Michael Tome – Business Reporter
Zimbabwe’s economy is projected to grow by 4 percent this year while it is seen expanding by a further 3,8 percent in 2023, largely sustained by expected growth in the construction, mining and agriculture sectors.
Presenting the 2023 National Budget Statement, Finance and Economic Development Minister, Professor Mthuli Ncube said the growth forecast slightly below the National Development Strategy’s (NDS1) minimum growth target of 5 percent.
According to the Treasury chief, the revised economic growth outlook, from 4,6 forecast earlier, was on account of fickle global economic trends compounded by possible hostile factors that might arise during the year including climate change related.
It means Zimbabwe, under the Second Republic, will register its third consecutive year of strong economic growth after the economy expanded by a weighty 7,4 percent in 2021 following a bumper agricultural harvest that saw record maize output.
Minister Ncube has pinned hopes of economic growth next year on yet another expected good agriculture season for 2022/2023, on account of the forecast normal to above-normal rainfall pattern.
As it stands Zimbabwe’s Government intends to financially support a significant hectarage of crop production through the National Enhanced Agriculture Productivity Scheme (NEAPS) for the forthcoming 2022/23 summer cropping season.
Minister Ncube observed that the Government had allotted US$154, 6 million equivalent local currency guarantee to AFC Holdings to raise resources from the market in support of the agriculture sector, while simultaneously capacitating CBZ Agro Yield to finance the oncoming summer cropping season.
Already the Government has disbursed US$30 million Horticulture Export Revolving Fund (HERF), which is expected to go a long way in enhancing horticulture value chain activities.
This is expected to help enhance the country’s food security and more emphasis is being channelled towards the production of the main crops to improve local food, feed, and oil sufficiency in the country. In that regard the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development was allocated $362, 5 billion, to guarantee food production and security in the country. Also, Minister Ncube pointed out that the mining sector was poised to grow by 10, 4 percent in 2023, hinging on the expected increase in local mining investments.
He noted that favourable international commodity prices were likely to sustain thus spurring the envisaged mining sector growth in the year, a notable impetus to the sector which remains critical to the country’s earnings with exports accounting for about 80 percent of the country’s export earnings.
As such the Ministry of Mines and Mining Development has been allocated $12, 9 billion, for mining sector activities including support to small-scale miners, exploration, mine development, mechanization and sustainable mining development in the country.
The construction industry in the country continued to record remarkable growth driven by national projects ranging from roads and dam construction compounded by individual home building
The Government through its various arms has been rolling out a range of infrastructure projects encompassing roads, dam construction, agriculture, housing, and energy infrastructure and brisk business has been recorded from the ongoing initiatives.
The Transport and Infrastructural Development and the National Housing and Social Amenities ministries, the major stewards of public construction projects across the country, were allocated $144,6 billion and $27,7 billion, respectively.
Transport and Infrastructural Development expenditure has mainly been directed towards the development of transport and related infrastructure such as roads, airports, railway and ports of entry while National Housing and Social Amenities allocations will focus on affordable and decent housing.
Economic analyst Dr Prosper Chitambara indicated that although it was too early to talk agriculture production, there was likely going to be positives emanating from the mining and construction sector.
He said mining will probably benefit from good commodity prices while construction would continue on an upward trajectory.
“I peg next year’s economic growth at just three percent considering that next year is a tricky year, for starters we do not know what is going to happen in agriculture, we saw what happened in the 2021/22 agriculture season, agriculture output declined even more than expected.
“But we expect commodity prices in the mining sector to continue doing well while construction is likely to be on an upward trajectory hence moderating whatever performance that might come from the agriculture sector,” said Dr Chitambara.
Another economist Eddie Cross said the Treasury chief should reduce expectations on the agriculture sector performance owing to high financing costs which are likely to minimise production.
However, he spoke glowingly of the construction sector alluding that he did not see the sector retreating anytime soon.
“I think he has overstated agriculture quite seriously, agriculture for next year might not be good at all owing to financial challenges in getting the crop into the ground but construction is likely to continue booming, I do not see any reduction if anything I see construction activity accelerating, housing development continues to exceed expectations,” Mr Cross said.