Conrad Mwanawashe Business Reporter
ZIMBABWE should register annual growth rates of between 7 percent and 8 percent over the next ten years to make up for the two decades of lost economic growth and lift the country above its regional counterparts. Finance and Economic Development Minister Patrick Chinamasa believes the progress registered by Zimbabwe’s regional competitors during the period of economic instability up to 2008 is not out of reach.
“We need to catch up on our time considering that we have lost a good 20 years over issues of resolving the land question. So we need to catch up and for that to happen we need to grow consistently at around 7 percent to 8 percent for the next 10 years. If we fail then we are not getting there. We have the potential,” said Minister Chinamasa.
Minister Chinamasa was speaking at a post budget breakfast meeting with captains of industry hosted by The Herald Business and the Confederation of Zimbabwe Industries last Friday.
To catch up, Zimbabwe crafted an economic policy framework to create wealth and give impetus to economic growth to ensure the country achieves its growth potential. The 2016 budget sets the tone for aspired faster economic growth. “Our growth rate is too low. At 1,5 percent this year and 2,7 percent next year. We should never be content with a Gross Domestic Product of $14 billion. It’s so little. This is why we are concentrating on the policy framework,” said Minister Chinamasa.
Apart from the policy framework, Minister Chinamasa is looking to mining to spur economic development. “As we go forward I am now looking on mining to give me the growth that I am expecting and in this regard we are pushing on increasing the production of diamonds,” said Minister Chinamasa.
As part of efforts to capacitate the mining sector, Government introduced a policy to consolidate all diamond mining companies into a single entity to bring transparency in the mining and marketing of diamonds. The policy is, however, facing stern resistance from existing diamond mining companies, but Government says it will not relent.
Minister Chinamasa said the resistance has forced Government to consider other avenues to exploit the gems. “We have agreed with Minister of Mines and Mining Development (Walter Chidhakwa) that we must forge ahead with our own efforts. We are now consolidating three concessions, Marange Resources, Kusena and Gye Nyame into one company.
“We are going to proceed to exploit diamonds on the three concessions and we have already acquired necessary machinery from Belarus. So I am expecting to see a leap in our production of diamond carats from the current three million carats to about six to seven million carats next year,” said Minister Chinamasa.
Value addition and beneficiation is critical in Government’s plans to secure consistent economic growth rates. This is especially important now that China, the major consumer of commodities, minerals, is undergoing an economic slowdown. The decline in the prices of commodities due to the slowdown in China means that producers of commodities are also exposed.
Zimbabwe, being one of the major producers of minerals is also vulnerable to that decline. This has forced Zimbabwe to expedite the process of value addition and beneficiation to minerals to break ranks with countries which are primary producers.
Already, Government has implemented a number of measures in the diamond and gold sectors which have started paying dividends. Aurex Diamonds (Pvt) Limited, a subsidiary of the Reserve Bank of Zimbabwe, is now cutting and polishing diamonds mined in the country, after their compulsory cleaning to improve their quality.
“I am happy to say that Aurex Diamonds has already acquired state-of-the-art equipment from India,” said Minister Chinamasa. With respect to platinum, Government has agreed with platinum producers a roadmap on the base of which they are going to move from concentration to base metal and ultimately to refinery.
“Concentration gives them 25 percent purity; the next level is to do 50 percent and then 75 percent. I told them that I am keen to get them to 75 percent. They must put in the necessary infrastructure to refine platinum by the end of next year, in the case of Zimplats which is already doing 50 percent. So on platinum we are okay and on diamonds we are on course,” said Minister Chinamasa.
On gold, measures to increase production of gold and marketing of value added products have also started bringing rewards. Minister Chinamasa hopes increased chrome ore exports which resumed three weeks ago will contribute significantly to economy growth. “So I am expecting to see exports of chrome ore contributing meaningfully not only to the fiscus but also to growth,” said Minister Chinamasa.