The Confederation of Zimbabwe Industries (CZI) has put forward a five-point resolution to help prop up the national economy and drive the re-industrialisation agenda.
In key resolutions passed at its annual congress in Bulawayo last week, the CZI noted the economy was going through teething challenges after an extended period of low inflation and macro-economic instability.
Accelerated money supply growth, unsustainable fiscal deficit and a constant trade deficit, have resulted in significant financial sector imbalances resulting in forex and cash shortages.
This is threatening recovery prospects while a growing parallel currency market continues to impede growth. Also retarding growth prospects are high fees charged by various regulators seemingly not to be aligned to improving ease of doing business.
According to the CZI, this has a direct bearing on competitiveness of local industry and the challenges require determined commitment and co-operation from stakeholders as they pose “immediate serious” threats to business viability and the Government’s vision of a middle-income economy by 2030.
Call for improved relations
Reading out the resolutions to the delegates who attended the conference, Sifelani Jabangwe, the CZI president said the lobby group resolved to closely work with the Government and various stakeholders to tackle problems facing the industry.
Taking a cue from former Botswana president Ian Khama, who was among the guests, Jabangwe said Zimbabwe’s reform agenda should be anchored on a culture of governance, strong checks and balances, independent central bank and private sector led growth.
Jabangwe said the CZI would lobby Government to involve the industry and the private sector in policy formulation.
The CZI proposed setting up of a higher level consultative council comprising the private sector and ministries, which would do quarterly review meetings on issues affecting economy.
In addition, the CZI would lobby for the creation of a by – annual platform chaired by the President to facilitate national dialogue on economic policy issues.
“CZI calls for all parties and stake holders to come together and build Zimbabwe,” he told delegates.
The CZI also proposed to work with stakeholders to develop an implementation framework of industrialisation strategy and lobby for more incentives to promote growth.
Fiscal and monetary reforms
CZI resolved the need for the government to implement fiscal and currency reforms to address macroeconomic fundamentals. The Reserve Bank has already put in place some currency reforms after directing banks to create separate foreign currency accounts for nostro and real time gross settlement accounts to preserve value for foreign currency earners and to boost market confidence.
The central bank expect the measure to strengthen the multi-currency system, price stability and to increase forex inflows, while buttressing Government’s economic reforms.
At the congress, economic consultant Ashok Chakravati, proposed the peg between the bond note and the US dollar be removed and allow it to trade in multi-currency system.
This was an important step towards re-introducing local currency. He also proposed new FCAs to be created where the real forex can be deposited and withdrawn freely.
The private sector needed to be innovative in developing instruments to raise funds.
“As we seek to tap into the currency that is unavailable . . . as we all know we have been talking about the positions around the 99-year leases, we are also saying there are opportunities to also work around to make sure production and productivity happens.”
The CZI would lobby for a facility accessible collateral free by firms requiring loans below $2 million as well as improvement in 99-year-leases to make them bankable.