The Chief Executive Officer, Christopher Magaga, told a national pre-budget consultative meeting on Friday that almost every sector of the economy was under-performing. His call comes as Finance minister Patrick Chinamasa is making frantic efforts to re- engage the Bretton Woods institutions for an economic bail-out package.
Chinamasa has been working hard to get Zimbabwe back into the good graces of the International Monetary Fund (IMF) in a desperate bid to secure debt relief. But some in the ruling party, such as war veterans minister Chris Mutsvangwa and youths minister Patrick Zhuwao are throwing spanners into the works.
â€œWe need FDI in the 2016 fiscal policy statement,â€ said Magaga, adding that there is need for value addition and beneficiation of resources to lure foreigners with machinery to invest in the country.
â€œWe are exporting primary products such as unprocessed platinum, diamonds and tobacco. Lack of value addition is contributing to poor exports, he said. Tobacco sales fell by nearly 25 percent to $2,6 million as of June 29 this year compared to same period in 2014. He attributed this to depressed market prices in the domestic market.
Zimbabwe earns at least 80 percent of its export revenue from China, South Africa, Indonesia, Russia and Belgium, which contribute 62%, 7.2%, 4, 8%, 3.35% and 3, 2% respectively.
Mugaga also underscored the need for the Zimbabwe Revenue Authority to review its penalties on companies which are failing to remit their taxes in time, saying poor performance of the economy was `eating away` profits.
â€œThe profit margin in this environment is very small and in most cases the taxes are paid from the profits. What this means is that taxes are eroding the profit base as well as capital base.
â€œIt defies the whole purpose of retooling because our industry needs to retool with state of the art equipment but the behaviour of the tax collector is not in sync with the objectives of revamping the economy. ZIMRA must reduce the duty on all imported machinery,â€ said Magaga.
Other business players who attended the meeting bemoaned corruption by government officials saying those in positions of authority must do something to arrest the situation.Post published in: Business Analysis