The Reserve Bank of Zimbabwe (RBZ) has revealed that current foreign currency crisis affecting the nation has been necessitated by lack of productivity with the country resulting in low level of exports.
The development comes at a time when the country is losing much needed foreign currency in importing essential commodities such as edible crude oils, wheat and other products that could be produced locally.
Addressing parliamentarians at a pre-budget seminar in Bulawayo today, RBZ governor Dr John Mangudya said there is a need to work on export competitiveness in order to build the country’s foreign currency reserves, a development that would support the economy.
“We need to work on export competitiveness. We must learn to feed ourselves. As long as we import food to feed ourselves, and then we think that we can get forex in that environment the answer is no, we can’t. We spend US$20 million per month to import cooking oil in this country. We spend US$60 million to import wheat for nine months of the year. We spend US$95 million to import fuel. We spend US$60 million per month to import electricity. This is what we want as a country …produce, produce, produce. Your currency is good as your production, good and services that you are producing. What are you producing Zimbabweans? If you are producing nothing, you can’t have a high currency that is strong. The challenge that we are facing foreign currency shortages is that we are not producing,” he said.
The governor also highlighted that the fiscal imbalance between the nostro account and the rtgs deposits was a major issue that is creating problems which have got to be addressed by productivity levels.
During the meeting, economist Professor Ashok Chakravarti urged parliamentarians to consider focusing on the human resource based industries such as health care, education and ICT’s in rebuilding the economy.
Professor Chakravarti added that there was a need to privatise and restructure state enterprises and parastatals which were not generating profits.
“If you don’t solve fiscal deficit, there is nothing you can do. My policy would be no more subversions to state enterprise and parastatals. Of course there are exception it’s up to the executive to decide. We have 114 of them, loss making and have over $15 billion in debt capital which is breathing around our backs. No more subversions to state entities,” he said.
The 2018 parliamentary pre-budget seminar is set to end on Saturday with legislators and ministers expected to deliberate on economic issues and mapping forward the guidelines to the next fiscal policy.