The Government, through Reserve Bank of Zimbabwe, has secured $500 million worth of external lines of credit to support foreign currency needs of businesses and individuals with disbursements expected to start this week in an effort to provide funding support to key sectors of the economy.
President Mnangagwa announced this as he also reaffirmed the use of the multi-currency system as his administration moves to stabilise the economy.
Officially opening the First Session of the Ninth Parliament of Zimbabwe incorporating the State of the Nation Address (SONA) on Tuesday, following his election victory on July 30 this year, the president said the Government would redouble its efforts towards stabilising the volatile macroeconomic environment.
Measures for economic reforms
President Mnangagwa said the Ninth Parliament of Zimbabwe must give greater impetus to the nation’s ambitions and economic agenda and that a cross section of proposed Bills, including Companies and Other Entities Bill, Mines and Minerals Amendment Bill, Gold and Precious Stones Bill and Zimbabwe Investment and Development Bill will be debated and passed by the legislature. This, the President said, will be done through measures to enhance foreign currency availability, improve liquidity, enhance Zimbabwe’s investment attractiveness, instituting currency reforms, reducing national budget deficit and ensuring gradual growth of all sectors of the economy.
The ultimate goal, President Mnangagwa said, was to restore macro-economic order, create jobs, end corruption, improve social service delivery, provide requisite modern and efficient infrastructure, clean water, sanitation, good education, health care and sustainable environmental practices.
Multi-currency to anchor economy
In what should further calm markets on fears over plans about currency reforms, the President said the US dollar will anchor the economic reform process and that Government had already secured foreign lines of credit to ease foreign currency shortages, as it continues with the process of building a solid economic foundation and conditions to support future reintroduction of local currency.
“My Government shall, however, continue with the use of the multi-currency system up until the current negative economic fundamentals have been addressed to give credence to the introduction of the local currency.
“The economic fundamentals that need to be met are sustainable fiscal position, foreign currency reserves of between three to six months import cover and sustainable consumer and business confidence. These economic fundamentals are yet to be met in order to justify the introduction of our own currency,” the President said.
President Mnangagwa said Government, through the Reserve Bank of Zimbabwe, had successfully negotiated foreign lines of credit amounting to half a billion United States dollars to meet the growing demand for foreign currency by businesses and the public, adding that some of the funding will be disbursed this week.
“In order to bring sanity in the foreign currency market, my Government through the Reserve Bank of Zimbabwe, has negotiated a number of foreign exchange facilities amounting to $500 million that are intended meet the growing demand for foreign currency by businesses and individuals in general.
“Some of these facilities shall be disbursed this week to meet the expanding demand for foreign currency that continues to be sustained by fiscal imbalances, which my Government has made a great commitment to redress,” he said.
The President said that the foreign funding facilities will also seek to address growing demand that continues to be sustained by gaping fiscal imbalances, which the New Dispensation has made unwavering commitment to resolve.
E D demands high work ethic
“Furthermore, my Government will with renewed urgency and vigour continue to drive a high performance culture within all public entities. All public servants are henceforth required to change their work ethics to ensure efficient and prudent use of public resources, responsiveness, accountability as well as timely, impartial and equitable delivery of goods and services to our people.
“The lethargic and non-implementation of Government policies, projects and programmes will not be acceptable. Our bureaucrats must be committed to deliver. We will vehemently fight bureaucratic bottlenecks and red tape,” he said.
In the same vein, the President said State enterprises had an obligation to operate profitably and should not continue to be a burden to the fiscus.
“We will therefore be implementing the Cabinet decision to streamline some of our public entities to bring about greater focus, coherence, efficiency, effectiveness, and easy and (lower) cost of doing business and better service delivery.”
Reforms must be real
President Mnangagwa said creation of a more competitive and business friendly economic environment must be given greater priority by all relevant institutions.
“We will not pay lip-service to this matter; (economic) reforms must be real,” he said.
On the other hand, the President implored businesses to be honest, ethical and honourable in their business dealings. He said agriculture remained a key sector of the domestic economy in the resuscitation and growth of the economy.
Going forward, the restructured Ministry of Agriculture, Water, Climate and Rural Resettlement will have an accelerated, more co-ordinated and composite approach to the modernisation and mechanisation of “our agriculture sector,” President Mnangagwa asserted.
Govt says agric must perform
To ensure maximum land utilisation for increased productivity, the President said there was need for strategic and concise planning, development and optimal use of Zimbabwe’s water bodies across the country. As such, he pledged Government support, increased investment and co-operation to achieve set objectives.
Further, the President said Government will put emphasis on production of maize, wheat and cotton and that in line with Zimbabwe’s industrialisation agenda, revival and development of vibrant agro-industrial firms along value chains such as cereals fruits and vegetables, cotton, meat and dairy products will be prioritised.
He said attention will be given to resolving foreign currency challenges in the manufacturing sector through increased disbursements while efforts will be increased on driving value addition and beneficiation to penetrate regional, continental and global value chains and markets.
The President said mining remained a key component of Zimbabwe’s economic recovery programme and the production performance of gold, platinum and chrome sub-sectors was encouraging. As such, he said Government will facilitate further revival of the sector and broaden the range of minerals the country can exploit.