HARARE, – Zimbabwe’s government has projected a significant recovery in economic growth, forecasting a 6% expansion in 2025, up from a modest 2% in 2024.
Finance Minister Mthuli Ncube, in his budget speech on Thursday, attributed the expected growth to improvements in agricultural output and power generation, as the country begins to rebound from the severe drought that has hampered its economy in recent years.
Ncube outlined that the country’s budget deficit is also expected to narrow to 0.4% of gross domestic product (GDP) in 2025, down from 1.4% this year. The recovery in key sectors, notably agriculture and power generation, is seen as crucial for economic stabilization and growth.
The agriculture sector, which suffered a sharp 15% contraction in 2024 due to the impacts of an El Nino-induced drought, is expected to rebound with a growth forecast of 12.8% in 2025. Ncube highlighted that improved rainfall and better agricultural practices will support this recovery, boosting food production and contributing to the country’s overall economic performance.
The mining sector, which has faced challenges from lower global prices for key minerals like lithium and platinum, is also expected to show growth, with a forecasted 5.6% increase in 2025, up from 2.3% in 2024. The minister noted that despite these setbacks, the sector’s recovery would be vital in supporting broader economic progress.
Ncube acknowledged that Zimbabwe’s ongoing currency issues remain a challenge. Following the abandonment of the Zimdollar in April 2024, the government introduced the ZiG (Zimbabwe Gold), a new currency aimed at stabilizing the economy.
However, this currency has also faced challenges, including a lack of public confidence, with many Zimbabweans continuing to use foreign currencies, such as the U.S. dollar, for daily transactions.
The government plans to increase efforts to promote greater acceptance of the ZiG in 2025, though specific measures were not detailed in the speech. Ncube’s remarks highlight the ongoing struggle to stabilize the country’s currency and restore confidence in the local economy.
Despite the setbacks from the drought and global commodity price fluctuations, Ncube expressed optimism for Zimbabwe’s recovery, with the agriculture sector and power generation expected to be key drivers of economic growth in the coming year.
While the economic challenges are significant, the Finance Minister remains hopeful that the combination of improved sector performance and fiscal discipline will lead to a more stable and growing economy by 2025.