By Staff Reporter
The Zimbabwe National Chamber of Commerce (ZNCC) president Tinashe Manzungu has said to save the country’s economy to slide into a full scale recession post Covid-19 there is need to establish a Post Covid Economic Recovery Strategy.
Manzungu in an interview said ZNCC is currently engaging government to establish the strategy as most businesses in the country have taken a knock due to Covid-19 impact.
“With no doubt, the coronavirus (COVID-19) pandemic has brought unforeseen challenges for businesses and access to reliable information is one of the enablers that will see companies survive.
“It is more challenging for businesses that are export oriented as closing of borders and restricted movement of persons is making it difficult to supply.
“With more and more people staying at home and disposable incomes going down, demand of products has gone down, especially those that are not considered essential or basic. Demand across the world of exotic products such as high-end fashion and electrical gadgets has fallen drastically,” Manzungu said.
As shock absorbing measures Manzungu said there is need of coming up with a post recovery strategy.
“We are engaging the Government as a key stakeholder to establish a Post Covid Economic Recovery Strategy to address demand and supply side impacts so that we prevent the businesses from sliding into a full scale recession and withstand similar shocks in the long run,” he said.
Manzungu explained that digitalisation is the way to alleviate the impact of Covid
“So we are launching a training school where one of its goal is to educate business people how to fit into the new normal and accelerate the digital economy and participation in the Fourth Industrial Revolution.
“We recommend that Govt develops a comprehensive and coherent Digital Transformation Strategy with key stakeholders,” he said.
According to the World Trade Organization, global trade is expected to plummet by 37 percent, and this will see the slow progress of Zimbabwe’s efforts to increase exports.
“Zimbabwe has been highly affected by these measures as our major exports are commodities and most not classified as essential goods in traditional export markets,” he said.
Meanwhile, “Some local companies have noted challenges in acquiring raw materials into the country,” Manzungu said.
He added that the cause maybe that source country will not have classified raw materials as essential but which might feed into our economy as within essential streams
“There is urgent need for diplomatic intervention to engage the source country and advise them that these raw materials feed into our essential services,” he said.
Going forward, Manzungu said there is need to be inward looking.
“Whilst the Government can assist manufacturers to source raw materials, one lesson from the COVID-19 pandemic is that there is need for companies to engage local suppliers.
“This can be easily attained if players in the entire value chain can organize themselves and come up with strong supply chains,” he said.
The ZNCC president said the Covid 19 Pandemic has brought about liquidity shock that entails massive portfolio shifts from riskier assets to safer liquid assets. “For Zimbabwe economy that implies capital outflows, a possible increase in their costs of funding. SMEs have little working capital and limited lines of credit whereas they play an important role as a source of entrepreneurship abilities, innovation and creation of jobs. The informal sector contribute to about 60% of the country’ GDP sizeGiven the banks credit bias against SMEs a credit guarantee should be putin place for SMES,” he said.