Expenditure is projected to grow to ZWL927.3b
However, the budget deficit will widen by 1.5%
Total revenues expected to reach ZWL850.7b
Harare - Zimbabwe expects to nearly double its expenditure to circa ZWL1 trillion for the full year 2022 to alleviate the effects of COVID-19 and improve productivity as the nation aims to hit a 5.5% Gross Domestic Product (GDP) growth.
In the 2022 national budget presented on Thursday, Minister of Finance and Economic Development, Professor Mthuli Ncube revealed that expenditure is projected to grow to ZWL927.3 billion from a projected ZWL509 billion in 2021
The ZWL927.3 billion is expected to help the nation achieve a 5.5% GDP in the post-COVID-19 era, which had put business operations in shambles since 2019.
Total revenue collections are projected to grow to ZWL850.7 billion, which is 16.8% of the GDP.
In 2019 the economy according to the International Monetary Fund shrank by 6.1% while data from the Finance Ministry shows that it shrank by 5.3% in 2020 when COVID-19 pandemic was at its peak.
Government projects a 7.8% GDP in 2021.
“This 2022 national budget seeks to buttress the growth trajectory established in 2021, and enable the economy to build resilience against shocks including the COVID-19 pandemic,” said Ncube.
Growth is expected to be geared towards agriculture, mining and infrastructure development which were top beneficiaries of the budget. Mining provides nearly 12% of the country’s GDP while statistics from the Food and Agricultural Organisation of the United Nations shows that agriculture, which is also the backbone of the economy contributes approximately 17% to the GDP.
Zimbabwe is expected to achieve food self-sufficiency by 2022, that will reduce food imports and relieve stress on the budget on food imports, and a US12 billion miming industry by 2023.
However, the increase in expenditure will widen the budget deficit to 1.5% from 2021’s 0.5% that is capable of fuelling a currency slide. Ncube said the gap will be filled by the government bonds of US$100 million dollars on the Victoria Falls Securities Exchange.
Currency depreciation has caused turmoil on the nation’s finance system, hurting productivity within the industry and fuelling inflation which was on an upside trend from 50% in September, 54% in October and 58% in November, forcing the RBZ to revise 2021 inflation targets three times this year.