FINANCE and Economic Development Minister Professor Mthuli Ncube is confident Zimbabwe will meet its 2021 economic growth target of 7,4 percent driven by agriculture recovery and commodity price boom.
This comes as Zimbabwe intends to import up to 7,5 million doses of Covid-19 vaccines in pursuance of national herd immunity, which is critical if the Government is to open up all economic sectors more freely.
The country has witnessed a rise in positive cases over the past few weeks, prompting Government to announce and revert to a stricter level four national lockdown in order to stem the spread of the respiratory disease.
Minister Ncube said this during a webinar meeting with the Insurance and Pensions Commission (IPEC), stating that Government was pleased with the state the economy in terms of its growth trajectory.
“As Government we are quite pleased in terms of the economic trajectory, we are in recovery, we should expect growth of just over 7 percent. Inflation is falling year on year, month on month bumps along, but the trend is downward,” he said.
The International Monetary Fund (IMF) and the World Bank, in their recent updates, projected that Zimbabwe’s economy will expand by 6 percent and 3,9 percent this year if the right policies are implemented.
The country registered an economic recession last year on the back of drought and the negative impact of the Covid-19 global pandemic that caused global shutdown of economies worldwide, including in Zimbabwe.
Zimbabwe’s annual inflation rate fell to 106,6 percent in June 2021, from 161.9, percent in May, and the Reserve Bank of Zimbabwe (RBZ) has projected the rate to fall below 55 percent this month and 25 percent by December.
The finance minister noted that the inflation decline was being driven by a stable exchange rate in the main, supported by prudent monetary and fiscal policy management as well stable current account position.
“All these things are conspiring positively to stabilise the economy.
The (various economic) sectors as well have respondent positively, look at agriculture which is revering economy, it has recovered quite spectacularly.
“Mining as well, which is quite stable, in fact, we are probably on the verge of a commodity super-cycle. The manufacturing sector as well; look at (industrial) capacity utilisation numbers, those are rising,” Minister Ncube said.
A broad and powerful rally in commodity markets has gathered steam in recent weeks, fuelling expectations among traders and analysts that a ‘super-cycle’ has kicked off, as the global economy recovers.
Zimbabwe is home to over 40 mineral occurrences among them gold, platinum, chrome, diamond, lithium and coal. Mining contributes more than 60 percent of foreign exchange receipts and 12 percent to GDP.
The Government’s infrastructure development programme, Minister Ncube said, was accelerating, presenting a huge investment opportunity for local companies, including those in insurance and pension funds.
The minister said the exchange rate, which has largely defined prevailing stability, continued to be characterised by discrepancies with the open market rate, but what mattered most is stability of the rate.
“(Exchange rate) stability is the most important thing because that engenders predictability in the economy, then it also ensures value preservation in domestic currency,” Minister Ncube said.
The Treasury chief said Government had the financial resources to procure significant quantities of Covid-19 vaccines to administer jabs, as the country seeks to achieve national herd immunity of at least 60 percent.
Minister Ncube said Zimbabwe will incrementally import vaccines between now and September totalling about 7,5 million, and administer jabs at an average rate of 50 000 daily until the desired target is achieved.
He said incremental growth in the vaccinated population will allow Zimbabwe to open up the economic much more freely, which was critical for the country to realize its growth targets without fear of the Covid-19.