The Zimbabwean government hopes to solve its currency crisis through export revenue but the country needs to start producing first, says Reserve Bank of Zimbabwe (RBZ) governor, Dr John Mangudya.
He said in a statement that Zimbabwe needed to rapidly increase production in “quick win” sectors – such as agriculture, tourism and horticulture – to generate much-needed foreign currency.
"I remain positive about this economy and I have always maintained that Zimbabwe does not have a currency crisis, but that Zimbabwe's problems have everything to do with limited production. Exports are the salvation for this economy, but we need to produce first," he said.
Mangudya acknowledged that the high costs of production in Zimbabwe were a major roadblock but said that government was looking at increased export incentives.
"The export incentives are meant to ensure that producers reduce their cost. Our expectation is that if we give that incentive, producers would also be able to reduce their prices by as much as 10%, thereby making Zimbabwe's products competitive on global markets," he said.
The RBZ has subsequently increased the export incentive from 5% to 12.5% for tobacco farmers.
Do you think increased exports are viable for Zimbabwe in the short-to-medium term? Are the incentives enough to drive increased production? What else needs to be done?
We will include your comments in an article for the upcoming Zimbabwe feature in FTW. Please send any comments to adelem@nowmedia.co.za
