Friday, 19 September 2014
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
Saturday, 23 August 2014
Tuesday, 12 August 2014
By Bernard Bwoni
Thursday, 7 August 2014
The Zimbabwe manufacturing sector is emerging from over a decade of a sanctions-induced decline and as such in its infancy. The manufacturing sector in Zimbabwe cannot be expected to compete against the mature industries in the more advanced regional and advanced international economies without an initial period of deliberate government promotion and protection. It is going to take time and more importantly investment in technological capabilities for manufacturing companies in Zimbabwe to absorb advanced technologies. Without this initial period of protection the sector is going to struggle to survive the international competition. The revival of the manufacturing in Zimbabwe requires some level of government protection and subsidies at the initial stages so that we can absorb the technologies and learn to complete in the global market. Zimbabwe is currently coming from a 14 year economic slump and a period of at least 5 years of strategic protection of the country’s manufacturing sector is necessary to give it that stability to be competitive. It is easy to say that the key to industrialisation is competiveness not protectionism but a baby has to learn to crawl before they can walk. Economic literature considers that import restrictions of any kind create an anti-export bias by raising the price of importable goods relative to exportable goods.
Saturday, 2 August 2014
The young people of this country do possess the power and potential to address some of the considerable social, political and economic challenges currently facing Zimbabwe. The key to start unlocking the untapped potential of the young people of Zimbabwe is to start acknowledging them as productive citizens of the country and not putting them down at any level. There is huge potential locked up in the youth of this country and the government has a responsibility to harness this yet-to-be-realised possibility. The young people need to be listened to, offered the necessary support to grow, encourage rather than put them down, praise them when they make progress, reprimand when they make mistakes but not chastises permanently and recognise that everyone deserves the chance to succeed. There is a place for wisdom of the elderly and the energy of youth. Sometimes there is no point in recycling the same old tried and tired seniors at the expense of the hungry and expectant youth.
The young people of Zimbabwe deserve the chance to prove their worth in senior positions. Zimbabweans are the most enterprising, hard-working, creative and innovative sons and daughters of Africa and all they want are systems and services that function. Being young is not a crime but a country-defining prospect. The key is to reconcile the wisdom and knowledge of old age with the strength and fearlessness of youth. It is retrogressive to underestimate the true potential of the young.