Multi-currency to anchor Zim Asset

THE multi-currency system will remain functional over the five-year tenure of the new economic blue-print, the Zimbabwe Agenda for Socio-Economic Transformation, to consolidate macro-economic stability, a senior Government official has said.

Secretary for Industry and Commerce Mrs Abigail Shoniwa told a Confederation of Zimbabwe Industries breakfast meeting in Harare yesterday that according to Zim Asset, the multi-currency regime will run through the full course of the five-year economic blueprint.

Zim Asset is the national socio-macroeconomic policy that will guide and direct all Government programmes between 2013 and 2018, coined for an empowered society and growing economy. It was crafted by the ruling Zanu-PF, Government, the private sector, stakeholders and borrows from previous national development programmes.

The fact that Government has unequivocally stated in the Zim Asset that multi-currency will definitely be the common thread of all fiscal and monetary policies until at least 2018, dissipates any lingering fears of an immediate return to the local unit.

Zimbabwe officially adopted the multi-currency, dominated by the US dollar, in February 2009, after scrapping the local unit that had been rendered valueless by hyperinflation.

Multi-currency stabilised the economy and arrested runaway inflation. Annual inflation peaked at 218 million in August 2008 and made planning difficult.

Mrs Shoniwa said continuation of the multi-currency system was one of the key assumptions and success factors on which the new economic blueprint will be anchored.

Other assumptions include improved liquidity and access to credit by key sectors, establishment of a sovereign wealth fund, improved revenue collection from key sectors, increased investment infrastructure and effective implementation of public and private sector partners.

Further, the policy assumes that there will be an increase in foreign direct investment and establishment of special economic zones and effective implantation strong value addition policies.

The policy will also rely on key success factors collaboration between Government private sector, citizens and other stakeholders, commitment and desire to meet people's development expectations, human capital development programmes, enhanced science and research development, introduction of and special funding vehicles.

Implementation of supportive policies in key productive sectors of the economy, value addition and beneficiation, rehabilitation, upgrading of key infrastructure utilities and alignment of legislation policies and all guidelines by all Government ministries in line with the constitution were also cited as key for the success of Zim Asset.

Key strategies of the policy entail beneficiation as well as value addition, expanding accessibility and utilisation of ICT, building of infrastructure and utilities, fostering strong strategic linkages and formalisation of SMEs and co-operatives and implementation of import substitution programme and recapitalisation of development institutions and accelerated implementation of public private partnerships.

The Office of the President and Cabinet will monitor and evaluate implementation of the macro-economic plan to be underpinned by the results based management system.

Industry and Commerce Minister Mike Bimha said that many line ministries will monitor and evaluate the Zim Asset, and the President will also have a keen interest in that.

"Every cluster will do its monitoring and evaluation, every ministry will do its monitoring and evaluation but in addition the Office of the President and Cabinet has been tasked as well to evaluate and monitor (Zim Asset) and what does this mean? It means the President himself wants to be close, in knowing how we are doing," he said.

Zim Asset will also be used as the basis for macro-economic budgetary framework by Treasury commencing 2014. It has a matrix showing key result areas, outcomes and expected outputs for easy conceptualisation, comprehension appreciation and clarity. Measurement of progress will be done through cluster implementation for monitoring and periodic review and evaluation of the plan, to be funded from tax and non-tax revenue, leveraging land and mineral resources, establishment of strategic development sovereign fund, and strengthening use of sovereign backed pension funds.

The plan will be funded from infrastructure bond, promoting PPP financing models, securitisation of remittances and re-engaging international and multilateral institutions.