Chinamasa pushes ahead with indigenisation

Finance minister, Patrick Chinamasa has said there will be no amendment to the indigenisation policy saying no company will be exempted from the law.


Presenting the country's budget today, Chinamasa said the country’s economy is expected to record strong growth of about 6,1 percent based on the Zanu (PF)’ s economic blueprint, Zimbabwe Agenda for Sustainable Socio Economic Transformation.

He said the projected economic growth is premised on the strong recovery of the agriculture and improved performance of the mining and construction sectors.

Said Chinamasa: “We have done what we have not done in all the other years where we have given farmers inputs.

“In 2014, agriculture is projected to grow by 9 percent, mainly driven by growth in maize (62,8 percent), cotton (27,8 percent), soya beans (26,7 percent), and groundnuts (56,8 percent) among other crops,” he said.

Chinamasa attributed the growth in the agriculture sector to the improved state of preparedness by farmers and government, sustainable planned financial arrangements and inputs availability among others.

“About 1, 65 million hectares will be utilised for maize during the 2013/ 14 season, with a projected output of 1,3 million tons,” said Chinamasa.

“This will be underpinned by the forecast normal rainfall season and availability of funding from both government and the private sector which should translate into improved yields,” he said, adding that this will also see an improvement in livestock production.

Chinamasa said the current liquidity crunch was a result of the high import bill.

“People are keeping money under their mattresses,” he said, adding that there is need for accountability and transparency in the extractive sector.

“The 2013 output target for diamonds was revised downwards from 12.5 million carats, to 11 million carats because of the transition from alluvial diamond mining to the extraction of conglomerates,” he said.

Chinamasa dispelled fears of the return of the local currency hinting that government would soon introduce the use of other currencies.

Said Chinamasa on indigenisation: “There will be no amendment to dilute the indigenisation law.”

He said some of the major threats to the country’s economy include budget pressure, poor rainfall, slow progress in implementing some of the country’s policies and lack of foreign direct investment among others.

“Financial sector vulnerabilities due to weak governance, low interbank market activity, high non-performing loans, low capitalisation and poor asset quality in several banks; and infrastructure deficits, in the transport, energy and water sectors results in high cost of doing business,” he said.

“We are lagging behind because we are using obsolute equipment, outdated technology while the dumping and smuggling:of outdated equipment is further imposing an unfair playing field for locals with external competitors;”

He said employment costs gobbled close to 70 percent of the country’s total revenue.

“For the period to November 2013, employment costs amounted to $2.429 billion accounting for 68.9 percent of total expenditure, against a target of $2.284 billion giving an overrun of $145 million,” said Chinamasa.

He revealed that government in partnership with Agribank, was finalising modalities for the mobilisation of $50 million for lending to A2 farmers at concessionary interest rates of below 9 percent.

“At least $10 million will be set aside in support of livestock production,” said Chinamasa, projecting a 4,5 percent growth in electricity generation due to the ongoing rehabilitation project at Hwange and small power stations.

Said Chinamasa: “This will also be supported by improved revenue collection from the on-going programme of installation of prepaid meters.

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