Prof Ncube further projected that the progress will be
sustained as next year’s economic growth rate will be at 5,4 percent,
consistent with President Mnangagwa’s vision of an upper middle-income economy
by 2030.
This year, Zimbabwe is expected to outperform its peers in
the Sub-Saharan region, whose economic growth rate has been projected at 3,4
percent up from the initial 3,1 percent.
Despite the debilitating effects of Covid-19, progress has
been unrelenting in a number of sectors, with agriculture poised to achieve a
record 34 percent growth this year.
The country is set to achieve a record harvest of 2,7
million tonnes of maize following a good rainy season and Government programmes
such as Command Agriculture, Pfumvudza/Intwasa as well as the Presidential
Inputs Support Scheme.
This will see the country eliminating costly food imports
that gobbled around US$200 million last year.
The country has seen an increase in diaspora remittances
with US$746, 9 million received from January 1 to June 30 this year, a jump of
over US$500 million in comparison to US$288,7 million received during the same
period last year.
Remittances are projected to continue to drive the current
account surplus in 2021, with an end of year projection of US$1,3 billion.
Presenting the Mid-term Budget Review to Parliament on
Thursday last week, Prof Ncube said economic recovery is on course.
“Despite the raging global pandemic, implementation of the
NDS1 through the 2021 National Budget remains on course, following a favourable
farming season, recovery in manufacturing sector and firming international
commodity prices. The Covid-19 response measures, coupled with the vaccination
exercise currently underway globally and domestically, continue to give hope in
sustaining the economic recovery.
“Now that the macro-economic environment is stable, the
Government will continue to safeguard these gains to ensure improvement in the
socio-economic well-being of citizens. Therefore, let’s focus on building
resilience and recovery of the economy in the middle of this Covid-19 storm.”
Last year, inflation was a thorn in the flesh for the
economy, but authorities have implemented measures that have considerably
reduced the rate in the increase of price of goods and services from 837
percent in July last year to 106 percent by June this year.
Prof Ncube said the Government will continue to pursue
policies that contain inflation.
“Fiscal and monetary consolidation measures being
implemented by the Government to date, have managed to firmly anchor inflation
expectations as shown by a significant decline in inflation from 837,5 percent
in July 2020 to 106, 6 percent in June 2021. The July year-on-year inflation is
56,37 percent and 2,56 percent for month-on-month inflation,” he said.
“Annual inflation is expected to decline further by end of
August 2021 and down to between 22 percent and 35 percent by December 2021.”
There is a positive outlook for the mining sector, as
prices of metals are projected to rise by almost 30 percent in 2021 with Prof
Ncube noting that this will be “driven by growth from stimulus measures and
easing of supply constraints”.
Tobacco output is projected to increase by 8 percent to 195
million kilogrammes this year compared to 184 million kilogrammes recorded in
the 2019/20 season.
Of significance is that the average price of tobacco is
higher by 11 percent at US$2,77 per kg compared to US$2,44/kg paid during the
previous season.
Prof Ncube projected the manufacturing sector to grow by 7
percent this year, with gains across sub-sectors like foodstuffs, chemical and
petroleum products, drink and tobacco, as well as non-metallic mineral
products.
The country has enhanced the implementation of
infrastructural projects that have brought tangible benefits to communities
countrywide, including improvements in services such as health, education,
roads, water and sanitation, largely due to the devolution programme.
In an interview with The Sunday Mail yesterday, economist,
Professor Gift Mugano, gave the thumbs-up to Prof Ncube’s growth projections.
He forecasted that more Foreign Direct Investment will flow
into the country.
“I strongly agree with the Minister’s views because for the
last two years we had an economic recession because of drought and Covid-19.
However, because we are building from a lower base, chances are high that our
economy is improving because there is good production from the agriculture
sector.
“This helps us as a country to save foreign currency as
well as raw materials. Also the stability we have had in the country since June
last year to date also allows companies to reinvest. In 2019, companies
struggled with cashflow due to inflation but now they have confidence to plan
ahead. Stability and growth attract investment, so we should see more FDI.”
Another economist, Mr Kingstone Khaniye, said: “In terms of
economic growth we consider three things: achieving macro-economic stability,
growth of the economy and managing local production, which is the key point. As
we can all see, inflation is now under control and there has been a management
on the foreign exchange (RBZ auction system). The budget review was indeed an
encouraging report for the growth of our country.” Sunday Mail
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