Business / Economy
Zimbabwe's economic recovery hazy, warns Gono
03 Apr 2013 at 07:37hrs | Views
The Reserve Bank of Zimbabwe (RBZ) has that the economy's full recovery remains hazy as long as the country continues to rely on imports of finished products.
Addressing the media after the central's bank board held its first quarterly meeting for 2013, RBZ Governor Dr Gideon Gono said the country's import bill remained too high.
Figures for January and February show that imports amounted to US$1.3 billion while exports were US$524 million.
While the financial sector remained "safe and sound" and exports were improving, the governor said the RBZ was worried about the country's continued dependence on imports.
"…we are seeing the growth in our exports but we remain very worried by the extent and level to which we are depending on imports, particularly of finished products. We cannot build a strong economy by exporting jobs," Dr Gono said.
He added that there was more importation of finished products as opposed to productive assets such as machinery and equipment. It was imperative that local industry, which had yet to recover from years of economic decline, be capacitated to produce, he said.
"We need to strengthen and capacitate our local industries, that is the only way we can stop the haemorrhaging of foreign exchange that is unnecessarily going out of the country; that is the only way we can reduce unemployment," he said.
Zimbabwe's economy has been progressively recovering in the past four years, with growth averaging 8.0 per cent, but the revival has now stagnated owing to a number of challenges.
The absence of cheap capital, continued imposition of sanctions by western countries on the economy and absence of foreign direct investment are among the key factors hampering a revival.
Dr Gono said the economy was reliant on five major sources of liquidity, including exports, diaspora inflows and lines of credit.
"…any attack on those five basic factors is an attack on our collective well-being, it is an attack on job creation, an attack on our own self-empowerment," he said.
Dr Gono reiterated the central bank's support for the on-going indigenisation and empowerment programme but he emphasised that the programme, which is now targeting the financial sector, must not destabilise the sector.
Meanwhile, Gono said the financial sector remained "safe and sound".
"We have not closed any bank and have no intention of sanctioning any. You have no need to lose sleep over the status of the banking sector," he said.
Addressing the media after the central's bank board held its first quarterly meeting for 2013, RBZ Governor Dr Gideon Gono said the country's import bill remained too high.
Figures for January and February show that imports amounted to US$1.3 billion while exports were US$524 million.
While the financial sector remained "safe and sound" and exports were improving, the governor said the RBZ was worried about the country's continued dependence on imports.
"…we are seeing the growth in our exports but we remain very worried by the extent and level to which we are depending on imports, particularly of finished products. We cannot build a strong economy by exporting jobs," Dr Gono said.
He added that there was more importation of finished products as opposed to productive assets such as machinery and equipment. It was imperative that local industry, which had yet to recover from years of economic decline, be capacitated to produce, he said.
"We need to strengthen and capacitate our local industries, that is the only way we can stop the haemorrhaging of foreign exchange that is unnecessarily going out of the country; that is the only way we can reduce unemployment," he said.
The absence of cheap capital, continued imposition of sanctions by western countries on the economy and absence of foreign direct investment are among the key factors hampering a revival.
Dr Gono said the economy was reliant on five major sources of liquidity, including exports, diaspora inflows and lines of credit.
"…any attack on those five basic factors is an attack on our collective well-being, it is an attack on job creation, an attack on our own self-empowerment," he said.
Dr Gono reiterated the central bank's support for the on-going indigenisation and empowerment programme but he emphasised that the programme, which is now targeting the financial sector, must not destabilise the sector.
Meanwhile, Gono said the financial sector remained "safe and sound".
"We have not closed any bank and have no intention of sanctioning any. You have no need to lose sleep over the status of the banking sector," he said.
Source - new ziana
