Production is the key to any economy, and you can see that in developed countries, there is plenty of construction, trade, leveraging on their resources: they produce in large volumes and they make the most out of it through beneficiation.
Our biggest challenge as a country is that we have the resources but we are not leveraging on them.
We cannot leverage on resources when the environment is not conducive for business.
So we need to expand the economy through increased production.
What we need to do is fiscal expansion so that we also have room for fiscal space.
We can only expand fiscal space by expanding production and this will also lead to more people paying VAT (value added tax), more people paying corporate tax, payee and so forth.
That can only be found when the economy is expanding.
Our situation is not good because these are the fundamentals that we need to sustainably minimise the cash challenges in Zimbabwe.
In the meantime, we continue to increase the importation of cash into the economy and we continue to promote usage of plastic money so that we preserve our foreign currency for importation of goods and services.
Sometimes, we have what I prefer to call double dealing in our economy.
We import cash to purchase fuel at the service stations, but that fuel which we are purchasing has also been imported.
So we are in a situation where we are importing cash to import fuel which has also been imported.
So it means we are double-dipping. It means you have to be rich to be able to sustain such a situation. The same is happening for cooking oil. 60 percent of the cooking oil in Zimbabwe is imported, both in the form of the packaging and also the crude soya oil.
We are also purchasing gold and tobacco in foreign currency as a way of incentivising the producers so that we can continue to increase exports.
On the part of the Reserve Bank, we have put in place a number of interventions and special facilities in the market. We have enterprise development facilities, export facilities’, women and youth empowerment facilities, all in an effort to increase production.
We are happy the President has said that we should now move from the politics to production.
I can say that we have imported cash of an amount of about US$400 million from January to the end of April.
This is higher than what we did last year at around the same time.
We are going to continue doing that. This has been because of the facilities provided by Afreximbank, increased production of gold and tobacco and also the need to ensure that the economy is sufficiently liquefied so that people can transact.
Continued next page