Oliver Kazunga-Senior Business Reporter
THE economy continues to register a sustained growth trajectory underpinned by transformative policies the Government has been implementing in the past four years, Finance and Economic Development Minister Professor Mthuli Ncube said yesterday.
Under President Mnangagwa’s administration, the Second Republic, which came into being in November 2017, has committed itself to rebuilding the economy that for nearly two decades had been contracting.
Responding to questions from the floor during the 2023 post-budget breakfast meeting in Harare yesterday, Prof Ncube said the level of economic activity points to a growing economy.
“In this budget, our objective is to accelerate the transformation journey that began on the 4th of October 2018 when I launched the Transitional Stabilisation Programme (TSP).
“That transformation was negatively impacted by the shocks (drought and Covid-19) in 2019, but we continued on a positive growth trajectory. We had to be a country or an economy that grows at an average growth rate of five percent per annum as a minimum growth rate.
“If we continue in this way (sustained growth rate), we will make sure that the upper middle-income status is achieved by the year 2030,” he said.
The Government seeks to achieve an upper middle-income economy by 2030 riding on National Development Strategy 1 (NDS 1), a five-year economic blueprint running up to 2025 that replaced the two-year TSP that ended in 2020.
It spells out policies, institutional reforms and national priorities needed between 2021 and 2025 before the implementation of NDS 2 that will lead the country into an upper middle-income economy by 2030.
“The way we are transforming the infrastructure sector take for instance dams, when you talk about the economy around dams, the villagers around the irrigation schemes are shareholders, so they receive dividends at year-end; they also provide labour to the schemes and that’s transformation.
“There is transformation in all sectors of the economy. By the way, 80 percent of the goods on shelves are local and that is transformation,” he said.
“Also, this year I think because of the global prices, geo-political tension which have seen an increase in world prices, we have used fuel taxes to the benefit of citizens literally as a stabilisation plan.
“In fact, the Government has not made a lot of money from this fuel tax. In September this year, we had the highest consumption of fuel ever, almost 192 million litres of fuel and in an economy where fuel prices are going up, it just shows you the economy is growing.”
The month of October, Prof Ncube said, was the second highest in fuel consumption at about 185 million litres of fuel, further showing the level of economic activity and that the economy was growing.
In the 2023 National Budget statement, Prof Ncube highlighted the desired structural transformation from a commodity-driven economy, into a diversified resilient economy was being achieved through interventions that promote value addition of primary commodities, diversify the local product range and exports, as well as adoption of innovative technologies.
In his remarks during the breakfast meeting, the Confederation of Zimbabwe Retailers (CZR) president Dr Denford Mutashu said “From our point of view, the budget is simply buttressing the stability the economy is currently enjoying and in our submissions we had spoken of a number of issues including the Intermediated Money Transfer Tax (IMTT) of four percent and you reduced it to two percent.
“The liberalisation of the exchange rate is one area amongst all the things that we had requested, we also believe that the liberalisation of the exchange rate is actually going to propel economic activity in the retail sector.”
Reserve Bank of Zimbabwe (RBZ) Deputy Governor Dr Innocent Matshe said in addition to economic growth forecasted to remain positive, monetary authorities were also targeting to deal with the inflation monster.
“The devil, which is inflation, is going to remain in the target that we were given by our Minister (Prof Ncube) and we will work day and night to ensure that happens. Guided by that target, the Reserve Bank is putting in place measures not only to consolidate the current stability, but also to ensure that monetary policy is well coordinated.
The policy measures being pursued by the Government are already bearing fruit, the Central Bank is fully aligned with the objectives not only of the budget that we are talking about this morning, but also NDS1 and Vision 2030,” he said.