ECONOMISTS have described the recent prophecy by prophet Emmanuel Makandiwa that Zimbabwe’s economy is going to boom as “reassuring”, but said the country needed the right investor policies to influence economic growth and not miracles. VENERANDA LANGA SENIOR REPORTER
Speaking at the United Family International Judgment Night event on Saturday, Makandiwa prophesied a major economic breakthrough for Zimbabwe.
He said Zimbabweans should start preparing for the good times when industry will produce at maximum capacity.
“Industries shall begin to run again. I see production. You shall remember these words,” Makandiwa said.
“You will be able to move around the city and be able to do your shopping even during the night.”
But Confederation of Zimbabwe Industries (CZI) president Charles Msipa said it was going to take more than prayer to revive the country’s comatose economy.
“Those are comforting words that show the desire by Zimbabweans to see industrial revival and I do believe there is hope for industry, but I also believe it will take more than prayer to revive our industry,” said Msipa.
He added: “There are no quick or miracle fixes to our economic situation and Makandiwa’s words are music to my ears. I believe if the private sector, public sector and policy makers were to take concerted action and collaborative measures to turn around the economy, problems bedevilling our industry would be resolved.”
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Msipa said there was a lot of hard work that was needed to be done such as formulating the right policy environment, attracting capital inflows, as well as restoration of agricultural production which used to feed the manufacturing sector with inputs.
“We are deindustrialised because of obsolete plant and machinery, manufacturers lack access to affordable capital and funding and there is lack of finance due to low foreign direct investments since 2009 when we dollarised,” he said.
“Infrastructural deficits and erratic power and water supplies have affected the cost of manufacturing operations.”
The CZI boss said if the country focused on ensuring that all those factors were improved then the prophecy would come true.
MDC-T shadow Industry and Commerce minister Tapiwa Mashakada said while he had no capacity to contest divine pronouncements he believed that the country needed capital inflows, machinery and new technologies to resuscitate its economy.
He said there was urgent need to stop dumping locally cheap goods from China and other countries.
“There is need for protracted policy shifts to ensure industry starts to improve,” said Mashakada. “We need to knock industry down into smaller units and merge the informal sector with bigger industries focused on consumer products, especially food manufacturing. Value addition of agro products will be a good start in view of competition from regional markets.”
He said access to lines of credit was also essential, as well as cutting down on huge labour, electricity and transport costs which resulted in the hike in prices of finished products.
“We need a huge policy shift. President Robert Mugabe said there was need to attract investors, but as long as the indigenisation policy exists there is a living elephant in the room. There are laws which need to be changed to attract investment,” he said.
Independent economist Eric Bloc said there was need to craft laws that promote foreign direct investment to ensure the resuscitation of the economy.
“Certainly prayers can help turn around industry, but we have to help by ensuring that there is money to resuscitate industry,” Bloc said.
“The problem is that there is no money in Zimbabwe to fund industries and so we need foreign direct investments. The Ministry of Finance should look at tax legislation and create export incentives. Despite dealing with the monetary constraints we have to also upgrade Zesa and make electricity supplies reliable so that industry can grow.”
According to a report on trade competitiveness by the Poverty Reduction and Economic Management Unit Africa Region (2014), the manufacturing sector in Zimbabwe had been stagnated well before the crisis of the past decade.
