Policy consistency, key to Zimbabwe economic growth

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The Zimbabwe government should consistently implement its policies to rebuild investor confidence both within and outside the country, Oxlink Capital director Brains Muchemwa has said.

By Tarisai Mandizha
Business Reporter

Addressing lawmakers attending a post-budget seminar in the country’s capital city of Harare recently, Muchemwa said investors need predictable policies in critical sectors such as the capital intensity mining sector.

He cited government indecision in dealing with a 2010 ban on exporting chrome ore which has been temporarily lifted along the years before being restored again.
“What is our policy with regards, for example, chrome mining. Exports of raw chrome have been banned and the ban was lifted, but now the ban has been re-imposed and one would not know if they can sink their money into chrome mining. This affects not only investment, but also productivity,” Muchemwa said.

He added that although the policy is critical in promoting value addition in the mining sector, the measure should stimulate business activity.

He, however, said government should fully implement policy measures for the diamond sector which promote transparency as well as boosting remittances to Treasury.
“Members of Parliament (MPs) should ensure most measures outlined in the budget are implemented so that we benefit from an increase in productivity and marketing of diamonds,” he said.

Muchemwa said there are good policies in Zimbabwe, but whether they are going to increase industrial productivity was questionable because the major challenge by industry was access to working capital.

Capacity utilisation in manufacturing has over the last two years been declining due to a myriad of problems, including underfunding and lack of competitiveness.

Turning to the banking sector, Muchemwa said deposits were growing at a slow pace and the ability of banks to continue lending was a challenge due to the underperformance of the economy and low confidence in the banking sector.

He said the 2014 national budget, which was presented last month, came at a time when most banking institutions were grappling with non-performing loans.

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