THE country’s economy is on the rebound due to the recovery of the productive sector backed by the expected bumper harvest and increased prices of minerals on the international market.
The development is expected to improve the cash situation. Reserve Bank of Zimbabwe Governor Dr John Mangudya told our Harare Bureau yesterday that the current cash shortages were a result of traders who were reluctant to deposit their daily takings to the banks which is a violation of the Bank Use and Promotion Act. However, Dr Mangudya said the situation was going to improve soon due to an envisaged bumper harvest and export of minerals like gold, chrome and platinum.
He said most productive sectors of the economy were picking up with packaging and food industry also experiencing an upward turn. The country is importing money to satisfy the domestic market and fund the productive sector and this has put pressure on the foreign currency.
“As our productive sectors expand we are looking forward to more exports and reduce our imports because most of the raw materials will be available in the next month or two. Our economy is on the rebound and almost every sector is picking up backed by the harvest and the mineral exports.”
Governor Mangudya said the ongoing tobacco auction and the selling of maize and cotton among other agricultural produce were expected to improve liquidity crisis. The economy has for years been backed by agriculture and the bumper harvest will ensure reduction in importation of raw materials.
“With the SI 64 in place obviously we are going to consume more of our produce because already the raw materials are there, this means they will be reduced pressure on the forex. We are also ensuring that traders comply with our laws by banking their intake daily, this will mean more money will be circulating in the economy thereby reducing the cash shortages,” he said.
Last week Finance and Economic Development Minister, Patrick Chinamasa said Government will withdraw trading licences for businesses that are failing to deposit their daily sales with the financial institutions.
He said Government was crafting a legal instrument to empower authorities to withdraw licences from businesses which do not to comply with the Bank Use and Promotion Act. The minister said money should circulate to deal with the current cash shortages.