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Business Reporter
AGRICULTURE, mining and tourism sectors are expected to underpin the forecast 3,2 percent economic growth this year but emerging vulnerabilities and challenges appear to slow down the development trend.
Government is now working on improving the doing business environment to attract foreign capital as it recognises that foreign direct investment is needed to provide risk-free capital inflows into the economy.
“To this end we are working frantically to address those factors that negatively impact on inward foreign investment flows (Labour Reform and ease of doing business).
“During the past year we have been working to produce a Joint Venture Legal Framework.
“I hope this will be finalised and adopted by Cabinet in the next few months,” said Finance and Economic Development Minister Patrick Chinamasa.
He was addressing a workshop on the visit of officials from the National Development and Reform Commission.
An Overview of the State of the Economy presented by the Secretary for Finance and Economic Development Willard Manungo yesterday shows that economic growth, although still positive, has been slowing down from 2013, on the backdrop of emerging vulnerabilities and challenges.
Some of the challenges include severe liquidity constraints limiting industrial capacity utilisation; low savings and hence limited domestic investment; inadequate external capital inflows associated with sanctions; widening current account balance; a huge debt overhang which is largely in arrears; and financial sector vulnerabilities.
“Against this background, GDP growth is expected to slow to 3,1 percent in 2014 from 4,5 percent in 2013.
“Growth in 2015 is projected at about 3,2 percent, riding on agriculture, mining and tourism. Economic growth, although still positive, has been slowing down from 2013, on the backdrop of emerging vulnerabilities and challenges,” said Mr Manungo.
Agriculture remains the mainstay of the economy with a remarkable growth of 23,4 percent in 2014.
“Prospects for the 2014 /2015 agriculture season remain positive, and production in the main crops – maize, tobacco, cotton, among others – is expected to remain on an upward trend.
Overall agricultural growth for 2015 is projected at 3,4 percent,” said Mr Manungo.
The mining sector growth is based on the beneficiation of the country’s diverse mineral resource as it helps mitigate some of the challenges such as softening of international mineral prices.
Online Reporter