Economic bright sparks outshine drought impact

Oliver Kazunga-Senior Business Reporter

ZIMBABWE recorded some significant economic milestones this year, underpinned by the National Development Strategy 1 (NDS1) initiatives, despite the El Niño-induced drough.

The Government remains focused on efforts to achieve upper middle-income society status by 2030, anchored in NDS1, a five-year economic development programme, targets.

Under NDS1, Zimbabwe identified 14 key priority areas that include economic growth and stability; health, food and nutrition security; human capital development; environmental protection; social protection and devolution; international engagement and re-engagement; and the digital economy.

Since its launch, the Government has made significant strides in the implementation of the NDS1 and, according to the mid-term concept note released in 2023, most of the projections have been met across all the 14 thematic priority areas.

Despite Zimbabwe being afflicted by a host of internal and external factors such as the El Niño-induced drought, the country continues to soldier on in its quest to attain the envisioned upper middle-income society, anchored by key sectors such as agriculture, mining and infrastructural development.

In an interview, Zimbabwe Commercial Farmers Union (ZCFU) president Dr Shadreck Makombe said the country’s agriculture sector this year continued to make significant milestones.

Against this background, despite the drought the country experienced this year, Zimbabwe is on track to achieve the US$13,75 billion agriculture industry by next year.

“The US$13,75 billion in the agriculture industry by 2025 is achievable, especially given that the Government has joined hands with the private sector towards that target. A significant milestone of note in the agriculture sector this year is the self-sufficiency the country has achieved in the production of cereals like wheat, as well as tobacco,” he said.

“So, I don’t see any reason why, with good policy and strategies, that momentum fails to be sustained going forward. Zimbabwe is geared for a really good and promising agricultural future.”

As a result of the Government’s deliberate policies to transform the agriculture sector and achieve self-sufficiency, this year’s winter wheat output reached a record high of 563 961 tonnes against a national requirement of 360 000 tonnes annually.

This year’s wheat was achieved from 119 594 hectares (ha) that were planted compared to 91 000ha last year from which 467 905 tonnes were achieved.

Despite the adverse effects of the drought, the country this year produced 236 million kilogrammes of tobacco, Zimbabwe’s major foreign currency earner after gold, primarily cultivated by small-scale farmers who were allocated farms under the Land Reform Programme which the Government embarked on in 2000.

Last year, smallholder farmers, who contribute 60 percent of the beneficiaries of the Land Reform Programme, delivered 80 percent of the record tobacco crop of 294 million kg Zimbabwe produced.

As enunciated in the Tobacco Value Chain Transformation Plan approved by the Government in 2021, what is targeted is an annual yield of 300 million kg by next year.

Under the Tobacco Value Chain Transformation Plan, the Government is also aiming to improve the golden leaf’s value to US$5 billion and an additional US$10 billion by 2030.

The plan also seeks to raise localisation of tobacco funding to 70 percent, improve the level of value addition and boost cigarette production to 30 percent from two percent.

Dr Makombe said the recent launch of the new Land Tenure Implementation Programme to unlock the potential of land tenure security was a significant milestone for the country’s agriculture sector as this would unlock huge funding opportunities for the farmers.

“The issue of unlocking value in terms of title deeds is also a move in the right direction if it is done well because farmers will now have access in terms of collateral security.

“They can now take their title to get monies for machinery, implements, retooling and inputs because the title deeds are now bankable in the form of collateral security and, thus, unlocking value and having title as a form of ownership,” he said.

Previously, concerns have been raised over the bankability of 99-year leases, which had been primed as the panacea for farmers, including those who got farms under the Land Reform Programme to access the much-needed credit from banks.

The Reserve Bank of Zimbabwe, in April this year, introduced Zimbabwe Gold (ZiG) as a structured currency backed by the United States dollar, gold reserves and other precious minerals as part of a broader scope to address exchange rate volatility, curtail inflation and restore macro-economic stability.

However, some individuals, through parallel market activities, have of late been manipulating ZiG to destabilise the economy. Financial markets analyst Mr George Nhepera said, had it not been for the introduction of ZiG, the economy could have been far much worse.

“The business operating environment could have been far much worse and unimaginable if the Government had not taken a bold decision to introduce the new currency, ZiG, effective April 5, 2024.

“Prior to this period, the country was going through the ‘twin evils’ of hyperinflation and exchange rate instability.

“It should be commendable that after the new currency was introduced, the economy experienced relative stability for more than seven months and gave a signal to improved economic growth,” he said.

Zimbabwe achieved remarkable strides in the iron and steel industry this year as the US$1,5 billion Dinson Iron and Steel Company commenced first production in July, starting with pig iron, with steel billets set to be produced from April next year.

The steel plant, which reached 60 percent capacity utilisation in October this year, is targeting to ramp up production to 75 percent of plant capacity by the second quarter of 2025.

Zimbabwe Institute of Foundries chief operating officer Mr Dosman Mangisi said one of the major milestones for Zimbabwe in 2024 was the commencement of production at the Dinson steelworks project in Manhize near Mvuma.

“. . . to see it (Dinson) kicking off with uninterrupted processes from pig iron production to steel billets, that alone is a very strong foundation for the foundry sector or casting and metal sector.

“Local foundries are warming up to the availability of raw materials following the commencement of operations at
Dinson.

“We have also seen the Government continuing with infrastructure development projects like the upgrading of roads across the country to help with the ease of doing business,” he said.

Among other infrastructural development projects, the Government has this year made significant progress towards the construction of the US$88 million Mbudzi Interchange in Harare, which is now over 85 percent complete.

Recently, President Mnangagwa commissioned the Shurugwi-Mhandamabwe road project in the Midlands province, a significant milestone towards the attainment of Vision 2030, with the President having declared that “no one and no place will be left behind”.