Oliver Kazunga
INCREASED spending on infrastructure development and measures to insulate the country against the projected El Niño-induced drought will be the major highlight of the 2027 National Budget that will be unveiled by Minister of Finance Professor Mthuli Ncube this week.
Substantial funds will be earmarked for the construction of roads, dams and irrigation facilities while strengthening food security.
The Government also intends to progressively reduce the wage bill from 52,3 percent of the Budget this year to 38,1 percent by 2030, allowing more resources to be channelled towards capital projects.
The 2027 Budget will be presented on Thursday.
Prof Ncube outlined the Government’s spending priorities last week while delivering a public lecture at the Zimbabwe National Defence University.
Treasury, he said, will channel more resources towards development projects as the Government seeks to stimulate economic growth and improve service delivery.
As a result, capital expenditure is projected to increase from 2,3 percent of gross domestic product (GDP) this year to 3,8 percent in 2027.
Treasury also expects the outlay to jump to 8,8 percent by 2030.
“The 2027 Budget shifts spending towards capital expenditure,” he said.
“Our medium-term path takes capital expenditure from 2,3 percent of GDP in 2026 to 3,8 percent in 2027 and 8,8 percent by 2030.”
Investment in infrastructure development, Prof Ncube said, was central to the country’s long-term economic transformation.
“Infrastructure-led growth is the bedrock of long-term growth and stability, and it is how the fiscus moves from consumption to creation,” he said.
Some of the targeted investments will support ongoing road construction and rehabilitation projects, dam construction, water supply infrastructure and rural electrification, while accelerating investment in irrigation to strengthen agricultural production.
Overall, it is envisaged that infrastructure development will reduce the cost of doing business and improve connectivity.
“Roads lower the cost of trade and keep our strategic corridors open,” he said.
Treasury is projecting revenue of US$12,8 billion in 2027, up from an estimated US$11,6 billion this year, against planned expenditure of US$13,3 billion, leaving a financing gap of approximately US$500 million.
Prof Ncube said the deficit would be financed prudently and remain within the National Development Strategy 2 (NDS2) fiscal sustainability targets.
“In 2027, we plan for a modest gap of about US$500 million, which will be financed prudently and within the NDS2 deficit ceiling, because the additional spending is directed towards capital and infrastructure,” he said.
The revenue projections reflect the Government’s continued efforts to expand domestic resource mobilisation.
Meanwhile, drought preparedness and food security are also expected to feature prominently in the forthcoming Budget as the Government moves to cushion the economy against the fallout from the El Niño weather phenomenon.
Zimbabwe’s economic growth is projected to slow from 5 percent in 2026 to 3,5 percent next year, largely due to the expected impact of reduced rainfall on agriculture and related sectors.
Prof Ncube said the country could face a cereal deficit of up to 541 881 tonnes during the 2026/2027 agricultural season, prompting the Government to put in place a six-pillar drought readiness strategy.
The measures include strengthening the Strategic Grain Reserve to 600 000 tonnes, expanding climate-smart agricultural production through Pfumvudza/Intwasa and accelerating irrigation development.
The Government is also targeting one million hectares under Pfumvudza/Intwasa, while promoting climate-resilient crops and encouraging farmers to insure their crops and livestock.
Other interventions will include facilitating grain and stockfeed imports to cover potential shortfalls, as well as strengthening livestock drought mitigation through improved access to water, grazing, feed and veterinary services.
“We anticipate an El Niño season in 2027, with a potential cereal deficit of up to 541 881 tonnes, and Government has accordingly put in place a six-pillar drought readiness strategy for the 2026/2027 season,” Prof Ncube said.
He said the strategy was designed to ensure that the country prepared for potential food shortages before they materialised.
“This is how a responsible State acts — before a shock, and not merely after it,” he said.
Treasury is also working on a medium-term growth plan aimed at raising the economy’s annual growth trajectory from an average of 5 percent to 7 percent.
Prof Ncube said faster economic growth was necessary to accelerate industrialisation, structural transformation, job creation and poverty reduction.
Treasury is also expected to maintain the fiscal and monetary policy coordination underpinning recent currency stability, with the country’s gold and foreign currency reserves projected to increase to approximately US$2,9 billion in 2027 from an estimated US$2,2 billion this year.
The accumulation of external reserves, Prof Ncube said, was important in strengthening the country’s capacity to withstand economic shocks and sustain confidence in Zimbabwe Gold (ZiG).
Annual ZiG inflation has declined from 95,8 percent in July 2025 to 4,3 percent in October 2026, while the exchange rate has remained relatively stable since the October 2024 adjustment.
Prof Ncube said Treasury would also seek to preserve the gains made in macro-economic stability through continued fiscal discipline and prudent management of public resources.
The 2027 Budget will be the second annual fiscal programme under NDS2.
