Zimbabwe’s economy is highly susceptible to global developments and inwardly, the cost of doing business is high.
HARARE – The Government of Zimbabwe on Monday launched a five-year National Development Strategy 1 (NDS1) for the period 2021-2025 marking an end to the Transitional Stabilisation Programme (TSP), a two-year economic blueprint launched in October 2018.
NDS1 is unsurprisingly a reflection of President Emmerson Mnangagwa government’s approach to Zimbabwe’s recovery, one that is largely a shift from the political towards the economic. Ideally, it is meant to ensure high, accelerated, inclusive and sustainable economic growth as well as socio-economic transformation and development as the country move towards an upper middle-income society by 2030. NDS1 is an extension of TSP.
On its part, government hails TSP as a success and as the Minister of Finance, Professor Mthuli Ncube brags, notable achievements include; fiscal consolidation, external sector balance and exchange rate stability.
As a next step, government came up with the NDS, a two-step series towards the attainment of an upper middle-income economy by 2030.
Economic Growth Projections
Professor Ncube said “NDS1 will endeavour to steer the economy onto a growth path to realise an average of 5 percent Gross Domestic Product (GDP) growth rate per annum over the Strategy Period.”
“…in order to give impetus to this Strategy, NDS1 will intentionally commit resources towards building and capacitating key national institutions that play a critical role in providing the enabling environment for private sector investment to thrive,” he added.
A 5% GDP growth next year is near to impossible as the country will be coming down from at least a 10% decline in the current year. The world is still reeling from the impact of COVID-19 and although lockdown restrictions have been eased in most countries including Zimbabwe, the threat of a second wave of the virus is high, with countries like the United States of America experiencing record high daily cases post the presidential elections.
Zimbabwe’s economy is highly susceptible to global developments and inwardly, the cost of doing business is high (machinery, technology etc). Professor Ncube, typically does not shy away from throwing numbers and setting ambitious targets, in all cases, his GDP projections over the years have not been achieved. Another sticking factor is the politics. Zimbabwe has a fragile politics under the current administration and the risk of attracting another round of sanctions is high than the chances of them being removed.
Economic Analyst, Zvikomborero Sibanda said it is possible to achieve a 5% GDP growth per annum over the next five years, but the balance of risk is to the downside. He said that “Certain macro fundamentals should be put in shape first.”
Mr Sibanda said the country is currently witnessing a fragile exchange rate stability which he says is immature to be celebrated while he also mentioned inflation, fiscal balance and production as key sectors that should be fixed to achieve the growth projections.
Meanwhile, President Emmerson Mnangagwa said NDS1 is a five-year programme that seeks to create 760,000 new jobs, bring inflation down to between 3-7% by 2025 and expand the economy by 5% year on year.
Zimbabwe is suffering from a confidence crisis and it is critical for all stakeholders to have a shared vision if the country is to achieve an upper middle income economy by 2030.
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