Zimbabwe economic transformation on the right path

ZIMBABWE’s economy is on the right path towards President Mnangagwa’s vision of an empowered and prosperous upper middle income society by 2030, spurred by strong growth in the mining sector and agriculture.

Vision 2030 seeks to fundamentally transform Zimbabwe to an upper middle income economy, with a per capita Gross National Income of over US$5 000 in real terms by 2030.

Finance and Economic Development Minister Mthuli Ncube said the journey started by implementing the Transitional Stabilisation Programme (TSP), and through the TSP, notable achievements were made, in particular the restoration of external and internal macro-economic stability.

“We are now on the second phase of the road to Vision 2030, which is the implementation of the National Development Strategy (NDS1) whose goal is to achieve accelerated inclusive, socio-economic growth through social transformation.

This entails graduating the economy from being predominantly a primarily industry to one dominated by secondary and tertiary industry, in the process creating decent jobs, income for the masses and  leaving no one behind,” he said while speaking at an event to launch the Zimplats joint venture cattle ranching project, where President Mnangagwa was the guest of honour.

Minister Ncube, in the mid-term budget review, revised upwards the economic growth projections, saying he now expected the economy to grow by at least 7,8 percent this year, compared to the previous forecast of 7,4 percent.

“The rapid growth and recovery will be on account of a better 2020/21 agricultural season, higher international commodity prices, a stable macroeconomic environment, and well-managed Covid-19 pandemic,” he said.

The Minister said Zimplats featured highly in the economy through participation in sectors such as agriculture and mining while benefiting from firm commodity prices and a stable macro-economic environment.

“Zimplats contributes over US$160 million in taxes to the Government annually,” the Minister said, adding that going forward, the economic growth would be anchored on mining as the Government pursues a US$12 billion mining industry by 2023.

“This sector is important, as it currently contributes between 6 to 8 percent of gross domestic product ( GDP) and we expect that this share will increase through contributions from mining companies such as Zimplats.”

According to the Minister, in 2020, the country exported goods and services worth US$5,3 billion, of which merchandise exports were US$4,9 billion. Of this, mineral receipts contributed around US$3,7 billion.

“The platinum group of metals (PGMS), where Zimplats is a major player, had exports of US$1,96 billion, higher than gold which stood at US$900 million in exports receipts, bringing in more foreign currency,” Minister Ncube said.

He added that foreign currency receipts were largely driven by high international prices, especially rhodium and palladium and it was understandable, because, Zimbabwe had the third largest platinum reserves after Russia and South Africa, thus earnings should reflect as such.

 Minister Ncube said the Government is also getting substantial revenue from mining companies in taxes, and the sector is a cash cow for foreign currency for the economy.

“As Government we will continue to improve the economic environment for their quest for growth,” he said.

He noted that Zimplats was also undertaking exploration and expansion projects such as the Mupani Mine development, which resonated well with the Government’s quest for mining to become a US$12 billion industry by 2023.

“As a country we will continue to benefit from taxes from such projects, export receipts, job creation and other benefits,” he said.

Zimplats currently has empowered the communities it operates in through a 10 percent share ownership scheme and similarly an employee share ownership scheme of the same size.

The company in 2020 spent US$2,6 million under corporate social programmes through which it invested in developmental projects, such as health, education, local enterprise development and income development projects.

“As Government we appreciate such empowerment programmes in line with NDS1, and it is our hope that all companies, especially those in the extractive industries should invest back into their communities they operate under,” Minister Ncube said.

The Minister indicated that Zimplats’ diversification into agriculture through the cattle ranching project and dairy project in a joint venture with Palmline Holdings was a welcome development that supports economic recovery.

“These initiatives are what we are looking for as a Government to ensure small farmers also benefit from knowledge transfer and link to international markets,” he said. – Herald

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