EDITORIAL COMMENT:SI64 dividends vindicate Government

Everyone is painfully aware that Zimbabwe’s export earnings and incoming cash flows combined are well below the demand for imports, and that as a result steps are required to boost exports and to manage imports.

The most effective measure so far taken was the gazetting of Statutory Instrument 64 of 2016, which ended automatic permission for imports of a wide range of products manufactured or grown in Zimbabwe.

Vice President Emmerson Mnangagwa has put the import saving at $1 billion in round figures. That is serious money.

Some of the saving has probably gone on increased imports of raw materials, although these are often a small fraction of the final cost of a product made in Zimbabwe, and the Government and the millers between them have used around half that saved money to import the food we needed, following the dreadful drought of last year.

But generally we can now see just what sort of disasters we would have been facing if we had not had that extra $1 billion.

And there has been a highly desirable extra dividend. We have not only cut the import bill but have done it in a way that allowed jobs to be maintained, and even created, as Zimbabwean manufacturers took up the slack.

This boost for local industry and employment is almost certainly the main reason why Zimra is running ahead of its targets in tax collection this year.

Just the PAYE on salaries paid on time and the extra VAT collected as fully-paid workers are able to shop would have made a serious difference.

We can now move ahead confidently. The extra income for industry means that industrialists can afford the technology they need to stay ahead, and this coupled with a range of legislative changes making it a lot easier to set up a business and expand, should see more positive growth.

The second major step taken by the Government was the decision to ensure that farmers could take advantage of the predicted La Nina heavy rains, even after they were badly hit by last year’s drought.

Command Agriculture will definitely be cutting the net import bill by hundreds of millions of dollars and helping to boost exports by another few hundred million.

The closing of the gaps between import needs and export earnings will obviously help everyone.

At the same time many farming families will have their first decent year’s income for several years, and their pent-up demand for a variety of goods will further help the industrialists and their workers, plus give a boost to rural business people who will finally see customers with money.

Purists might decry Government intervention into the economy.

But the two major measures of the last 12 months were the Government using modest management of market forces to allow Zimbabweans, who knew what they were doing and were prepared to work hard, our industrialists and better farmers plus the people who work for these two groups, to climb out of the morass they were in and start producing wealth.

There were no special favours and no tight management, just a couple of breaks for people ready to work.

SI 64 would have been useless, and would have brought suffering, if Zimbabwean industrialists just sat down and moaned instead of getting back to work, and Command Agriculture needed a lot of farmers out there sweating in their fields to ensure their inputs produced crops.

The Government can be congratulated for unleashing the productivity of Zimbabwean industrialists and farmers, creating the environment they needed to thrive, and they in turn can be congratulated for seizing the opportunity and putting in the hard work required.

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