Zimbabwe: Economists Pin Hope On Rainy Season

Aliyu Adekunle S/Vanguard File photo: The rains have caused widespread damage to roads leaving some areas impassable.

By Fradreck Gorwe,

Economists and industrialists have pinned prospects for enhanced volumes performance by companies this year on the adequate and good rainy season as well as increased incomes across various sectors of the economy.

The discernible trend across most companies’ trading updates in the 2019 trading period was high turnover but subdued volumes.

Most firms attributed the scenario to high-inflation and low disposable incomes.

With low volumes having been prevalent, companies fear a possible recurrence of the misfortunes in 2020, triggering questions about the sustainability of business going forward.

The anxiety was further propelled by not so good initial rains following the recent long dry spell that had an unwelcome effect on business.

Zimbabwe is an agro-based economy as the agriculture sector contributes about 16 percent of its Gross Domestic Product (GDP), 60 percent of raw material used in the production of goods and employs about 70 percent of the population.

Further, agriculture contributes about 40 percent of Zimbabwe’s export earnings while the sector is the main source of revenue for producing companies since sound harvests boost customers’ disposable incomes.

Against this background, economists have pinned hopes of success in 2020 on a good rainy season while at the same time asserting that volumes growth will depend on review of remunerations across all sectors of the economy.

Economist Eddie Cross stated that declines of volumes in 2019 were a result of necessary and inevitable decisions as the Government implemented austerity to get rid of the fiscal deficit. Read more…

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