Finance Minister Patrick Chinamasa yesterday said prolonged dry spell that has hard hit all the country’s provinces has worsened the country’s struggling economy.
The country which is clearly in a dire need of a bumper harvest to alleviate the malfunctioning economy had its hopes tumbling as the dry spell continues.
Addressing a programme for the wrap up meeting and dialogue at the conclusion of the first review of the International Monetary Fund Staff Monitored Programme, the Minister of Finance revealed that inadequate rainfall has worsened the economic challenges that the country is facing.
“The current economic environment is challenging and to make matters worse we did not have a good rainfall season
“When in optimistic I say its half drought half rainfall and when I’m pessimistic I say its 75 drought and 25 rainfall,” said the Minister.
Zimbabwe’s agricultural sector has long been vital to its economic stability and growth. Not only does it form the basis of the direct and indirect livelihoods of almost 70% of the population.
Economic growth which is directly linked to the performance of the agricultural sector is under threat as crop production dwindles.
According to a Development Bank of Southern Africa report entitled: Zimbabwe’s Agricultural Reconstruction: Present state, Ongoing Projects and Prospects for Reinvestment, the economic performance of Zimbabwe rests mainly on agriculture, mining and the manufacturing industry, with agriculture contributing about 20% of gross domestic product (GDP).
Speaking at the same event, Mr. Domenico Fanizza, who was heading The IMF mission in the country to conduct the first review under the Staff Monitored Programme which was approved late last year noted that the country’s economic prospects remain difficult.
“Economic prospects remain difficult. Growth has slowed down and we expect it to weaken further in 2015.
“Despite the favourable impact of lower oil prices, the external position remains precarious and the country is in debt distress,” said Mr Fanniza.
Moving forward, the IMF delegation called on the government to restore confidence in Zimbabwe’s financial sector.
“A sound operational framework for the Zimbabwe Asset Management Company (ZAMCO) is key to freeing the banking system from the burden of high non performing loans that limit the bank’s ability to extend credit to the private sector and keep the cost of credit high,” he said.
As a way forward the country was also recommended to improve the investment climate.
Photo credit: www.telegraph.co.uk