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Mthuli Ncube says Zimbabwe's economy remains on positive trajectory

by Staff reporter
03 Oct 2023 at 06:10hrs | Views
The country's economy remains on a positive growth trajectory with the prevailing macro-economic stability expected to continue, Finance and Investment Promotion Minister Professor Mthuli Ncube has said.

Speaking at the second edition of the Zimbabwe Economic Development Conference here yesterday, Professor Ncube told delegates prospects for enhanced growth were higher taking into account the strides witnessed in the agriculture, mining, infrastructure and tourism sectors.

Running under the theme: "Public and Private Resource Mobilisation for Sustainable Development", the conference reflects the importance of exploring the overarching financial dimension of development that is fundamental to addressing all the socio-economic challenges to enable the country to realise the national Vision 2030 targets as well as regional and international obligations, such as the Africa Agenda 2063 and the Sustainable Development Goals (SDGs).

"The economy remains on a positive growth trajectory having recorded GDP growth rates of 8,5 percent in 2021 and 6,5 percent in 2022. There is no doubt that Zimbabwe is one of the fastest growing economies in Africa with projected GDP growth of 5,3 percent in 2023," said Prof Ncube.

"There are greater prospects that this projection will be revised upwards taking into account positive developments being witnessed in the agriculture , mining, infrastructure and tourism sectors."

The minister said following the successful implementation of fiscal and monetary measures put in place to manage liquidity and indiscipline by market players, as well as promote the use of the local currency, inflation has been on a downward trend, with month on month inflation being in negative territory for the months of July and August.

A recent ZimStats report indicates that year on year inflation for the month of September stood at 18, 4 percent after minor technical adjustments.

"Going forward, we expect the stability to prevail as we will maintain tight fiscal and monetary policies. We stand ready to introduce additional measures if need be," said Prof Ncube.

"On the fiscal front, we have consistently been within the SADC macroeconomic convergence benchmark of consistently achieving a budget deficit of less than three percent of GDP since 2018. This has been our commitment to guarantee stability in the economy and we shall stay the course."

However, the minister said the Government is cognisant of the expected difficult year ahead in view of the projected negative impact of the El-Nino weather phenomena, which is associated with extreme weather events, especially drought.

He said the Government under the leadership of President Mnangagwa is implementing mitigatory measures to reduce its negative impact on the overall economy and reduce food insecurity.

"Notwithstanding, we are expecting a decent economic growth in 2024 and beyond, and thus remain fully confident that the NDS1 targets and the Vision 2030 objectives remain well within reach," said Prof Ncube.

He said challenges facing the country require more home-grown solutions and strategies, and as such there is need to intensify efforts in mobilising domestic resources, especially in the face of limited access to international capital markets.

"As we have already witnessed, mobilisation of domestic resources has seen the country making great strides in implementing various programmes and projects under the NDS1," he said.

"The mid-term review consultations of the NDS1 conducted during the period April to June 2023 indicate positive performance in most of the 14 priority areas. Major inroads were recorded in the areas of infrastructure development, especially roads, aviation, ports of entry and exit, dams, energy, and irrigation, among others."

Notable achievements were made in the areas of food security, ICTs development and health, especially in combatting the Covid-19 pandemic.

"Therefore, the solutions that are being proffered during this conference will significantly contribute towards the formulation and implementation of sound policies, the shaping of the 2024 National Budget, and implementation of the NDS 1 during the second half of its five-year period," said Prof Ncube.

He said Treasury, together with the Reserve Bank of Zimbabwe, will continue with the stance of maintaining tight fiscal and monetary policies, controlling liquidity and money supply to ensure a stable macro-economic environment, which is the cornerstone for sustainable economic growth and development.

"We will also continue to insist on the Value for Money approach that we instituted last year following deliberations at ZEDCON 2022 that have eliminated forward pricing and arrested self-fulfilling inflation expectations," said the minister.

Meanwhile, Professor Ncube said ZEDCON 2022 conference facilitated and assisted in policy making, especially in the development of the 2023 National Budget. He said the outputs and recommendations from the ZEDCON 2022 deliberations significantly shaped policy including the re-modelling of the foreign currency trading mechanism, strengthening the country's re-engagement effort on the debt resolution front, as well as the institutionalisation of the value for money framework just to mention a few.

To that end, the outcome of ZEDCON 2023 is expected to provide evidence-based policy advice which will contribute to the formulation of the 2024 National Budget and review of the National Development Strategy (NDS1), which spans 2021 to 2025 and is anchored on devolution, decentralisation and prudent use of national resources for the benefit of all citizens.

This year marks the midpoint in the implementation of NDS1, the second of three successive Government national development plans aimed at achieving the country's Vision of an empowered and prosperous upper middle-income society by 2030.

"Attainment of the aspirations of Vision 2030, and other regional and global aspirations at large, require that we intensify our efforts to generate growth through mobilisation of domestic resources, as espoused in the NDS 1," said Prof Ncube.

"This is in tandem with the theme for this year's public and private resource mobilisation for sustainable development."

Source - The Herald