Such is the lack of good news on the manufacturing front, that the bulletin makes a big deal of the opening of a mango processing plant.
Says Treasury: “On a positive note, a tropical fruit and processing plant was commissioned in Norton, advancing the Zim-Asset thrust of promoting value addition.”
With virtually no budgetary aid and international capital, Zimbabwe now relies almost entirely on taxes. According to the figures, 89 percent of government revenue comes from taxes.
“The bulletin comes at a time when the 2016 Budget is faced with declining revenue on most tax heads as well as expenditure pressures emanating from payments of the outstanding 2015 salaries and wages as well as the associated bonuses.
While Zimbabwe often boasts of its “mineral wealth”, the outlook for commodities remains weak and minerals are unlikely to do much for the country in the short term. China, a major buyer of Zimbabwean commodities, is buying less as it manages a slowdown in its economy. This means Zimbabwe, which relies heavily on commodities, faces even more troubled times ahead.
“The global economy remains weak and gloomy, casting doubt on the domestic economy’s turnaround efforts. International commodity prices for the country’s major exports remain depressed, while our rate of absorbing imports remains high,” the bulletin says.
Zimbabwe’s use of the US dollar, which the RBZ is trying to ease with a series of frantic measures, continues to weigh on the economy. As the dollar gains on currencies such as the rand, it becomes cheaper to import goods than to manufacture them in Zimbabwe, while exports from Zimbabwe become uncompetitive.
“The rand and other regional currencies, despite stabilising, remain weak against the US dollar. This has rendered the economy uncompetitive. Consequently, Zimbabwe has now emerged as the regional market for US dollars.”
While government officials are continue with the feel good rhetoric on the economy, their own numbers tell a different story.- The Source
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