Zimbabwe expects economy to grow 6.3%

Mthuli Ncube, Zimbabwean Finance Minister

The Zimbabwean government, which is struggling to overcome a cash crisis and acute shortages of basic commodities, has projected its economy to grow by 6.3%, by year-end.

Zimbabwean Finance Minister, Mthuli Ncube says impressive performances in mining and agriculture will anchor growth, but there are myriad challenges ahead

Presenting his fiscal measures aimed at reversing the current challenges, Finance Minister Mthuli Ncube said: “the economy is showing signs of recovery albeit with a number of challenges and risks. Indications are that the economy will grow by 6.3% against the original budget projection of 4.5% and 4.8% estimated for 2017.

“With this projected growth Zimbabwe will join the 6% club of African countries growing at more than 6% per annum.”

Ncube said impressive performances in mining and agriculture would anchor the growth, but pointed to myriad challenges affecting the country’s economy, such as public debt of US$17 billion.

“The growth trajectory faces risks and challenges which are related to the following: foreign currency and cash shortages; unsustainable high budget and current account deficits; emerging inflation pressures; slow-moving re-engagement process; infrastructure deficiencies; and weak social service delivery,” the minister said.

Ncube, a former dean of business studies at Wits University, was one of the technocrats appointed into President Emmerson Mnangagwa’s cabinet in September.

Creditors

He said the government would continue dialogue with creditors to address its arrears.

He said the treasury was accelerating the process of re-engagement with international creditors in order to clear arrears on external debt. These included the African Development Bank, the World Bank and the European Investment Bank.

“Simultaneously, treasury is engaging key Paris Club creditors with a view to restructuring US$2.8bn owed to them.

“Such debt resolution will help restore the international credit standing of Zimbabwe, resulting in improved access to new external credit lines and investment flows,” Ncube said.

Source: CNBC Africa