ZNCC president Hlanganiso Matangaidze told The Zimbabwean that these two issues would remain the biggest challenges facing the country going into the new year.
“The liquidity crisis in the economy is worrisome,” Matangaidze said. He added that he hoped that in 2014 the mining sector would step up to the plate and help alleviate some of these problems.
“In particular, the diamond industry has created 60,000 jobs elsewhere when people are losing jobs here,” he said.
“You don’t go through a day without realising the need to create jobs and address liquidity. I am positive that the minister of mines, Walter Chidhakwa, has taken on board the issues we raised with him.”
Zimbabwe adopted the multi-currency system in 2009 and, since then, the country has grappled with the availability of money in the economy. According to the Bankers’ Association of Zimbabwe, the main sources of liquidity in this system include domestic savings, foreign direct investment, foreign lines of credit, export proceeds and money from the diaspora.
All these sources have failed to provide the expected capital. FDI and foreign lines of credit have been hindered by a hostile policy environment; domestic savings have been affected by a lack of confidence in the banking sector and a thriving informal economy.
The scarcity of liquidity means that the cost of credit will continue to be high. Matangaidze said that 2013 had been marred by unprecedented company closures. He said he hoped that the stability that came after the elections would help the government address critical issues in the national economy.
As well as hundreds of company closures, companies representing all sectors of the economy have downsized and laid off tens of thousands of workers. These include Bindura Nickel, Dairibord Cairns, Zimplats, AfrAsia Kingdom Bank and Rainbow Tourism Group.
According to the Confederation of Zimbabwe Industries’ 2013 manufacturing sector survey, the major causes of these problems were lack of finance, restrictive labour laws, policy inconsistencies and inadequate infrastructure.
The ZNCC president said he had hoped the government’s latest economic blueprint would bear fruit.
“The Zimbabwe Agenda for Sustainable Socio-Economic Transformation economic blueprint was a positive development and the lifting of the ban on the importation of left-hand-drive vehicles was also a plus,” he said.
Matangaidze said that the chamber of commerce had tabled its concerns to the government.
“It’s still early days but they have already taken on board what we said and we are waiting to see how our concerns will be factored into the budget,” he said.
Post published in: News