Zimbabwe is expected to register an average economic growth rate of 5 percent over the next three years, benefitting from a stable exchange rate and lower inflation rates, Finance and Economic Development Professor Mthuli Ncube has said.
In his 2024 Budget Strategy Paper, Prof Ncube projected the economy to expand by 5,2 percent next year and 5 percent in 2025 and 2026; all above the National Development Strategy 1 (NDS1) annual average targets. Prof Ncube is also targeting annual inflation rates of 39,2 percent 11,5 and 8,3 in 2024, 2025, and 2026 respectively.
“The 2024 macro-fiscal framework seeks to sustain this positive economic growth trajectory, through among others, stabilising the exchange rate and achieving lower inflation rates, addressing the high national input costs and low productivity levels affecting the competitiveness of domestic products and sustaining a positive external sector balance,” said Minister Ncube.
Furthermore, implementation of the Cabinet-approved Public Entities Recapitalisation Programme will be given new impetus, given their strategic role as both enablers and providers of essential goods and services to the economy,” he added.
This year, economic growth is projected at 5,3 percent, higher than the initial target of 3,8 percent on the back of improved farm output and investment in the mining sector.
Strong agricultural output saw a record tobacco output during the current 2023 marketing season, now at 295 million kilogrammes, surpassing the previous record of 259 million kg in 2019 and following on record wheat output of 375 000 tonnes last year.
“Equally transformational is Government’s thrust to fully exploit, value add and beneficiate the country’s mineral resources, which is being felt through increased investments, production and exports,” said Minister Ncube. “Transforming the economy is expected to accelerate long-term growth and overall competitiveness of the economy, enhance industrialization and value of export receipts, broaden sources of local content, and create opportunities for decent jobs.”
Minister Ncube said public infrastructure investment has markedly increased, largely using domestic resources as external sources remain inaccessible given the country’s external debt arrears position.
To meet the ever-increasing demand for infrastructure services from a growing economy, the minister said, there was need to mobilise new financing resources into this sector that are sustainable and long-term to minimise the negative impact of budgetary resources on economic stability.
Minister Ncube said the 2024 and 2025 budgets would be used as policy tools to implement the remaining part of the NDS1. Among the targets of the budgets are single-digit inflation and a market-determined exchange rate.
They also aim to scale up domestic resource mobilisation to fund NDS1 projects and to speed up the implementation of the state-owned enterprises’ reform strategy.
The Treasury will also be looking at deepening financial inclusion and enhancing national savings mobilisation, accelerating the implementation of the Zimbabwe Arrears Clearance Debt Relief and Restructuring Strategy to unlock new concessional funding as well as accelerating the implementation of ease of doing business reforms.
In addition, the focus would also be on upscaling youth and gender mainstreaming initiatives, intensifying production and productivity of strategic crops and land utilization, addressing growing environmental challenges and improving biodiversity health, increasing tourist arrivals as well as tourism receipts; and improving national competitiveness, value addition and beneficiation.