Zimbabwe's Medium Term Plan at a glance

The Medium Term Plan is Zimbabwe's national economic development strategy which responds to the mandate set out in Article III of the Global Political Agreement (GPA) to support the restoration of economic stability and growth in Zimbabwe.

It builds on the foundations laid by the Short Term Emergency Recovery Programme (STERP) (February-December 2009) and the Three-Year Macroeconomic Policy and Budget Framework (STERP II).

1.2 The MTP introduces a development paradigm that locks in the macroeconomic stability recorded so far, anchors the economy on a pedestal of sustainable economic growth, employment creation and poverty reduction.

1.3 The Plan forms a compendium of sound economic policies and national projects that can be implemented to ensure sustainable growth and development of the economy, lists programmes and projects that will be undertaken during the plan period 2011 - 2015.

1.4 This development plan will guide the national budgeting process and be mainstreamed in all subsequent sectoral strategies.

2. BACKGROUND OF THE MTP

2.1 The MTP is informed and influenced by three critical factors:

2.2 The formulation of the MTP is supported by the need for an economic blueprint that will guide the economy and direct the country's growth and development trajectory in the medium term, in line with recent experiences of rapidly developing countries like China, India and Brazil.

2.3 It will guide all Government plans and programmes beyond short-term stabilisation.

2.4 More importantly, it clearly spells out Zimbabwe's national priorities for both domestic and foreign investors and co-operating partners.

3. VISION

Enhancing a democratic developmental state anchored by a growing and transforming, socially just economy.

4. NATIONAL PRIORITIES

4.1 The following are the key priorities of the Plan:

i. Infrastructure Development - One of the key objectives of the MTP is the development of key infrastructure through the capital budget and complemented by the PPPs and other private sector driven initiatives.

ii. Employment Creation - The plan's main focus is the creation of decent jobs across all sectors of the economy and avoid the pitfalls of other economies which experienced jobless growth;

iii. Human Centred Development - The plan is human centred, so that crucial areas such as food security, education, health, housing and achievement of the MDGs will take centre stage.

iv. Entrepreneurship Development - The plan fosters entrepreneurship development as a major thrust to achieve economic empowerment, SMEs growth and indigenisation;

v. Macroeconomic Stability - The macroeconomic stability which is currently prevailing in the country will be strengthened while Government will strive to enhance the fiscal space. Restructuring and corporate governance programmes will ensure that parastatals will not be a drain on the fiscus, thus consolidating macroeconomic stability. The implementation of sound macroeconomic policies is a major thrust of the Medium Term Plan.

vi. ICT and Science and Technology Development - ICT and science and technology development will be central in the Plan, where innovation, research and promotion of a knowledge economy will be emphasised. The Diaspora will play a critical role in this regard.

vii. Good Governance - The Plan ensures good governance, focusing on the removal of sanctions, political stability, combating corruption, promoting financial accountability and sound economic governance in all the sectors of the economy.

viii. Investment Regulation, Co-ordination and Promotion - In order to ensure that the plan meets its growth targets, there is a strong investment promotion drive which will trigger financial flows into the country. A savings culture will be inculcated amongst our people to complement this investment drive.

ix. Resource Utilisation and Poverty Reduction - During the plan period, a Resource Charter will be developed which will ensure that Zimbabwe's natural resources will be used equitably for job creation, poverty reduction and sustainable economic development. The MTP will emphasise issues of resource governance.

x. Gender Mainstreaming into Economic Activities - The Plan ensures full participation of women, youth and the disabled in all sectors of the economy as well as in all economic development programmes in line with the MDGs.

5. OBJECTIVES, ASSUMPTIONS AND TARGETS OF THE MTP

5.1 The main thrust of the MTP is to maintain macroeconomic stability, restore and transform the economy's capacity to produce goods and services competitively for empowerment and poverty reduction. This will be achieved through pursuing the following major objectives of the plan:-

i. Sustainable economic growth and development;

ii. Poverty reduction;

iii. Employment creation;

iv. Price stability; and

v. Sustainable Balance of Payments position.

5.2 The underlying macroeconomic assumptions for the Plan include:

i. Improved energy supplies;

ii. Effective private sector participation;

iii. Financial stability and inclusive financial sector development;

iv. Increased access to lines of credit to improve liquidity position in the economy; and

v. Economic and social stability.

6. MTP TARGETS

6.1 The following targets are set to be achieved during the Plan period.

i. An average growth rate of 7,1 percent during the Plan period;

ii. Single-digit annual inflation;

iii. Interest rate regime that promotes savings and fosters investment;

iv. Current Account Deficit of not more than 5 percent of GDP by 2015;

v. Average employment creation rate of 6 percent per annum;

vi. Sustained Poverty Reduction in line with MDGs targets;

vii. Foreign Exchange Reserves of at least three months import cover by 2015;

viii. Double-digit savings and investment ratios of around 20 percent of GDP by 2015;

ix. Budget deficit to converge to Sadc benchmark of less than 5 percent of GDP by 2015; and

x. Reduce sovereign debt to at least 60 percent of GDP by 2015.

7. FINANCING OF THE MTP

7.1 Approximately US$9 billion total investment is required to finance the MTP in order to meet the growth and development targets during the plan period. It is important to note that most of the inflows are anticipated to come through our own saving and investment efforts, Foreign Direct Investment (FDI), credit lines and Public Private Partnerships (PPPs).

8. KEY POLICIES IN THE MTP

8.1 The MTP is anchored on the following key policies which are well elaborated in the Plan document:-

A. KEY ENABLERS - INFRASTRUCTURE

Increasing power generation capacity to meet national demand and for export in the region;

Ensuring adequate supply of fuel for both domestic and industrial;

Having a well developed trunk road network, a functional and robust rail infrastructure and reliable air transport;

Supplying adequate and clean water for urban and rural communities;

Increasing the availability of affordable and decent housing in urban areas;

Making ICT products and services accessible to the wider population and transform Zimbabwe into a knowledge based society;

Revamping and expanding information infrastructure which will ensure effective information dissemination to all citizenry; and Ensuring rapid economic growth and transformation through the adoption and integration of Science, Technology and Innovation.

B. INVESTMENT

PROMOTION

Creating a conducive investment climate that will trigger investment flows into the country;

Developing a clear legislation and regulatory framework governing PPPs;

Influencing speedy conclusion of negotiated BIPPAs and expediting negotiations of more BIPPAs with more countries; and

Operationalisation of the One-Stop Shop Investment Centre to facilitate speedy and efficient handling of investors' licences and permits

C. PRODUCTIVE SECTORS

Adopting a holistic approach to agriculture in order to ensure that it remains economic backbo

Restoring the manufacturing capacity of the economy to about 80 percent;

Profitably exploiting Zimbabwe's natural resources and mineral endowments for Zimbabwe's socio-economic development;

Enhancing Zimbabwe's domestic, regional and international tourism and quicken economic recovery given its quick win nature; and

Ensuring sound management of the environment to promote sustainable use of natural resources and biodiversity.

D. EMPLOYMENT CREATION AND POVERTY REDUCTION

Increasing employment and reducing poverty;

Creating an enabling environment for SMEs to grow and enhance their contribution to national development;

Enhance gender equality and youth development in all sectors of the economy; and

Indigenisation and economic empowerment.

E. SOCIAL SECTORS

Enhancing the Public Service for better service delivery;

Improving the health of the nation;

Strengthening human capital development through education; and

Implement an overarching Social Policy Protection Framework in order to sufficiently provide for the vulnerable.

F. DIASPORA RE-ENGAGEMENT

Enhance Diaspora engagement.

G. GOVERNANCE

Strengthen economic governance; and

Promote good governance in all institutions.

H. FINANCIAL SECTOR

Financial stability and inclusive financial sector development; and

Increased access to lines of credit to improve liquidity position in the economy.

9. IMPACT OF THE MEDIUM TERM PLAN

9.1 Implementation of the Plan is going to impact the economy in the following ways:-

i. Ensure equitable economic growth, development and economic empowerment;

ii. Achieve National Food Security;

iii. Reduce poverty; and

iv. Creation of decent employment.

10. IMPLEMENTATION MODALITIES, MONITORING AND EVALUATION

10.1 Implementation of the MTP will entail the Ministry of Economic Planning and Investment Promotion consulting all line ministries and the Ministry of Finance to agree on the budgetary allocations for programmes and projects outlined in the Plan.

10.2 The costed Implementation Matrix and the Monitoring and Evaluation Framework will be published separately. The matrix will guide the fiscal authorities in the allocation of funds to capital expenditure programmes.

10.3 Monitoring and evaluation process will be developed with the assistance of the Office of the President and Cabinet, Prime Minister's Office, the Ministry of Finance and line ministries.

10.4 This will entail further consultations to:

i. Agree on key outcomes for each line ministry, which are linked to the strategic objectives;

ii. Concretise actions and programmes in the MTP that are necessary to achieve these outcomes at line ministry level; and

iii. Agree on measurable indicators for each outcome.

10.5 The MTP will be reviewed during the Plan period in line with national, regional and international developments.