Wider exports base a necessity
ZIMBABWE still has an unsustainable balance of payment profile and to address the challenge, the nation needs, as a matter of urgency, to widen its exports base.
This will go a long way in addressing the liquidity crisis which has been haunting the country for more than five years.
The issue of export concentration should be worrying Finance minister Mthuli Ncube. It must be a Spanish Ulcer of his.
There is need to grow a diversified exports base in terms of products and markets is one of Ncube’s major priorities.
But what is worrying is that there appears be a lukewarm approach to export business. Businesses must have a relook at their models in a bid to grow the export base.
Currently, the country is importing more than what it is exporting mainly to South Africa, Belgium, Botswana, China, Germany and Israel — the nation’s top export destinations.
There is no shadow of doubt that growing exports would go a long way in addressing the liquidity conditions obtaining in the country.
Apart from that, the growth of the export base would be instrumental to build national reserve cover to steer the economy back on the recovery course.
Be that as it may, there is need for the government to create a conducive environment for businesses to thrive in order for them to export and grow the export base.
The unsustainable cost structure of doing business in the country, policy inconsistency, power outages, among other structural challenges affecting local industries, remain the inhibiting factors for Treasury’s dream to grow the export base.
It appears the government is expecting eggs from a diseased flock of hens.
No matter how the government comes out to assure industry of its commitment to promoting policy consistency, clarity and predictability without backing such pronouncements with real tangible action on the ground, growing the export base remains as imaginary as the line of equator.
As such, the government has to move with haste to simplify or rather clarify a number of business policies.
Undoubtedly, this would go a long way to restore confidence in the country, minimise bottlenecks that are stalling productive entrepreneurship and ultimately raise the country’s competitiveness.