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Optimistic Zimbabwe budget forecasts economy rebound

Optimistic Zimbabwe budget forecasts economy rebound

by MARCUS MUSHONGA
HARARE, (CAJ News) ZIMBABWE expects its economy, on a lull attributed to the coronavirus (COVID-19), to rebound in 2021, boosted by a budget focused on key sectors such as agriculture and mining.

Mthuli Ncube, the Finance and Economic Development Minister, presented the 2021 budget on Thursday.

He projected the economy to rebound by 7,4 percent in 2021, up from two consecutive years of downturn.

Agriculture is to receive $46,3 billion in the 2021 National Budget.

The sector is forecast to grow by 11,3 percent on the back of normal to above-normal rainfall season, improved access and timely financing, timely provision of farming inputs to vulnerable households, enhanced irrigation support and support towards mechanisation of agricultural activities.

Mining and quarrying are forecast to increase by 11 percent.

This follows planned expansion programmes aimed at increasing production by miners, increase in capacity utilisation from current 61 percent to about 80 percent in 2021 from expected improvement in power supply and foreign currency availability plus favourable international commodity prices.

The Ministry of Mines is to receive $1,4 billion.

Year on year inflation is projected to reach 9 percent by the end of 2021.

The figures presented by the minister would represent a significant rebound by the economy.

Economy estimated to contract by 4,1 percent in 2020, reflecting weak demand due to necessary lockdown.

“This suppressed output, productivity and capacity utilization,” Ncube stated.

COVID-19 hit an economy that was already dealing with devastating impacts of climatic shocks of drought, Cyclone Idai and Cyclone Kenneth.

Mining, manufacturing, tourism, construction, distribution and other service sectors faced the full negative impact of containment measures.

Agriculture was less affected as the summer cropping season was almost over when pandemic hit.

– CAJ News

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