Zimbabwe’s 5,5 percent economy regeneration , GDP growth projections brings hope to the nation as 2022 budget flow opens avenues for change

By Nevson Mpofu*

Finance and Economic Development Minister Muthuli Ncube

The economy is envisaged to grow by 5,5 percent in 2022 . Finance and Economic Development Minister Muthuli Ncube cites decelarating inflation and output mineral production as the main reason . This year the economy was projected at 7,8 percent which is far much better than 2020 . The economy has as of that year experienced effects of covid induced lockdown periods which nearly parallised Tourism and Manufacturing sector .

Zimbabwe National Statistics Agency said rate of inflation moved to 58,4 percent this month from 54 percent , caused by high prices of basic commodities and currency fragilities . Growth is  expected to take grounds in the manufacturing , agriculture ,construction and tourism sectors .

,, ”There are sectors like manufacturing , agriculture , construction and tourism . These have been recovering from covid -19 , they are , however , projected to grow despite this pandemic .

” it us therefore important to note that gross domestic poroduct sees a 5,5 percent growth by 2022 . It is however lower than the 7,8 percent projection .”

The minister presented the ZW $ 927,6 billion about US$8,8 billion budget ,  The 2021-2022 agricultural season is  premised on assumption that it will go normal . The minister pointed out that covid induced lockdown will not inflict further in the presence of vaccination .

” we as a nation assume that the 2021-2022 season will be so normal . we wont be inflicted by covid-19 induced lockdown because of our campaign for vaccination. potential risks to the above projected growth include the uncertainity in the future path of the covid pandemic and exchange rate volatility ”, this may contribute to high inflation . other risks relates to underperformance of some state owned enterprises . On top lies extreme weather conditions , retreats in international commodity prices and high international oil prices ”.

”The 2022 capital budget provides an overall spending plan of ZW$334,2 billion about US$3,1 billion including ZW $42,5 billion about US$404,7million . in this amount , ZW$156,4 billion , abiut US$1,5 million is for infrastructure develooment . Mainly state owned enterprises gets ZW$10,9 billion about US$104 million for its capitalisation . Meanwhile ZW$23,5 billion about US$223,8 million has been enmarked for the line ministries to enhance public service delivery “”.

the minister continued that employment costs will take ZW$340 billion which is US$3,2 billion , which is 40 percent of revenue . Non wage current spending which includes social benefits stands at ZW$279,2 billion , that is US$2,6 billion . The budget will cater as well for loan repayments of ZW$28,3 billion about US$269 million . The other sum of money ZW$41 billion , US$390 million is for financial assets . state of public finances has improved so well , revenue collection at ZW$317,4 billion , about US$3 billion against expenditure of ZW$351,7 billion , USS$3,35 billion between january and september 2021 .

Speaking close to the end of the budget he added that mining is estimated to reach 3,4 percent in 2021 .

” this is on account of improved performance by all minerals , favourable global mineral prices on the back up of strong global demand of minerals spells out the growth of the economy .

” the country will therefore continue to leverage its mineral resources in order to achieve mining growth of 8 percent in 2022 .This is in line with the US$12 billion mining industry by 2023 ,”

Manufacturing is expected to remain positivie and firm at 5,5 percent. It is underpined by continued macro economic stability and improved access to foreign currency on the formal market ,””””, concludes Ncube .

 

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