Gvt pushes for procesing of commodities
BERNARD MPOFU
Government will push for the processing of primary commodities to offset softening prices on the global market, Finance minister Mthuli Ncube told investors in Switzerland.
Zimbabwe is faced with foreign currency and cash shortages, an unsustainable budget deficit, infrastructure deficiencies and difficulties re-engaging with international lenders and investors following the resignation of former president Robert Mugabe last November.
According to the World Bank latest commodity outlook report, prices for agricultural commodities, including food commodities and raw materials, are anticipated to decline marginally in 2018 amid ample supply and trade tensions before rising 1,6 percent in 2019.
Global growth is projected at 3,9 percent for both 2018 and 2019 from 3,8 percent in 2017, driven by both industrialised and emerging economies. Experts say the partial recovery in commodity prices should allow conditions in commodity exporters to gradually improve.
Ncube told investors on the sidelines of the World Investment Forum in Geneva that while government forecasts a 4,5 percent Gross Domestic Product growth in 2018, strong growth in the tourism sector, agriculture and services sector could drive growth to 6 percent.
The UNCTAD World Investment Forum which was held from October 22 to 26 is the pre-eminent global platform for investment and development. The Forum devises strategies and solutions for global investment and development challenges.
It facilitates multi-stakeholder collective action to stimulate investment in development. Already government has rebased the economy by 40 percent bringing the GDP size to $25 billion.
“Our strategy for the economic diversification hinges on beneficiation for the start while prices may be soft or moving side wings,” lets maximize on the value of the commodity,” Ncube said in a transcript seen by Business Times.
“If you look at the coal sector, we are working on transforming it to fuel. So its really working on beneficiation regardless of where the prices are. But looking at these sectors as well as the whole economy, Zimbabwe is already a diversified economy.”
Official figures show that during the first half of 2018, merchandise exports stood at $2,2 billion, a 15,1 percent, increase from $1,9 billion realised over the corresponding period in 2017.
The increase was underpinned by growth in gold, platinum, chrome and tobacco exports, on the back of favourable prices and increased production from these major commodities.
Imports for the period January to June 2018 amounted to $3.4 billion, a 28.3 percent increase from $2.7 billion realised over the comparative period in 2017.
