multilateral and bilateral creditors. Without such financing, reform efforts will not be successful.
According to the IMF Staff Report for the 2016 Article IV Consultation and the third review of the Staff-Monitored Programme on Zimbabwe, government should lower the public sector wage bill, clarify the controversial indigenisation policy and ensure that growth is led by the private sector.
The report says if Zimbabwe was to catch-up with its regional peers, the government also needed to address the debt overhang, normalise relationship with the international community and speedily implement bold policies and reforms to tackle the country’s structural impediments as well as facilitate sustainable long-term growth.