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Rumbidzayi Zinyuke  Business Reporter
The growth of the Zimbabwean economy in 2014 will be anchored on the formulation of pro-growth policies that will help to attract the much needed foreign direct investment, experts have said.According to The Market Making Corporation third quarter Equities Market review, the Zimbabwean economy was likely to contract further in the remaining part of 2013 but there was room for economic growth next year after Government settles down and implements new policies.

“The formulation of pro-growth policies will be the game changer for the economy and there is a growing need to mobilise funding for all sectors of the economy if the Government is to arrest the economic slowdown gripping the country.

“Intonations from the new policymakers suggest that there will be a deliberate focus on the economy and creating an investor friendly environment. Funding will, in our view, be the biggest challenge for the economy going forward and we hold that the new policymakers have to ensure there is policy clarity to attract FDI and revamp the economy,” MMC said.

The unavailability of funding, exacerbated by the decade-long liquidity challenges due to the negative impact of illegal sanctions imposed on the country by Western countries, have seen the country’s economy on a downward trend. The challenges resulted in all sectors of the economy underperforming.

According to MMC, the local manufacturing sector will continue to be haunted by capitalisation challenges in the remaining part of 2013 as foreign product competition remains a major challenge.

The company said there was therefore a need to concentrate on areas where the sector has comparative advantages over foreign competitors and focus on them.

Capacity utilisation in the manufacturing sector has continued on a downward trend dropping from last year’s average of 44,9 percent to 39,6 percent in 2013.

Government has indicated that industry needs about US$2 billion to resolve the issues around capacity utilisation, old equipment and efficiency.

The company said the Government’s initiative to avail timely funding in the agricultural sector would positively affect the sector’s output and GDP contribution next year.

It said agriculture would continue to be driven by crops like tobacco following the increased investments into the sector and the entrance of 21 000 new farmers.

“Maize and cotton production are coming off a low base and with increased funding these are likely to add to the country’s output and grow the sector’s contribution to GDP,” MMC said.

MMC said the solution was to allow the manufacturing sector to retool and then give support when it has restructured its operations and is able to produce enough to meet local demand.