ZIMBABWE is failing to take advantage of the current global demand for mineral resources whose earnings have the potential to revive its ailing economy, World Bank country economist, Seedwell Hove has said.
REPORT BY MUSA DUBE
Hove said Zimbabwe was failing to fully exploit its resources that are in abundance, in order to revive its struggling economy.
“The 2009-2011 re-bound has seen a marked growth in mining in the country. Although still recovering, the country was not able to take full advantage of the global boom in mining prices,” said Hove. “Zimbabwe should take advantage of the current wave of high demand for natural resources to foster a new wave of industrialisation and structural transformation.”
Speaking in Bulawayo during his presentation entitled, Unleashing Growth Drivers and Creating the Linkages that Build Value in the Zimbabwe Economy, Hove said the country had great potential to develop from its abundant natural resources if they were fully explored and exploited.
“The mining sector has potential for autonomous growth and there is need to leverage on the mining sector as the key driver to support the whole economy. Given lack of exploration, infrastructure weakness, and current persisting uncertainty, there might be no major increase in activity in the medium run,” said Hove.
He said mineral resources such as gold, coal and chrome had the higher potential of absorbing new investment.
“The mining sector is capable of autonomous growth in the current recovery of the economy. The manufacturing sector can be more dependent on internal demand generated by the mining and agricultural sector,” he said.
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“Policies in the mining sector are key to Zimbabwe’s growth in the medium term as they may have downstream effects on other sectors if linkages are strengthened,” he said.
The World Bank official said the mining sector could also help increase domestic savings and accommodate increased flows of imports for capital goods.
“There is need to deal with bottlenecks in economic transformation, for example infrastructure, institutions and business environment, and align them to international best practice,” he said.
He said the agriculture sector also had potential for rapid recovery and “transition to rapid agricultural growth if the current super-cycle of international prices continues”.
He added that the new small-holders sector required temporary stronger support to unlock its potential.
Deputy Prime Minister Arthur Mutambara recently said Zimbabwe’s mining sector has continued to be the lead in economic performance, contributing an estimated 16% to GDP in 2012, up from 13% in 2011.
He said the sector also continued to lead in export earnings, rising to US$2 billion in 2012, from US$1,8 billion in 2011.
