Mnangagwa addresses Parliament, tackles currency ...

Mnangagwa addresses Parliament, tackles currency stability, inflation, and drought impact

Oscar J Jeke

Zim Now Reporter

President Emmerson Mnangagwa, Wednesday delivered his State of Nation address for the opening of the Second Session of the 10th Parliament, where he placed emphasis on Zimbabwe's economic challenges and government efforts to stabilize the economy. Key focus areas included the country’s response to inflation, currency issues, and the devastating effects of the ongoing drought.

President Mnangagwa highlighted the government's proactive steps to stabilize the domestic currency, with the introduction of the Zimbabwe Gold currency in April 2024 being a significant milestone. He said the currency, backed by gold and precious metals, was designed to anchor the economy and curb inflationary pressures. "Currency stabilization is at the core of our macro-economic stability," the president remarked, pointing out that the initiative would protect Zimbabwe from erratic exchange rate fluctuations.

The president also noted that greater flexibility has been introduced into the foreign exchange market, allowing for a "willing-buyer, willing-seller" system to encourage better price discovery and increase foreign exchange inflows. This system is centred to address foreign currency shortages, with inflows from exports increasing to $8 billion in 2024 from $7 billion in 2023.

In a bid to tackle the resurgence of speculative parallel market activities, which have been blamed for exacerbating inflation, Mnangagwa reassured citizens that the government is taking corrective measures to prevent economic disruptions caused by these practices.

The president also addressed the severe drought, brought on by the El Niño weather pattern, which has significantly affected Zimbabwe's agricultural output. While the drought has constrained growth in the agriculture sector, the government has ramped up its food security initiatives. Under the Food Deficit Mitigation Programme, rural areas are receiving grain, and vulnerable urban households are benefiting from the Cash-for-Cereals Programme.

Mnangagwa stressed that the government’s support includes the provision of school meals in drought-hit areas and the establishment of agro-shops through the Grain Marketing Board to ensure the availability of affordable food in rural communities. He also highlighted the progress of the Presidential Borehole Drilling Programme and the establishment of 35,000 Village Business Units to enhance household-level food security.

Despite these challenges, Mnangagwa projected a record wheat harvest of 600,000 tonnes from the 2024 winter crop, thanks to government support for farmers and climate-proof agricultural schemes.

In closing, the president reiterated the government’s commitment to ensuring that no Zimbabwean would go without food, emphasizing that resilience and unity will be key to overcoming the impacts of climate change and economic instability.