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Productivity across industries must buttress optimism from the auction system

Guest Column:Andrew Lampard THE preliminary outcome of the foreign currency auction system and other supportive measures introduced by the Reserve Bank of Zimbabwe (RBZ) in June this year has been largely positive and inspiring, thus renewing many people’s belief and hope in the local economy. That said, Zimbabweans should remain mindful of the sobering reality that no successful nation on earth can trace its success to monetary policy alone or even monetary and fiscal policies on their own. Without taking anything away from the RBZ governor’s recent monetary policy pronouncements that introduced a number of positive measures geared at supporting and sustaining the forex auction system into the medium and long-term, more is required if this platform is to continue to survive. History has proved that no amount of monetary policy or fiscal policy interventions alone can sustain an economy in the absence of supportive and coherent supply-side policies in key clusters of the economy such as agriculture, mining, manufacturing, tourism and other service sectors. In other words, no matter how much allocative efficiency the auction may achieve, its sustenance needs the real sector to produce for both export and domestic consumption. The auction system is only relevant to the extent that exporters are doing their part in earning forex while those producing for domestic consumption are completing the equation to minimise imports. Monetary and fiscal policy stabilisation measures such as an efficient forex market, monetary restraint and fiscal consolidation cannot replace the need for Zimbabwe to address the long-standing structural disequilibrium problems in the economy. This is important to provide a sound footing for sustainable economic recovery and export growth. While the commendable progress made on the monetary and fiscal fronts is beginning to bear fruit, other arms of government and the private sector now need to step up their acts and support the efforts by the fiscal and monetary authorities to close the supply gaps in the economy, reduce the import bill as well as increase exports. To be precise, in addition to monetary and fiscal policies, Zimbabwe requires coherent industrial and trade policies to support its precarious balance of payments position. Furthermore, key sectors such as mining and agriculture should also come up with specific, practical and growth-focused sectoral policies to enhance their optimum contribution to exports in particular and output in general. For the private sector, there is a fine line separating lobbying authorities to put in place a conducive, macro-economic environment and literally asking authorities to fix defective corporate strategies through inefficient support measures. At the end of the day, it is companies and not governments that compete on the global arena. The private sector, for it to stand true to its description as the engine for growth, has to be innovative, astute and long-term growth focused at firm level instead of focusing on short-term lobbying outcomes such as t

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