If you go to Bulawayo now, you will see that factories are still closed. If you go to the Midlands, ZISCO Steel is still closed. Mutare, Harare – Coventry, Birmingham area; factories are still closed. The day these factories are going to be open, that is the day we are said to be working on our growth, production and productivity. That will give us a sustainable stability in the economy. So far this stability is shaky or hazy because it is not backed by production or productivity.
The other objective of the TSP was to eradicate the trade deficit. The trade deficit arises between the ratio of exports and imports, and I must say the gap is narrowing. Our exports are catching up with our imports gradually and that is a positive trajectory. I hope we can continue to implement policies that will promote more exports into the region and beyond so that we can maximise on the opportunities presented by the African continental free trade area by way of developing our markets and exploiting the supply value chains in the trade sector.
The balance of payment is also very critical when we talk of stability and in this relation, the current account balance is improving quite gradually and that is positive. You know that when you talk about the external sector, you are not only talking about the current account balance; you are also talking about the capital account. The capital account is very sensitive to political stability and confidence issues. Capital inflows are erratic at the present moment because we are still considered an unsafe destination. Our sovereign risk is still very high. We need to work on our sovereign risk so that we can have capital flowing back into the Southern African country. If we do not work on our perceived sovereign risk, we are not going to get enough capital flows.
In other countries in the region, they do ratings. They take standards and pull (poor) ratings. They take Moody’s as ratings for their economy and investors take those ratings very seriously. In our case, we are not subjected to ratings. It is only our sovereign risk which is at stake. If we improve our sovereign rate, we can be able to improve on portfolio investments, FDI investments and other inflows that come into the country; that will boost our capacity to ratchet up economic activity to stimulate economic activity.
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