2010: Year of reinvigorating economy

The stable macroeconomic environment, which has halted hyperinflation, is likely to persist throughout the year with the projected growth — the first real positive economic performance in 10 years — expected to hinge on the performance of the mining sector, the expansion of export markets and the attraction of more visitors and investors into the country.
While the inclusive government, formed in February 2009 to mark the beginning of a modest recovery witnessed in the past 11 months, has been plagued with problems associated with its founding principles, analysts believe the internal disagreements could help construct a stronger foundation necessary for the rebuilding of a robust economy.
After achieving a real Gross Domestic Product (GDP) growth of about three percent last year, up from a 14 percent fall in 2009, 2010 would be a year of consolidation with further political reforms already underway expected to quickly heal the economic wounds caused by the decade long crisis.
“Some recovery will come from agriculture and some from mining but it will not be dramatic,” said University of Zimbabwe Graduate School of Management lecturer, Tony Hawkins.
“Manufacturing will remain the weak link in the economy but the 40 percent growth predicted for the mining industry is realistic. Zimbabwe’s exports will recover after a setback in 2008. We exported US$1 billion worth of goods in the first 10 months of 2009. The whole year I estimate the value of exports at US$1,5 billion. This growth is likely to continue into 2010,” he said.
Hawkins’ positive prediction is predicated on a variety of factors that have arisen since the new administration assumed office and immediately undertook to re-engage the international community to turn around the fragile economy.
These include the significant restoration and transformation of capacities to trigger sustainable economic growth and the identification of growth areas that can deliver equitable economic growth and eventually lead to the reduction in annual inflation, unemployment and poverty.
Industrial capacity utilisation has already increased by more than 300 percent in 11 months to 30 percent as of December 2009 from 10 percent in 2008.
Output in mines has surged significantly, riding on the back of bullish international gold and platinum prices that have gone past US$1 000 per ou-nce while investor appetite on the Zimbabwe Stock Exchange has remained high.
The tourism in-dustry had al-ready reported a modest three percent incr-ease in arrivals during the first half of 2009.
Independent economist, John Robertson predicted that with the encoraging ann-ouncements by the British Airways (BA) recently about the possibility of flying back to Harare, and positive sentiments by the World Tourism Organisa-tion, it was possible that in 2010, Zim-babwe would double its tourist arrivals.
This will dovetail into the broader recovery to mark 2010 as the first year of real economic recovery in Zimbabwe with stable rates of interest  and inflation which had all hit four digit figures before the government dumped the country’s currency in favour of the United States dollar and the South African rand in February last year.
“It is possible for the economy to grow by seven percent (as predicted by government) considering where we are coming from but it will not be a great achievement,” said Robertson. “Economic stability is returning because we are no longer printing money and more and more manufacturers are returning to work. It is possible to doubled tourist arrivals if BA returns to Harare and we convince other airlines to land here, but we need to rejuvinate Air Zimbabwe,” he added.
Robertson was however, worried by the volatile situation in agriculture where he warned that unless government changed its stance on large scale commercial farmers, it should stand ready to continue dolling out food handouts to the majority of its 13 million citizens. He said it will take long for new the farmers to produce enough.
Preparations in the current and in previous farming seasons, even in years when funding had been made available, have been chaotic. And the new administration — a cross pollination of experience and energy — is also struggling to deal with the perennial problems dogging the sector.
Until this week, just three months before the harvest in April, communal farmers were still receiving inputs.
 “Agriculture will remain a disaster until government agrees to get large scale farmers back on the land. You cannot give peasant farmers large farms and expect production,” added Robertson.
Former president of the Confederation of Zimbabwe Industries, Callisto Jokonya said ther will be accelerated recovery in the manufacturing sector.
“Manufacturing will come of age,” Jokonya said.
“Rains are not looking so good but some of the problems that affected industries have been simplified, we need to push a lot of exports. What politicians must do is  to go out and sell one of the major assets of the country to make sure this country moves forward. About 80 percent of Zimbabwe is covered in minerals, we need to sell them and say we want to bring back our economy,” he said. However, while companies could be finding their feet, Zimbabwe still has a lot of ground to cover.
The effects of the ongoing realignment  in the economy is taking long to trickle down to the majority. Rural people are still struggling to access the greenback and the rand and are often forced to engage in barter trade.
The social service delivery system also remains distressed with little or no drugs in hospitals.
Like before, high density suburbs’ roads are flooded with stinking raw sewerage; unemployment remains high and the public transport system is in disarray.
In early 2009, Zimbabwe appealed for US$10 billion to repair its shuttered economy in the next three years but in a world fighting a much broader crisis, and sceptical about President Robert Mugabe’s commitment to the political pact, assistance has not been forthcoming.