Zimbabwe’s competitiveness is being weighed by inflation, the exchange rate crisis, Covid and price instability.

This is according to the country’s National Competitiveness Commission’s (NCC) annual Zimbabwe Competitiveness report for 2021.

Director of the NCC Brighton Shayawenako said Zimbabwe has fallen down the global competitiveness rankings, even trailing regional peers, Rwanda and Botswana.

“Yes we have an auction system, but it has its own challenges such as delays on disbursements which affect cash flow,” Shayawenako stated.

“Exchange rate dynamics, driven by parallel market developments, price hikes and the anticipated emergence of new COVID-19 variants were threats to the relatively stable macroeconomic environment and competitiveness in 2021.”

The report states that around 40% of allocated funds on the auction market are for raw material imports, impacting productivity and competitiveness.

In addition, the use of parallel market rates affected Zimbabwe’s competitiveness, NewsDay reports.

The NCC director added that the small range of primary products for exports was predominantly in mining and agriculture, with a substantial import bill triggered by fuel, electricity, food and manufactured goods.

“There is also a huge infrastructure deficit, power shortages and bad roads. Erratic power supplies have industries relying on diesel. There is need for macroeconomic stability driven by interventions by monetary and fiscal authorities.

“There is need for an efficient exchange rate system to ensure timeous disbursements of foreign currency and to invest in power projects,” he said.

“Service providers for utilities should charge cost reflective tariffs that ensure viability and attract investment in power generation to enhance reliability,” Shayawenako added.

Furthermore, the minister of Industry and Commerce, Sekai Nzenza said Zimbabwe becoming a middle-income economy by 2030 was closely linked to competitiveness.

“Enhancement of competitiveness improves global rankings. We are focusing on increasing local production to achieve price stability and lowering of prices,” Nzenza stated.