News / National
Economy registers three-year growth, says Prof Ncube
31 Oct 2024 at 06:48hrs | Views
Zimbabwe has sustained robust economic growth over the past three years, averaging an impressive 6.8 percent annually, despite significant currency fluctuations, Finance, Economic Development, and Investment Promotion Minister, Professor Mthuli Ncube, revealed yesterday in Harare. Speaking at a signing ceremony for €75 million in financing agreements with the European Union, Prof Ncube attributed the growth to strategic policy measures aimed at maximizing the advantages of a weaker domestic currency.
"I don't think it's surprising that with all the currency volatility we have experienced in the last five years, the Zimbabwean economy has grown at an average rate of 6.8 percent over the last three years," Prof Ncube said, emphasizing that currency instability has not hampered the nation's economic progress. He attributed this resilience to the economy's ability to leverage the competitive advantage a weaker currency brings in global markets, making Zimbabwean goods more affordable internationally and bolstering export performance.
This year, the economy is expected to grow at a slightly lower rate of 2 percent, primarily due to climate-related challenges rather than currency factors. However, Prof Ncube expressed optimism for 2025, projecting a robust 6 percent growth rate, which would place Zimbabwe among the top-growing economies in the Southern African region.
The recent devaluation of the Zimbabwe Gold (ZiG) currency, introduced earlier this year, saw the exchange rate shift from US$1:13.99 ZiG to approximately 24.5 ZiG per US dollar. While acknowledging both advantages and disadvantages to a weaker currency, Prof Ncube highlighted the need to mitigate negative impacts.
"Some advantages include increased export competitiveness as products become cheaper on the international markets," he explained. "However, the downside includes rising prices in response to depreciation, particularly with US dollar indexing affecting price levels. This can also erode wages, prompting us as policymakers to consider wage adjustments to protect workers' purchasing power. We're actively working on this, especially to support civil servants."
Amid calls for dollarisation, Prof Ncube reiterated the government's commitment to retaining the domestic currency, underscoring the need for control over monetary policy to maintain economic stability and growth.
As Zimbabwe navigates the economic landscape with policies designed to harness the benefits of a flexible currency while minimizing its drawbacks, Prof Ncube's statements underscore a commitment to self-sustained growth and economic resilience.
"I don't think it's surprising that with all the currency volatility we have experienced in the last five years, the Zimbabwean economy has grown at an average rate of 6.8 percent over the last three years," Prof Ncube said, emphasizing that currency instability has not hampered the nation's economic progress. He attributed this resilience to the economy's ability to leverage the competitive advantage a weaker currency brings in global markets, making Zimbabwean goods more affordable internationally and bolstering export performance.
This year, the economy is expected to grow at a slightly lower rate of 2 percent, primarily due to climate-related challenges rather than currency factors. However, Prof Ncube expressed optimism for 2025, projecting a robust 6 percent growth rate, which would place Zimbabwe among the top-growing economies in the Southern African region.
"Some advantages include increased export competitiveness as products become cheaper on the international markets," he explained. "However, the downside includes rising prices in response to depreciation, particularly with US dollar indexing affecting price levels. This can also erode wages, prompting us as policymakers to consider wage adjustments to protect workers' purchasing power. We're actively working on this, especially to support civil servants."
Amid calls for dollarisation, Prof Ncube reiterated the government's commitment to retaining the domestic currency, underscoring the need for control over monetary policy to maintain economic stability and growth.
As Zimbabwe navigates the economic landscape with policies designed to harness the benefits of a flexible currency while minimizing its drawbacks, Prof Ncube's statements underscore a commitment to self-sustained growth and economic resilience.
Source - The Herald
