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‘2016: More of the same’

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THIS year is not going to be different from the previous two years as the economic fundamentals have not changed, observers have noted.

BUSINESS REPORTER

The country has a debt overhang of $8,3 billion and seeks to pay multilateral creditors arrears of $1,8 billion by June this year.

Busisa-Moyo

The arrears clearance strategy is one of the major highlights for 2016 economically, as it will unlock funding and help the country start to access credit from international financial institutions.

Finance minister Patrick Chinamasa in his National Budget presentation for 2016 said the external payment of arrears was expected to disseminate positive signals to investors and lenders.

The economy is expected to grow by 2,7% this year due to the performance of mining, tourism, construction and the financial sector. Exports are expected to grow to $3,7 billion this year due to the improvements in the agriculture and mining sectors. Imports would be $6,2 billion in 2016, down from $6,3 billion in 2015.

Deflationary pressures are expected to persist this year and that means more products and services will continue on the downward trend. Broad money supply is expected to increase by 6,7% to $5 billion in 2016.

The agricultural projections of 1,8% growth might be difficult to attain given the dry spell that has hit the country this year.

Local economist, John Robertson said the year would be depressing and there would not be any job creation, therefore, government and the private sector would have to reduce prices so that the country could be competitive.

“Government should reduce costs for Zimbabwe to become competitive because it’s now cheaper to import,” he said.

Robertson said the country had to return many farmers to agriculture and this had to start now in preparation for 2017 farming season.

Confederation of Zimbabwe Industries president, Busisa Moyo said capacity utilisation levels in the manufacturing sector were expected to grow by at least 10% this year if government and private sector agreements, including clarification of the indigenisation policy are implemented.

This means by year end capacity utilisation would be at around 45%. In 2015 capacity utilisation stood at 34, 4%.

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