Econometer report divorced from reality

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AN economic research firm, Econometer Global Capital recently released its 2015 economic outlook report which spelt doom for Zimbabwe.
The pessimistic report titled ‘2015 through the Windscreen: gauging the public mood’ said the country’s economy was ‘collapsing’.
It said 68 percent of Zimbabweans are of the opinion that the nation is headed in the wrong direction.
“For every five Zimbabweans, four are of the belief that the economy will worsen in 2015,” reads part of the report.
“It appears that their forecasts were inspired by both the national budget as well as the political and economic developments at both macro and meso levels.”
After glancing through the report, one can be pardoned for dismissing it as a hastily done research as it is marred with basic grammatical and mathematical errors.
Its structure and content makes one wonder if Econometer global capital is a credible research firm.
It is said to have regional offices in South Africa, Zambia and Zimbabwe.
Given the recent economic developments, the report has, however, been dismissed by many as a poor attempt of manipulating public opinion.
The report disregarded the Chinese and Russian mega deals signed last year with head of research of the firm, Christopher Mugaga describing the Chinese and Russian deals as a pie in the sky.
Yet mega power deals sealed by President Robert Mugabe in China last year have taken off, with construction already underway at key projects.
China Export and Import Bank disbursed advance payment of US$80 million to Sinohydro for generation capacity expansion of Kariba South Power Station.
As a result, manufacturing of turbines and generators has started in China.
The Kariba South expansion project is estimated to cost US$533 million and is to be completed in 40 months.
It will add 300 megawatts to the plant’s current capacity of 750MW.
Furthermore, Sinohydro also contracted to expand Hwange Thermal Power Station at a cost of US$1,1 billion is mobilising on site to do ‘pre-commencement works’, while Government officials are soon expected to leave for China to finalise funding for the project.
While China Africa Sunlight Energy (CASECO), which won the bid to construct the billion dollar Gwayi-Shangani Thermal Power Station, has completed clearance work on site, with actual construction expected to commence in July.
These four projects will add 1 500MW to the national grid to surpass the deficiency of 1000MW bringing to an end a decade long deficit of power that has been stifling manufacturing, agriculture and the mining industry.
Another major economic development ignored by Econometer is the US$3 billion Zimbabwe-Russia Darwendale project which kick started in September last year.
The platinum project set to produce 250 000 ounces of platinum annually over the next 36 months is expected to create 15 000 jobs in 10 years.
The first phase of the exploration process, which entails the drilling of over 400 000 square kilometres, is underway with the final results expected in the next 12 months.
So far, the investors have injected US$4 million into the project and more funds are expected for the exploration process.
Hence for one to say these deals are a pie in the sky and cannot be used as an economic indicator is narrow-minded.
The Chinese and Russian deals are not mere agreements; they are key investment projects set to take this country to economic prosperity.
Of course, the benefits such as significant inflows of Foreign Direct Investment (FDI) and technology, high levels of direct and indirect employment, and increase platinum and revenues will not be instantaneous as mining by its nature is a long term business.
Such projects require patience and perseverance that is why those who seek instant gratification will easily dismiss them.
Furthermore, it is startling that the Econometer report jam-packed with negative perceptions came out days before the New York Times Travel which recognised Zimbabwe as one of the world’s 52 places to visit in 2015
According to the NY Times Travel, Zimbabwe is on the path to economic revival, with the country’s vigorous tourism marketing strategies set to kindle economic growth.
“This country’s beauty and bounty have been overshadowed by political unrest and economic collapse over the last few decades, but today, the government is finally stable, the over-inflated Zimbabwean dollar is gone, and the prices are low,” said the NY Times.
The list comes after the country was voted the World Best Tourist Destination for 2014 by the European Council on Tourism and Trade.
While Europe and America have finally admitted that Zimbabwe is on the road to economic prosperity, some local organisations like Econometer still believe the country’s economy is ‘crumbling’.
Such negative perception coming from within is hindering economic development.
There is too much negativity around the country with the current liquidity crunch being overplayed.
Appearing before the portfolio committee on Finance and Economic Development last year, Reserve Bank Governor Dr John Mangudya said Zimbabwe’s economy was not anywhere near collapsing with the liquidity challenges being experienced not as tight and gloomy as some quarters would want to portray
“This economy is not as illiquid as it is said, but what is there is that the negative perception is high,” he said.
Consequently the onus is on the country to lead perception management and project the country in good light so that the rest of the world can follow suit.
It is time Zimbabweans adopted a positive outlook on their country and future.
The agriculture sector indicates strong signals of a bumper harvest with maize, tobacco, sugar, horticulture and dairy to contribute much more significantly as compared to last year.
Last year the country’s harvest for maize rose by 82 percent to 1,46 million tonnes, enough to meet annual domestic needs for the first time since 2003.
Tobacco output surpassed the target of 180 million kilogrammes as 211 million kilogrammes of flue-cured tobacco was sold at US$615 million compared to the 166 million sold during the same period last year.
The tobacco industry has become one of the fastest growing sectors to recover from the economic meltdown of the past decade accounting for 10,7 percent of the country’s Gross Domestic Product (GDP).
Tobacco exports are expected to show a further increase for the fifth successive year, a development that bodes well for the economy.
With these developments happening in an economy perceived to be ‘collapsing’, there can only be reasons for Zimbabweans to start believing again.
Thus the Econometer Global Capital report leaves a lot to be desired.

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