IDP misses its targets

The IDP was launched with the objective of increasing the manufacturing sector’s contribution to GDP from the current 15 percent to 30 percent. It also aimed to increase contribution to exports from the current 26 percent to 50 percent by 2016.

Disappointing trade

International trade for the first quarter of the year was, however, disappointing. According to official figures, exports declined by 10 percent in the first quarter.

Imports for the same period stood at $1,7 billion, representing a 14 percent increase from last year’s figure of $1,5 billion.

The IDP assumed that for its targets to be met, an average real GDP growth rate of seven percent per annum would be targeted under the policy framework.

However, the year 2012 realised a GDP growth rate of 4.4 percent.

The IMF is even projecting that the years 2013 and 2014 will see the Zimbabwean economy growing by 4.5 percent and 4.2 percent, respectively.

This is way below the IDP’s targeted average annual growth target of seven percent.

The IDP was also aiming to increase capacity utilisation from the current levels of around 57 percent to 80 percent by the end of the planning period.

It is, however, saddening to note that capacity utilisation fell by a marginal 13 percent in 2012, from 57.2 percent to 44.2 percent.

IDP strategies

In a space of one year, most of the strategies spelt out in the IDP have not yet been implemented. For instance, the IDP was aiming at establishing a dedicated financial mechanism through the restructuring of existing institutions. We are yet to see the establishment of an ‘Industrial Development Bank’.

The IDP also pledged to review the import tariff structure on customs duty and to scrap VAT on industrial raw materials and packaging. This was to level the playing field for locally produced goods. The government has still not made a concrete move in this direction.

The Government also wanted to improve the investment climate and the business environment. However, given the existence of the unfavourable indigenisation regulations, international capital inflows are still coming in dribs and drabs.