Friday, 24 October 2014
Monday, 20 October 2014
Thursday, 9 October 2014
Monday, 29 September 2014
Politics is a complex case of harnessing the
interest of the electorate and conceding that there will always be an element
of indifference from some quarters. There are two sides to the political
spectrum in Zimbabwe, the ruling party and the opposition and that is also worldwide
in most cases. The ruling party is built on a backdrop of a protracted
liberation struggle and the conservative principles are entrenched within these
defining foundations. The opposition in the country is mostly ‘moderate’ and
that is understandable and expected. The opposition politics in Zimbabwe was
founded and funded on ‘moderate’ neoliberal principles and they make no secret
of where their loyalties lie. The question
to pose is where do moderates fit in within the revolutionary ranks?
Wednesday, 24 September 2014
The stock market in any country is a strong determinant of the economy’s direction with a strong stock market pointing to earning estimates that are on the up and thus indicating that the overall economy is getting ready to grow. Similarly a down market may point to declining firm earnings and major issues with the overall economy. Indices on the Zimbabwe Stock Exchange (ZSE) have continued to increase with market capitalisation also continuing to maintain growth since the beginning of 2014. The mining index has continued with impressive performance from June 2014 to date. The manufacturing index has not performed as impressively as the mining.
Sunday, 14 September 2014
Zimbabwe just like other developing countries find herself in a very difficult position with the IMF and World Bank putting pressure on the country to scrap tariffs and subsidies as part of the free trade rules. In contrast, EU farmers are guaranteed a price for their produce at prices almost three times higher than world prices and there are stringent restrictions on foreign imports into the EU backed up by very high tariffs on imports. Export subsidies allow surplus EU produce to be dumped at bargain prices in developing countries. The EU Common Agricultural Policy uses quotas and very high tariffs to effectively block the importation of foreign food stuffs. It is interesting to note that the EU tariffs vary and rise in proportion to how processed the product is. Partially processed products face an average of 20% higher tariffs than raw resources and finished products face almost 50% higher tariffs (FAO, 2013). To put it simply, developing countries can export the sugar cane but not the sugar made from the sugar cane.
During the period five years before the FTLRP maize production shows a compound annual growth rate decline of 8.16% and also a decrease of 4.37% during the FTLRP from 2000-2004 and this can be attributed to the droughts of the 1990s and 2002 and 2004/5 respectively, the impact of the economic embargo against Zimbabwe which meant government had limited capacity to provide funding for the new farmers. However the period post the FTLRP from 2005-2010 the compound annual growth rate of maize increased by 4.51% and the trend has continued to show positive growth. Improvement is yield per hectare is an important factor in the increase of production of maize. In Zimbabwe the period five years before the FTLRP showed an 8.74% decline in maize yield, a 5.37% decrease during and interestingly an 8.75% compound annual growth rate the period five years after the FTLRP from 2005-2010. The decline in area planted for maize is attributed to depressed maize prices during that period and newly resettled farmers switching to more lucrative cash crops such as tobacco and cotton. The prices of maize in Zimbabwe increased by 12%, 10% and 4% in 2002, 2003 and 2004 respectively. The factors that affected maize prices during those periods were mainly consumer preferences, drought, and government policy and decreased output. In 2010 the landed price of maize from neighbouring South Africa was US$219/tonne and local farmers in Zimbabwe could only produce at a profit if they sold their maize produce at US$265/tonne. Thus it made sense to import maize than grow owing to the depressed prices. The maize prices have remained less than competitive and many resettled farmers have indicated that growing maize is not economically viable.
Thursday, 4 September 2014
It is imperative that formal studies are carried out to gauge the actual size of the Zimbabwe informal economy and GDP in nominal terms. If you look at trade in the country it happens mostly informally at flea-markets, market traders, in homes, flourishing greenhouses, the chicken rearing in the back gardens, fish-farming in the backyards you name it and these are the figures that are not reflected in the national GDP and national economy. The country currently has a negative trade balance as a whole with more imports than exports as Minister Chinamasa recently lamented. But a closer look would reveal that informally the exports that are happening on a cash basis are also not reflected in national trade figures. All that money is not filtering into the formal banking systems and hence the distorted trade balance figures.
The solution is to carry out that study to find out the exact figures of the informal economy, getting the self-employed to incorporate their activities, registration and means of follow up and action plans. A huge task and ask but it is something that needs to be done. Incorporating the informal sector figures Zimbabwe’s GDP would more than double. This is not to suggest that this is the panacea to all the country’s economic challenges but the informal sector is a major source of revenue that the country is missing out on. The big question is how much is the informal economy worth in Zimbabwe? If we are saying over 60% of the economy is informal, a tax revenue base not realised by government what would be the country’s GDP if the revenue from the informal sector is harnessed? As always these are merely questions being posed and not meant in any way to undermine and antagonise.
Monday, 25 August 2014