Online Reporter
Nqobile Bhebhe, Zimpapers Business Hub
EXPECTATIONS are high ahead of the 2025 Mid-Term Budget Review, which is widely anticipated to consolidate the prevailing economic stability while outlining a clear roadmap for sustained growth in the second half of the year.
The review, set to be presented soon by the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube, comes at a time when the economy is demonstrating signs of durable stability and resilience, following the introduction of the Zimbabwe Gold (ZiG) currency in April last year.
Strong performance in the mining sector and rising investor confidence have further bolstered optimism among policymakers and analysts regarding the economic outlook for the remainder of the year.
This mid-year fiscal policy review offers authorities an opportunity to recalibrate where necessary — reinforcing key macroeconomic measures, correcting imbalances, and responding to emerging domestic and global headwinds.
The Treasury aims to maintain the current positive trajectory to achieve the targeted six percent economic expansion, following a slowdown to two percent in 2024 due to the El Niño-induced drought, which destroyed nearly 70 percent of agricultural output.
Agriculture, one of Zimbabwe’s main economic sectors, accounted for approximately 11,5 percent of GDP in 2023. However, its contribution declined to 8,7 percent last year due to the drought.
Key expectations for the review include a focus on policy consistency and fiscal discipline, as the Treasury seeks to drive a strong rebound in growth this year.
This follows the Zimbabwe National Statistics Agency (ZimStat)’s recent revision of the country’s 2024 GDP estimate to US$44,7 billion, up from US$35,2 billion, after an economic census that incorporated informal sector activity.
The development has highlighted the vast potential within the informal economy and the need for fiscal strategies to harness its value.
Reserve Bank of Zimbabwe (RBZ) Monetary Policy Committee member and economist, Mr Persistence Gwanyanya, said the mid-term review is critical to sustaining the momentum built since the introduction of the ZiG currency.
“We expect the Treasury to reinforce measures to sustain stability and economic resilience in the coming mid-term fiscal policy review. The tight monetary policy stance has largely held since the introduction of ZiG, and sustaining this requires complementary fiscal policies,” said Mr Gwanyanya.
A central expectation from the review is the introduction of measures to boost demand and confidence in the ZiG. With the Government controlling over 70 percent of the economy, it is expected to lead the charge through statutory instruments, public procurement and tax measures.
“It’s encouraging that authorities have already enacted a law requiring 50 percent of corporate taxes to be paid in ZiG. We expect further measures to increase the use of the local currency. Government has the power to influence the usage of ZiG in the economy through its procurement processes and, as already highlighted, through duties, taxes and other statutory fees,” he said.
The International Monetary Fund (IMF) recently acknowledged Zimbabwe’s progress in restoring macroeconomic stability, particularly following the launch of ZiG, and urged authorities to sustain deep structural reforms to solidify resilience.
This comes amid relative stability in both the exchange rate and inflation, which has boosted market confidence and created a more predictable environment for business and economic growth.
The central bank has already presented evidence of a rapidly stabilising economy, revealing in its second-quarter economic snapshot that local currency monthly inflation has averaged 0,5 percent since February.
Economist Ms Alice Chikonzi said the IMF’s recognition presents a unique opportunity for Zimbabwe to consolidate credibility, attract investment, and move closer to international re-engagement.
“The recent IMF commentary should not just be seen as a pat on the back, but as a signal to build stronger institutions, deepen reforms, and show investors that Zimbabwe is serious about economic transformation,” said Ms Chikonzi.
She said the Mid-Term Budget Review must outline measurable reform milestones, particularly in areas such as fiscal transparency, debt restructuring, and institutional efficiency.
“If we can demonstrate clear commitment to reforms — such as improving public financial management, formalising the informal sector, and boosting transparency in procurement — we open the door to stronger investor confidence and potentially renewed access to concessional financing,” she said.
Formalising the informal economy is also emerging as a strategic priority, given its significant yet untapped contribution to GDP.
“With a revenue-to-GDP ratio of more than 16 percent — compared to the average of 10-15 percent for developing countries like Zimbabwe — it’s clear that a significant portion of the economy remains unaccounted for.
“The recent economic census confirms this. After accounting for the previously unrecorded economy, GDP is now estimated at US$44,7 billion, up from US$35,2 billion in 2024. This underscores the need for measures to incentivise this sector to contribute to the fiscus,” said Mr Gwanyanya.
The Treasury is also expected to address pressing debt issues. Ms Chikonzi noted that public debt, particularly short-term domestic instruments, remains a major fiscal risk.
“Public debt, especially short-term domestic instruments, continues to pose risks to fiscal sustainability. The cost of servicing this debt is high and crowds out spending on social and productive sectors.
“The Mid-Term Budget Review must clearly outline a debt management framework that focuses on extending maturities, reducing borrowing costs, and improving transparency in debt reporting and contracting,” she said.
Her sentiments echo those of several economic analysts who have urged the Government to use the current economic stability as a platform to restructure debt obligations and improve creditworthiness.
Economist Mr Tinashe Dube said that while the economy has stabilised, the review must now shift focus from stabilisation to growth acceleration by supporting productive sectors and unlocking domestic demand.
“To achieve a 6 percent growth rate, the Mid-Term Fiscal Policy must prioritise targeted support for high-impact sectors such as agriculture, manufacturing, construction, and SMEs. These are the engines of job creation and export growth,” said Mr Dube.
He urged the Government to enhance capital expenditure efficiency, align public procurement with local industry capacity, and boost liquidity to productive sectors through structured financing models.
“Policy stability alone is not enough. There must be fiscal stimulus directed at domestic production, particularly in value chains where Zimbabwe holds a comparative advantage,” he said.
Mr Dube added that empowering SMEs, de-risking agriculture, and ramping up support for domestic manufacturing are essential if Zimbabwe is to transition from recovery to transformation.
As the country counts down to the Mid-Term Budget Review announcement, expectations are high that the policy statement will consolidate recent gains, broaden the growth base, and advance Zimbabwe’s re-industrialisation agenda.
“Ultimately, the 2025 Mid-Term Budget Review is more than a fiscal checkpoint — it is a strategic opportunity to refine and accelerate Zimbabwe’s development agenda. By maintaining stability, responding to IMF reform recommendations, driving local currency usage, unlocking productivity, and supporting industrial growth, the Treasury can lay a firm foundation for achieving the six percent growth target and positioning the country for lasting economic transformation,” said Mr Dube.
