Thursday, March 05, 2009

Lifting sanctions will spur Zim economy

from the African executive:

Most of the article is a tirade blaming the west for sanctions that caused all of Zim's troubles.

...The mere act of lifting sanctions on Zimbabwe coupled with the tangible effects of credit availability will ease the external payments arrears and improve the nation’s risk profile, allowing companies to receive credit at more viable rates. This will serve to reduce internal inflationary pressures as well as allow companies to increase capacity utilization levels and in so doing provide more goods and services whilst bolstering employment.

Key Sectors of the Economy

The persistent fuel shortages have severely reduced productivity across all the key sectors of the economy namely agriculture, mining, manufacturing, tourism, construction and transport. These shortages have also been affecting the day to day operations of commerce and the public transport system, resulting in loss of crucial production hours. Small-scale miners and newly resettled farmers are being hit hard because of their reliance on diesel powered equipment and inadequate fuel has also impacted negatively on land preparation and ultimately yields of a whole range of crops.

This fuel shortage coupled with the fact that scarce foreign currency resources are being used to import grain and other food as opposed to being channelled towards importing critical inputs to reduce costs for farmers has had a devastating impact on the sector.

The agriculture sector contributes approximately 20% of Zimbabwe’s GDP, 22% of foreign exchange earnings and 23% of formal employment, therefore if economic sanctions are lifted and credit is made available to Government, the 300,000 newly resettled farmers will be in an ideal position to contribute to the economic recovery process. Not only because of the inevitable increase in availability and affordability of essential inputs but also because of the Reserve Bank’s farm mechanization initiatives which have equipped them and the current liberalisation will ensure that they have great financial incentives to produce....

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