Production incentivises price stability #Zimbabwe 2020 Economy Updates

Augmented production in the manufacturing sector will further consolidate price stability in the market while stimulating economic growth.


In Zimbabwe Prices of basic commodities have stabilised over the last two months, attributing the development to mediations introduced by government to quell financial indiscipline and rent-seeking behaviour. The measures include the establishment of a foreign currency auction system in June, which has seen Zimbabwe enjoy relative stability. Other measures include tighter control on mobile money platforms, which were being used to facilitate foreign currency trading on the black a result, prices of essentials/ basics  such as cooking oil, sugar, rice and bread in most retail outlets, which had been volatile since the reintroduction of the local unit, have stabilised. Correspondingly, production is on the up.

AEDS Executive Director the leading economist in Zimbabwe Professor Gift Mugano is calling on government to further refine its policies to stimulate production and ensure long term price stability. Government recently introduced the “PFUMVUDZA PROGRAMME” in agriculture, which is a very noble programme. If articulated well, the programme will indeed ramp up production in the agriculture sector, for instance, production of soyabean means an increase in the production of cooking oil, production of cereals and this will save a lot of foreign currency. This will lead to the right pricing regime and availability of the product and stop foreign currency leakages. We need aggressive manufacturing and industrial policies that will see production of goods at a large scale and ultimately lead to exports.

We need to support the productive sector and have in place production policies that stimulate manufacturing. This will help with price stabilisation and product availability in the long run.