- Says the good agricultural season and boost in mining still make target attainable
- President Mnangagwa called for a revision
- IMF revised from 4.2 percent to 3.1 percent on COVID 19
Harare – The minister of Finance and Economic Development, Mthuli Ncube says he is sticking to his projection of a GDP growth of 7.4 percent this year despite President Emmerson Mnangagwa saying that that projection would have to be reviewed in light of the new waves of COVID-19 that forced the country into lockdown for most of the first quarter.
In an interview with Bloomberg TV, Ncube said that the basis for the 7.4 percent growth projection remains the good rains that brought about a good agricultural season and an increase in mining earnings.
“Zimbabwe is coming through this recovery phase quite well, mining remains strong. Our Infrastructure investment programme is also quite strong. There’s really a recovery across the board, except the tourism sector,” Ncube told Bloomberg.
To put his statement into perspective, Tobacco, the country’s top agricultural commodity in terms of foreign currency earnings, sold 2 468 113 kgs in the first five days of this year’s selling season against 218 492kgs in 2020, representing a 1030 percent surge.
Other forms of produce like maize are expected to reel in volumes that will be the highest in four years and at the same time, there has been a significant rise in the prices of mining commodities especially PGMs whose mattes were the country’s number one export in 2020, raking in almost a billion U.S dollars.
Where infrastructure is concerned, President Mnangagwa said that his government had dedicated ZW$33.6 billion to “rapidly rehabilitate 10 000 kilometers of Zimbabwe’s roads.”
Despite all this, however, the president felt that the economic growth projection set by the Treasury at the end of last year had now become too high considering new waves of COVID 19.
“With the pandemic that affects economic activity, you cannot stick to that, we have to revise,” Mnangagwa said in an interview with ZBC on the eve of Independence day.
This comes after the IMF which had initially projected a 4.2 percent economic growth for Zimbabwe in 2021 revised their projection to 3.1 percent on COVID-19.
At the same time, English economics research and analytics firms, Fitch Solutions in their March report said that Zimbabwe’s economic growth projections at 7.4 percent were “overly optimistic” and instead predicted that the country will only see GDP growth of 1.3 percent this year.
Justifying their projection, they said, “High prices, combined with shortages of foreign currency, will lead to a substantial erosion of household real disposable incomes in the coming quarters. This will be exacerbated by higher levels of unemployment and underemployment.”
However, Mthuli remains unmoved and rooted in his initial projection.
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