‘Zim will be among fastest growing global economies’

28 Sep, 2018 - 00:09 0 Views
‘Zim will be among fastest growing global economies’ Mthuli Ncube

eBusiness Weekly

Golden Sibanda
Zimbabwe will be among the six fastest growing economies in the world over the next two years, along with five other fellow African economies, on the back of a robust and ambitious economic turnaround and transformation plan Government will roll out, according to Finance and Economic Development Minister Mthuli Ncube has said.

Professor Mthuli told a Zimbabwe Investors’ Forum in New York, on the sidelines of the 73rd United Nations General Assembly at the weekend that Zimbabwe will be joining the six fastest growing economies including Ghana, Rwanda, Tanzania and Ethiopia, with the southern African nation projected to grow at over 6 percent per annum.

Now a $16 billion economy, Zimbabwe lost nearly half its gross domestic product (GDP) over a decade of meltdown characterised by hyperinflation until 2008, but started to recover since dollarisation in 2009-2012 to register average growth of 8,1 percent, which however tapered off significantly from 2012 to as low as 2,8 percent last year, according to the World Bank.

Minister Ncube said the future looked bright, given performance of Zimbabwe’s domestic equities market, which he said had returned 2 000 percent for investors since 2009 and 282,91 percent in the last two years, outperforming equities markets for some first world economies, including the US whose SMP has returned 140 percent to investors over the same period of time.

“Invest in Zimbabwe, that is the message, you will make money,” the minister said.

Zimbabwe newly appointed finance minister and former AfDB vice president, said Zimbabwe was projected to grow at about 4,2 percent this year and likely jump straight to 6 percent next year.

Zimbabwe’s policy plan
“We have a policy direction. In terms of vision, the President has launched vision 2030, which will move Zimbabwe to an upper middle class income country by 2030 with per capita income of $3 500 through the pillars stronger of governance, transparency, macroeconomic stability, inclusive growth, infrastructure investments and social development that creates social cohesion.”

Minister Ncube said Government had the strategy for enacting the vision, dubbed Transitional Stabilisation Programme, which President Mnangagwa will launch in the next four weeks.

“But a slew of factors will be targeted, macro-economic policy, institutional arrangements in terms of strengthening institutions, the growth of the services sector, investing in public infrastructure, particularly inclusive infrastructure and developing human capital,” Minister Ncube told the delegates of predominantly US investors.

He said the country, will also create favourable conditions for investment and growth through governance reforms.

The Southern African nation, the Zimbabwe finance minister noted, also had the 85 percent literacy rate of its populace as significant human capital tool it expected to use to maximum effect in order to drive higher economic productivity and progress towards its vision of achieving middle income status in only a little over a decade from now.

The finance chief said the domestic economy will primarily be driven by growth in the mining sector, which he said needed $11 billion to unlock the value underground and currently growing at an average 30 percent and agriculture, which is expanding at 14,1 percent.

The sector generates over 60 percent of export earnings.

Zimbabwe’s economy is also projected to leverage on growth in the services sector, which is now accounting for 20 percent of the economy, a currently struggling manufacturing sector, the tourism and financial services sectors.

Strong growth projected this year
“On the broader macro-economy, we are projecting 4,2 percent (growth) this year likely to be at 6 percent next year,” Minister Ncube said.

He said the country had started dealing with issues constraining growth including fiscal imbalances, to cut budget deficit, expanding the tax base and improving the efficiency of revenue performance.

Investment opportunities, the minister said, lay in agriculture sector related value chains and actual production of crops such as maize, soya beans, sugar cane and tobacco among others.

“Agriculture is doing well, on tobacco had a record season on tobacco this year, 250 million kilogrammes, the best season in the history of tobacco.”

Government will welcome desperately needed investment and cooperation in infrastructure, where a private public partnership (PPPs) framework is already in place.

“Government will upscale capacity (in infrastructure development) to make sure that the PPPs work for you, deliver value for you and for us the Zimbabweans.”

Further reforms in pipeline
The minister said several other economic reforms were underway, including implementation of a debt restructure to clear arrears and debts with the World Bank and Paris Club creditors, having already settled IMF arrears.

Other reforms have already been implemented, such as amendment of the country’s indigenisation law to remove compulsory partnership with locals, while reforms such as amendments to improve the Companies Act and enhance the ease of doing had also started and were underway.

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