News / National
'Zimbabwe should have a specialised economy,' says World Bank
23 Jan 2015 at 16:34hrs | Views
The World Bank says Zimbabwe should try a specialised approached to production and value addition in order to grow the value chain and the country's export and revenue base.
Speaking at a one-day economic outlook symposium held in the capital yesterday, World Bank senior economist Han Herderschee said Zimbabwe has a number of products where it can be a world leader but the products are not being given adequate attention.
He said many companies in the world had responded to the slowdown in the global economy by restructuring and focusing on a few products that give them leverage.
"Companies are really just focusing on a limited number of products and make sure that they are really world leaders in those products, that's the story behind the value chain. This is why in the global economy, you really focus on a small number of things and you make sure that you get these things right. And that's a very different story to what most of the production that currently takes place in Zimbabwe," he said. He said companies in Zimbabwe had diversified and focused on many products as a survival mechanism in a difficult economic environment. Herderschee said a look at Rwanda and Kenya shows that the two countries have focused in coffee which is enormously value added and fruit and vegetables respectively to grow their economies.Coffee is a major source of socio-economic development to people in Rwandan rural areas. It was enforced as a compulsory crop in 1930 and it grew, yielding good and supportive income to rural farmers and export programs.
The Kenyan fruit and vegetable sector is driven largely by private traders responding to international market opportunities and exports have grown at over 6 percent per year for the past 30 years. Although French beans, Asian vegetables, canned pineapple, and avocados dominate Kenya's exports, the country now exports 30 different fruits and 27 vegetables. Zimbabwe's export base on the other hand is diverse and has no one specialised product that sustains the economy.
"Zimbabwe has a number of products where it could be a world leader. There are various ways which you can link into those value chains. That's how companies in Africa and beyond are doing. So the specialisation of niche products in export markets where you then beat the world that is how restructuring goes. That is the story that is behind the value chains, behind the whole economic development from a corporate perspective.
"If you have a strategy like this your macro-economic framework would change, exports would grow, people would come back and they would contribute less to remittances and more directly to the economy," Herderschee said.
Speaking at a one-day economic outlook symposium held in the capital yesterday, World Bank senior economist Han Herderschee said Zimbabwe has a number of products where it can be a world leader but the products are not being given adequate attention.
He said many companies in the world had responded to the slowdown in the global economy by restructuring and focusing on a few products that give them leverage.
"Companies are really just focusing on a limited number of products and make sure that they are really world leaders in those products, that's the story behind the value chain. This is why in the global economy, you really focus on a small number of things and you make sure that you get these things right. And that's a very different story to what most of the production that currently takes place in Zimbabwe," he said. He said companies in Zimbabwe had diversified and focused on many products as a survival mechanism in a difficult economic environment. Herderschee said a look at Rwanda and Kenya shows that the two countries have focused in coffee which is enormously value added and fruit and vegetables respectively to grow their economies.Coffee is a major source of socio-economic development to people in Rwandan rural areas. It was enforced as a compulsory crop in 1930 and it grew, yielding good and supportive income to rural farmers and export programs.
The Kenyan fruit and vegetable sector is driven largely by private traders responding to international market opportunities and exports have grown at over 6 percent per year for the past 30 years. Although French beans, Asian vegetables, canned pineapple, and avocados dominate Kenya's exports, the country now exports 30 different fruits and 27 vegetables. Zimbabwe's export base on the other hand is diverse and has no one specialised product that sustains the economy.
"Zimbabwe has a number of products where it could be a world leader. There are various ways which you can link into those value chains. That's how companies in Africa and beyond are doing. So the specialisation of niche products in export markets where you then beat the world that is how restructuring goes. That is the story that is behind the value chains, behind the whole economic development from a corporate perspective.
"If you have a strategy like this your macro-economic framework would change, exports would grow, people would come back and they would contribute less to remittances and more directly to the economy," Herderschee said.
Source - BH24
