Lend more to private sector, banks urged Minister Chinamasa
Minister Chinamasa

Minister Chinamasa

Business Reporter
ECONOMIC analysts say local financial institutions must consider increasing their lending to the private sector next year for the country to achieve the projected 2,7 economic growth rate. Since 2009, banks showed willingness to lend, despite a subdued economic environment, but much of the loans were advanced to Government. Speaking at The Herald Business/Confederation of Zimbabwe Industries Post-Budget Breakfast last Friday, BancAbc group chief economist Mr James Wadi said loans to the private sector in 2015 have generally been crowded out by Government lending during the period.

“Generally loans to the private sector in 2015 have been flat and we are advising for a situation where credit to the private sector grows going into 2016. “Going into the next fiscal year, economic headwinds are huge and Government lending should not overshadow credit to the private sector which is the productive sector,” said Mr Wadi.

He said lending to the private sector is key when transforming the country’s economy and setting up of Special Economic Zones will also have a positive bearing on efforts to turnaround the economy.

Mr Wadi said there are signs for a better economic future going into 2016 considering a raft of policy measures pronounced in the budget. “Special economic zones if implemented well have the capacity to grow the economy and we are cognisant of their value,” said Mr Wadi.

Government is currently crafting the necessary framework for the creation of Special Economic Zones.

It is envisaged that these enclaves help promote value addition and product beneficiation in line with the Zimbabwe Agenda for Sustainable Socio-Economic Transformation as well as regional industrialisation initiatives under the Southern African Development Community and all umbrellas.

Already, Government has earmarked the SEZs to include leather and textiles in Bulawayo, petro-chemicals in Lupane, tourism, tourism in corridor Victoria Falls-Gwayi–Binga–Kariba, finance hub in Victoria Falls, technology hub at Sunway City and diamond cutting in Harare and Mutare.

Successful implementation of SEZs is expected to attract increased foreign direct investment. Speaking at the same event, Finance and Economic Development Minister Patrick Chinamasa said going into 2016 his focus is on introducing policy measures that can grow the economy rather than focusing on figures.

He challenged the private sector to increase production and explore for more opportunities in the global market. “Zimbabwe as a market is very small compared to other countries and companies should look global in their approach,” he said.

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