'Zimbabwe economy on growth trajectory'

Published: 06 July 2018

RESERVE Bank of Zimbabwe (RBZ) Governor Dr John Mangudya yesterday said the economy is on a positive growth trajectory as evidenced by increased capacity utilisation and surging demand for fuel.

Dr Mangudya said this during the official launch of the EmpowerBank, a youth focused deposit taking microfinance institution.

EmpowerBank was launched by President Emmerson Mnangagwa. Dr Mangudya said the economy is growing, particularly since November last year when President Mnangagwa was sworn-in.

"The economy is on a positive growth trajectory. Most of the companies are growing, from food processing . . . to fuel distribution, we have seen the economy going forward.

"There is very positive growth. Business confidence has significantly grown," said Dr Mangudya.

Due to economic growth, demand for foreign currency to process foreign payments has sky-rocketed resulting in some manufacturers and miners queuing for long until their payments are approved by the RBZ.

The beverages sector, which has seen a top firm - Varun Beverages Limited - starting to produce locally, now has more players resulting in massive demand for foreign currency.

Varun Beverages is the world's second largest franchisee (outside the United States) of carbonated soft drinks and non-carbonated beverages sold under trademarks owned by PepsiCo. Its products have already taken the market by storm due to low prices.

Dr Mangudya also recently said the RBZ plans to increase foreign currency allocations for fuel importation in the second half of the year to about $100 million per month to meet demand.

Between November and December, the country is set to increase monthly allocations for fuel to $101 million, from $88,8 million used in May.

Meanwhile, Dr Mangudya said EmpowerBank is expected to play a key role through reaching out to youths in the low income groups including those in the rural areas and "hard-to-reach" remote areas.

This is because access to finance has a "significant impact" on people's livelihoods, in addition to stimulating economic growth, said Dr Mangudya.

"Already, the RBZ has established a number of empowerment facilities amounting to $451,51 million to benefit various priority groups including youths. It is expected that EmpowerBank would tap into some of the empowerment facilities rolled out by the RBZ for the common good of youths and the nation.

Dr Mangudya said EmpowerBank should take advantage of the vast opportunities available in the agriculture, tourism, manufacturing and mining sector.
- the herald

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