News / National
Zimbabwe's economy to grow 6% in 2025
07 Nov 2024 at 07:00hrs | Views
Zimbabwe's economy is projected to expand by six percent in 2025, bolstered by favorable rainfall conditions that are expected to boost agricultural productivity, Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube announced. This forecast, combined with a steady five percent growth rate expected in the years following 2025, highlights the positive impact of government policies and strategic reforms, Ncube said during a pre-budget seminar held in Bulawayo.
The finance minister attributed the country's resilience to the effective implementation of government policies, which have enhanced Zimbabwe's capacity to weather external economic shocks. "The effective implementation of these policies has created a robust economic environment, characterized by adaptability and the capacity to withstand external shocks, ensuring long-term prosperity for the nation," he said. Ncube added that the anticipated "normal to above-normal rainfall" will play a crucial role in driving the economy's recovery in 2025.
Held under the theme "Building Resilience for Sustained Economic Transformation," the seminar underscored several key factors expected to support economic growth in the coming year. These include a stable electricity supply, a stable exchange rate, and controlled prices. The government, Ncube emphasized, remains committed to fiscal discipline, with a budget deficit target of less than three percent of GDP, prioritizing expenditure on key projects in line with the National Development Strategy 1 (NDS1).
Resilience Amidst Challenges
Despite facing challenges such as global supply chain disruptions, geopolitical tensions, and an El Niño-induced drought, the minister highlighted the resilience of Zimbabwe's economy, noting its stability during the first ten months of 2024. Ncube presented the 2025 National Budget priorities, with a focus on sectors critical to growth: agriculture (expected to grow by 12.8 percent), electricity (10.6 percent), ICT (9.9 percent), and mining (5.6 percent).
The agriculture sector, in particular, is poised for recovery. Projected to grow by 12.8 percent in 2025 after a 15 percent contraction in 2024 due to drought, agriculture will benefit from climate-smart farming practices under the-PFumvudza/Intwasa scheme. These efforts, along with increased support for farming inputs, improved extension services, mechanization, and irrigation development, are expected to boost agricultural output significantly.
"The continuation of input support programs, enhancements in extension services, and investment in mechanization and irrigation will support our agriculture sector," Ncube said, also emphasizing the importance of strengthening irrigation infrastructure to mitigate the impact of future droughts.
Fiscal Plans and Tax Reforms
The 2025 National Budget outlines ambitious fiscal targets, with projected revenues of ZWG140.2 billion and projected expenditures of ZWG140.5 billion. A large portion of the budget will be allocated to employee compensation (ZWG78.5 billion), operational expenses (ZWG38.2 billion), and capital investments (ZWG23.8 billion).
In addition, the government plans to introduce tax reforms aimed at providing relief to taxpayers, enhancing revenue generation, and strengthening tax administration through digitalization. One of the key initiatives involves integrating the Zimbabwe Revenue Authority (Zimra) system with other government departments to improve tax collection efficiency. Tax proposals for 2025 include streamlining tax expenditures and introducing automatic registration for small and medium enterprises (SMEs) for VAT, PAYE, and Corporate Income Tax (CIT).
"The 2025 taxation proposals will also focus on enhancing digital tax administration through integrations between Zimra and institutions like banks, the Central Vehicle Registry, Zinara, and other government entities," Ncube explained. He emphasized that the government's strategy is to direct resources toward initiatives that provide the highest returns and drive sustainable growth.
Strategic Vision for 2025 and Beyond
As Zimbabwe continues to push forward with its development agenda, Professor Ncube reaffirmed that prioritizing key sectors and initiatives will be essential in achieving the country's Vision 2030 goals, which aim to create a prosperous and resilient economy. The continued focus on strategic reforms, agricultural productivity, and infrastructure development will be pivotal in ensuring long-term economic growth and stability for the nation.
The government's commitment to fiscal consolidation and targeted investments is expected to drive Zimbabwe's economic recovery and set the foundation for sustained growth in the coming years.
The finance minister attributed the country's resilience to the effective implementation of government policies, which have enhanced Zimbabwe's capacity to weather external economic shocks. "The effective implementation of these policies has created a robust economic environment, characterized by adaptability and the capacity to withstand external shocks, ensuring long-term prosperity for the nation," he said. Ncube added that the anticipated "normal to above-normal rainfall" will play a crucial role in driving the economy's recovery in 2025.
Held under the theme "Building Resilience for Sustained Economic Transformation," the seminar underscored several key factors expected to support economic growth in the coming year. These include a stable electricity supply, a stable exchange rate, and controlled prices. The government, Ncube emphasized, remains committed to fiscal discipline, with a budget deficit target of less than three percent of GDP, prioritizing expenditure on key projects in line with the National Development Strategy 1 (NDS1).
Resilience Amidst Challenges
Despite facing challenges such as global supply chain disruptions, geopolitical tensions, and an El Niño-induced drought, the minister highlighted the resilience of Zimbabwe's economy, noting its stability during the first ten months of 2024. Ncube presented the 2025 National Budget priorities, with a focus on sectors critical to growth: agriculture (expected to grow by 12.8 percent), electricity (10.6 percent), ICT (9.9 percent), and mining (5.6 percent).
The agriculture sector, in particular, is poised for recovery. Projected to grow by 12.8 percent in 2025 after a 15 percent contraction in 2024 due to drought, agriculture will benefit from climate-smart farming practices under the-PFumvudza/Intwasa scheme. These efforts, along with increased support for farming inputs, improved extension services, mechanization, and irrigation development, are expected to boost agricultural output significantly.
"The continuation of input support programs, enhancements in extension services, and investment in mechanization and irrigation will support our agriculture sector," Ncube said, also emphasizing the importance of strengthening irrigation infrastructure to mitigate the impact of future droughts.
Fiscal Plans and Tax Reforms
The 2025 National Budget outlines ambitious fiscal targets, with projected revenues of ZWG140.2 billion and projected expenditures of ZWG140.5 billion. A large portion of the budget will be allocated to employee compensation (ZWG78.5 billion), operational expenses (ZWG38.2 billion), and capital investments (ZWG23.8 billion).
In addition, the government plans to introduce tax reforms aimed at providing relief to taxpayers, enhancing revenue generation, and strengthening tax administration through digitalization. One of the key initiatives involves integrating the Zimbabwe Revenue Authority (Zimra) system with other government departments to improve tax collection efficiency. Tax proposals for 2025 include streamlining tax expenditures and introducing automatic registration for small and medium enterprises (SMEs) for VAT, PAYE, and Corporate Income Tax (CIT).
"The 2025 taxation proposals will also focus on enhancing digital tax administration through integrations between Zimra and institutions like banks, the Central Vehicle Registry, Zinara, and other government entities," Ncube explained. He emphasized that the government's strategy is to direct resources toward initiatives that provide the highest returns and drive sustainable growth.
Strategic Vision for 2025 and Beyond
As Zimbabwe continues to push forward with its development agenda, Professor Ncube reaffirmed that prioritizing key sectors and initiatives will be essential in achieving the country's Vision 2030 goals, which aim to create a prosperous and resilient economy. The continued focus on strategic reforms, agricultural productivity, and infrastructure development will be pivotal in ensuring long-term economic growth and stability for the nation.
The government's commitment to fiscal consolidation and targeted investments is expected to drive Zimbabwe's economic recovery and set the foundation for sustained growth in the coming years.
Source - The Chronicle
