Zimbabwean President hails robust progress made in stabilizing economy

Harare, Zimbabwe | Xinhua | Zimbabwe’s economic activity remains robust, as evidenced by strong foreign currency receipts, Zimbabwean President Emmerson Mnangagwa has said.

Writing in his weekly column Sunday in the state-run Sunday Mail newspaper on his reflections on the Reserve Bank’s 2023 Monetary Policy Statement, Mnangagwa said the country’s balance of payment position remains in a surplus position, driven by robust export performance and remittances.

“Our foreign currency receipts of more than 11.6 billion U.S. dollars serviced our external payments of about 8.6 billion U.S. dollars, thus leaving us with a healthy surplus of 305 million U.S. dollars,” said Mnangagwa. “Amidst all this good news, there are issues and concerns which we must continue to keep an eye on, and even address as an economy. First, the more than 300 million U.S. dollar positive balance between our foreign exchange receipts and our external payment commitments must continue to be monitored so they do not upset the applecart.”

He said the exchange rate has largely stabilized, putting aside temporary instability triggered by payments to farmers late last year.

“Month-on-month inflation, which peaked at 30.7 percent in June 2022, decelerated to less than 2.5 percent by end of 2022. The upward trend of inflation has now been checked, with current efforts focusing on bringing it down even much further,” said Mnangagwa.

In addition, he said Zimbabwe’s foreign currency receipts reached 11.6 billion U.S. dollars in 2022, the highest ever in Zimbabwe since its independence.

As the bulk of the transactions is now in foreign currencies as compared to the local dollar, Mnangagwa said, there might be a need to relook at the method that is used to calculate inflation to avoid stoking up negative expectations on prices.

“As the Monetary Policy Statement admits, a mere 30 percent of national transactions are reckoned in local currency. Yet our conceptualization and reading of inflation tends to be based on this small segment in the total matrix of national economic activity,” he said.

Mnangagwa noted that every gain made in stabilizing and growing the economy should translate into a better operating environment for businesses and improved welfare for Zimbabweans.

He predicted that the good rains expected this season is expected to further consolidate the economic gains made so far.

“This, alongside the extensive climate-proofing measures we have adopted as an agriculture-led economy, means we are set to have a good season, itself a key factor to our overall growth,” said Mnangagwa. “The mining and tourism sectors are doing very well, thus making our growth prospects not just good, but also quite sustainable.”