Private Sector Development key for Zim’s economic growth
By Respect Gwenzi, Jun 27, 2018
Harare – The African Development Bank (AfDB) on Wednesday said Private Sector Development (PSD) is the engine of a sustainable and inclusive economic growth in Zimbabwe.
PSD is a term in the international development industry to refer to a range of strategies for promoting economic growth and reducing poverty in developing countries by building private enterprises.
Addressing delegates at the PSD Round Table discussion in the capital, under the theme, “A New Dawn for the Zimbabwean Economy, the Role of the Private Sector” Country Manager, Zimbabwe Country Office, Mr Damon Kitabire said as a development Bank, they have the responsibility of ensuring that the right investments are made and that the private sector is well equipped as an irreplaceable partner towards the recovery of the Zimbabwean economy.
“Our hope as a development Bank is that discussions such as these will better inform and uniquely align the strategic methodology for the Bank’s engagement with the private sector in Zimbabwe.
“While trade is picking up, actual investments remain weak, and concerns remain that downward risks such as policy uncertainty, or possible financial market could derail recovery.
“It is now therefore imperative for the country to implement the much-needed reforms to grow the economy and to be competitive in what appears to be the complex, demanding and digitized future,” he said.
Mr Kitabire said in order to achieve a strong and sustainable growth, a robust private sector that is supported by an efficient banking system is critical.
“……the road ahead of the sector is promising but it will require a lot of deliberate and strategic effort from the financial sector, the manufacturing industry, the agricultural sector, the mining industry, the telecommunications sector and all small and medium enterprises, to bring that promise to fruition.
“The AfDB stands ready to collaborate with you to bring to life viable projects that will have positive spillover effects on the economy of Zimbabwe,” he said.
Mr Kitabire also said the Banks’s strategy as summarized by the High 5s is to Industrialize Africa, Light up and Power Africa, Integrate Africa, Feed Africa and improve the quality of life for the people of Africa, adding that Zimbabwe remains a critical stakeholder in the Bank’s medium and long-term strategy.
Also speaking at the event, Governor of the Reserve Bank of Zimbabwe, Dr John Mangudya said the country is open for business and several sectors are proving to be growing in terms of consumer demand.
“There is need for investors to invest in drinks and beverages sector, the packaging industry, the leather sector, textile and clothing and the chemicals and fertilizer industry. Most of them are at 100 percent capacity utilization.
“We are aware that Zimbabwe is going through foreign currency shortages… and therefore if we open up the economy we are saying that we need more comers coming into this country,” he said.
For over two decades, Zimbabwe’s private sector grappled with numerous challenges including lack of working capital, liquidity constraint, inadequate foreign currency for manufacturing companies to import the much needed raw materials and the continued influx of cheap imported products.
In addition, the high cost of infrastructure (particularly energy and water) has been key challenges for private sector development.
However, the country’s new political and institutional dispensation has given a new impetus to the economic recovery prospects.
Since his inauguration, President Emmerson Mnangagwa has expressed strong commitment to undertake economic and structural reforms, notably to rebuild confidence through the restoration of private property right, ensure macroeconomic stability and growth, fiscal consolidation and external debt arrears clearance, improve governance and the business environment, to generate broad-based growth and create jobs.
The new investment policy launched by government early this year emphasizes the need to pursue market-based approaches to economic management on improved efficiency in public administration.
With renewed optimism and rehabilitation of industry, there is increasing demand for international funding to the private sector to restore the Zimbabwean economy and deliver goods and services to Zimbabweans.