The economy is on a robust growth and development trajectory, with major sectors performing above projected levels despite the existence of a number of problems affecting the economic activity, Finance and Economic Development Minister Mthuli Ncube said yesterday.
Giving a presentation on Towards Vision 2030: Zimbabwe’s Current Economic Policy to students of the national defence course at Zimbabwe National Defence University yesterday, Minister Ncube said since the adoption of the National Development Strategy 1 (NDS1) early this year, the economy had been on a positive path.
“The economy is on a positive growth trajectory as the implementation of the NDS1 started in earnest in January 2021,” he said.
“The strong external sector performance, coupled with a healthy fiscal position, as well as the relatively stable exchange rate and inflation, are evidence of the existence of strong macroeconomic fundamentals.
“The economy is on a growth trajectory with GDP projected to grow by 7,8 percent in 2021, attributed to favourable rainfall season, higher international mineral commodity prices and stable macroeconomic environment.
“We are also witnessing strong performance in the external sector driven by exports and remittances.”
Minister Ncube said the country exported goods worth US$2,2 billion during the first half of 2021 compared to US$1,9 billion exported last year.
He said the availability of the foreign currency through the auction system, notwithstanding the existing backlog, which the authorities are working flat-out to clear had bolstered economic activity in the country.
Government through its arms was working flat out to eliminate the recent distortions in the inflation and exchange rates.
“However, the exchange rate and inflation had become volatile recently,” said Minister Ncube.
“Nonetheless, authorities are aware of the factors causing the volatility, and are in the process of making policy adjustments in order to fix them.
“The RBZ has since held meetings with business leaders and reached a number of concessions to deal with exchange rate instability on the black market and its potential negative effect on price and the welfare of the general citizenry.”
On agriculture, Minister Ncube said growth of the sector in 2021 had been slightly revised upwards to 36,2 percent from the initial projection of 34 percent, on account of higher-than-anticipated performance of tobacco, wheat and livestock, particularly beef, poultry, pork, sheep and goats.
Next year, Minister Ncube said, the sector was projected to grow by a modest 5,1 percent with that growth attributable to expected favourable rainfall season and several Government programmes.
The livestock sub-sector is expected to remain buoyant on condition of good pastures and water availability.
On manufacturing, Minister Ncube said the sector was slightly reviewed downwards from the initially projected 7 percent to 6,2 percent in 2021 following the Covid-19 national lockdown measures instituted towards the end of the second quarter to curtail the 3rd wave, which led to production disruptions.
The mining sector’s output this year, he said, was revised upwards to 3,4 percent from two percent projected in May 2021 on account of improved performance in gold and diamond output and the favourable international mineral prices boosted by strong demand in China and ongoing global economic recovery.
Minister Ncube said the Covid-19 situation posed a lot of challenges to full attainment of the desired outcomes with Government working hard to ameliorate the impact of the pandemic through the ongoing vaccination programme and campaigns for adherence to the WHO guidelines.
“Despite the pandemic related disturbances, implementation of the NDS1 remains on course, following a favourable farming season, recovery in manufacturing sector and firming international commodity prices,” he said
“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 macroeconomic environment is stable, Government will continue to safeguard these gains to ensure improvement in the socio-economic well-being of citizens.”
Minister Ncube said presently, Government was seized with the preparation of the 2022 National Budget and consultations to solicit for inputs into the budget were underway.