eBusiness Weekly
Finance Minister Patrick Chinamasa yesterday presented his annual budget review which projected a five-fold increase in the economic growth rate in 2017 from a near negative rate of 0,7 percent last year. The projected rate of 3,7 percent is anchored on agriculture which is expected to grow 21,6 percent. However a number of elephants in the room should be dealt with. These (elephants) challenges have potential to affect all the work that has been put in by Government, the private sector and development partners.
Minister Chinamasa summarised the challenges as a stubbornly high wage bill, government expenditure overruns and, more importantly a deficiency of capacity to summon political will to implement several proposals put forward by various economic actors.
Overall the country needs a cocktail of measures on the fiscal and monetary front in addition to some acceptance of the economic realities. While emphasis in the past by both Minister Chinamasa and Reserve Bank of Zimbabwe governor Dr John Mangudya has been on improving productivity, Zimbabwe also needs to attract foreign direct investment. This is key because cash inflows will improve the liquidity situation, up capacity utilisation, grow exports and create jobs in the mid-long term. Once the economy is kicking, contributions to the fiscus will definitely improve and deal with most of the problems that the economy is currently facing.
Agriculture is an industry of major proportions which carries the bulk of national income and the labour force but it is presently operating at low levels of productivity. While there has been tremendous improvement over the past year, there are still a lot of loose ends that need to be tied up.
No doubt, to put the economy on a growth trajectory, there is need for heavy investment in agriculture. But more importantly the first step before anything else is to encourage the youth, who at this particular point in time now view agriculture as a 19th century economic sector. And the only way to do this is to mechanise so that the youths see it as a worthwhile venture and not just a job for the poor and retired people.
This perception of agriculture can only change if government begins to reintegrate, educate and empower the younger generation on mechanized and industrial farming. How many youths are actively participating in this sector?
Generally when you are allocating resources there are a number of ways that you can do it. You have to answer three questions; what to produce, how and for whom? In a traditional setup you produce what you have always produced, as you have always produced and for whom you have always produced. But when it’s a market or capitalist system which Zimbabwe falls under; you produce what is profitable to produce, so goods whose prices are rising are the ones that are produced; how – you use a method which uses the least cost of producing those goods and for whom – means goods are produced for those who can afford them.
According to Minister Chinamasa, Government interventions, with the support of the private sector, through the Special Maize Production Programme, complemented by the Presidential Vulnerable Household Input Scheme, targeted higher hectarages to realise maize production upwards of 2 million tonnes.
This is against a domestic grain requirement of 1.8 million tons for both human and livestock consumption. Subsequently, a total of 1 875 297 hectares were put under maize during the 2016/17 farming season, with the results of the National Second Crop Survey indicating maize output of 2.2 million tonnes, as well as small grains yields of 0.5 million tonnes. Its important to reiterate that agriculture cannot be done on subsistence level and therefore the move to target special growers under Command is to be commended.
However questions arise on how the success of agriculture is being monitored and measured? According to Minister Chinamasa Government has teams closely monitoring utilisation of inputs and farming activities with a view of ensuring the success of the Command Agriculture Programme in terms of yields and capacity for loans repayments. But using only yield and capacity for loans repayment is a limited way of measuring success of something. It would also be important to look at cost, efficiency and value for money. It cannot be enough to be looking at an increase based on capacity for loans repayment and yield although the two measurements are also important.
Firstly what is the cost of producing maize and are we getting the value of money for the product that we are getting? It would be unwise to allocate resources and capital without having elevated knowledge on whether its allocations will find utility in the impulses and sentiments of economic stakeholders. Consistent with this premise is that Government must ensure as best as it can that its policy manages positive exploitation of predominant impulses and sentiment of economic stakeholders. It would be proper to produce.
The Minister made reference to timely preparations being central to enhancing agricultural productivity and, ultimately, viability and competitiveness of domestic produce in export markets. This is a good point but in practice it is not visible how agricultural productivity is being enhanced and how competitiveness is being realised.
Government is replicating the Special Maize Production Programme by extending it to other crops, such as wheat and soya beans, as well as the livestock sector. Starting with the 2017/18 agricultural season, ‘Command’ maize, ‘Command’ wheat, ‘Command’ livestock, ‘Command’ fisheries and ‘Command’ wildlife will, therefore, be unveiled at a total cost of $334 million. It would have been good for the programme to have been cleaned up before extending it to other crops and areas because they may be extending a programme when there is still room for improvement in terms of efficiency and cost effectiveness.
