HARARE – Zimbabwe’s Finance Minister, Mthuli Ncube, has projected economic growth of 2% for 2024, constrained by the impact of drought on the nation’s agriculture-dependent economy. However, he expressed optimism for 2025, forecasting a robust 6% growth driven by improved rainfall, stable inflation, and disciplined fiscal policies.
Ncube revised earlier estimates for the agricultural sector, announcing that the anticipated 21% contraction for 2024 has been narrowed to 15%, thanks to stronger-than-expected wheat and dairy output.
“Better-than-anticipated performance in these sub-sectors has cushioned the broader agricultural decline,” said Ncube.
Fiscal and Debt Overview
The Finance Minister provided an update on government finances, revealing revenue collections of ZiG$62.4 billion against expenditures of ZiG$66.5 billion for the first nine months of 2024. Most revenue came from Value Added Tax (VAT) and personal taxes, while corporate tax contributions remained subdued, reflecting the challenges of Zimbabwe’s heavily informalised economy.
Zimbabwe’s total debt burden remains significant, at US$21.1 billion, comprising US$12.3 billion in foreign debt and US$8.7 billion in domestic obligations. The mounting debt continues to strain fiscal stability, posing hurdles to economic recovery.
A New Currency and Economic Stability
Despite the challenges, Ncube highlighted progress made since the introduction of the Zimbabwe Gold (ZiG) currency in April 2024, replacing the Zimbabwe Dollar. The structured currency has contributed to macroeconomic stability and improved economic conditions, laying the groundwork for sustainable growth.
Prospects for 2025
As an agriculture and mining-based economy, Zimbabwe’s prospects for 2025 are bolstered by favourable conditions forecast for the upcoming agricultural season, driven by the La Niña weather phenomenon. Increased investments in critical sectors, alongside favourable international commodity prices, particularly for gold, are expected to enhance export earnings and strengthen the country’s balance of payments position.
Government’s Strategic Focus
Reflecting on the words of Charles Darwin, Ncube said: “It is not the strongest of the species that survives, nor the most intelligent, but the one most adaptable to change.” He emphasised the importance of adaptive production and trade systems in navigating the complexities of the global economy.
The government has committed to prioritising the implementation of tight fiscal and monetary policies to address price pressures and stabilise the domestic currency. Central to this strategy is fiscal consolidation, ensuring the efficient and effective use of scarce fiscal resources.
Ncube acknowledged the country’s ongoing electricity supply challenges, which have weighed heavily on economic growth and social progress. To address these issues, the government plans to implement bold reforms, including reducing restrictions on self-generation and encouraging private sector investment to increase domestic electricity production and mitigate power shortages.
Challenges Ahead
Despite the optimistic outlook, observers remain cautious, urging the government to implement structural reforms, diversify revenue streams, and reduce reliance on external borrowing. Inflationary pressures, weak infrastructure, and overdependence on rain-fed agriculture continue to pose risks.
With the macroeconomic environment showing signs of improvement, stakeholders are hopeful that the policies and measures adopted will support Zimbabwe’s path to economic stability and growth. However, sustainable development will depend on the government’s ability to address long-standing structural challenges and foster inclusive economic transformation.