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Kuda Bwititi in Victoria Falls
Finance and Economic Development Minister Patrick Chinamasa projects 2,7 percent growth in 2016, with nominal GDP expected to hit nearly US$15 billion.
State arms have been primed to reach these goals.
A committee chaired by Vice-President Emmerson Mnangagwa will intensify domestic resource mobilisation, Minister Chinamasa said, while the Comptroller and Auditor-General’s Department has been revamped to stem public sector maladministration and abuse of office.
A Budget Strategy Paper has been formulated to provide economic revival guidelines; and there are expectations of fresh funding from bilateral creditors once arrears are cleared.
Government is also going to sell-off underperforming parastatals and improve the ease of doing business.
Minister Chinamasa yesterday told legislators attending Parliament’s Pre-Budget seminar that Treasury expected revenue collections of US$3,75 billion against expenditure of US$3,9 billion – a US$200 million deficit.
Nominal GDP is set to grow to US$14,6 billion while annual inflation will be about -1,2 percent.
Rallying for “permanent optimism”, Minister Chinamasa called for national consensus for economic revival, saying Zimbabwe would achieve its growth targets despite current challenges.
“Although we are in the midst of a storm, I am sure that we have crafted our paths to get out of this storm … The economy is expected to grow by 2,7 percent.
“The significant contributors to this growth are the financial services sector, which is expected to grow by five percent, construction sector is set to grow by 4,2 percent, particularly residential. Electricity generation will increase by 3,6 percent and return to optimal levels in 2016.
“Tourism is set to grow by 3,5 percent due to positive responses from the marketing strategies being undertaken by the ministry. Mining growth is 2,8 percent.”
Minister Chinamasa said revamping of the Auditor-General’s Office was on track following recruitment of an expert to deal with damning reports that were not followed-up on.
“What I need to mention Mr Speaker, Sir, is that we have now recruited an expert for the Accountant-General’s department. We had a weak department. We have now recruited someone who retired from PriceWaterhouse(Coopers), he was formerly executive accountant-general. We have asked him to head that department and we have directed him to set up a dedicated team to read the entire Auditor-General’s reports and advise appropriate action.
“He is also going to read all parastatals’ statements so that we know which parastatals are performing and whether they are adhering to corporate governance requirements.”
On international creditors, Minister Chinamasa said: “What we said to them is that we will not just clear arrears for the sake of it, but the clearance of arrears will be subsequently followed by the coming in of new money. So this is what is going to happen. We are not just going to pay the arrears and get nothing at the end of the day.”
Minister Chinamasa also pointed out potential headwinds: “The downsides to the macroeconomic framework are likely to be seen through a possible drought due to the continued impact of climate change. Potential economic slowdown particularly in emerging markets such as China. Appreciation of the US dollar also has negative connotations as some traders may not be able to export to South Africa competitively. Depressed commodity prices could also affect our revenue targets especially for the mining sector.”
The minister said FDI projections remained low at US$614 million for 2016.
He said Zimbabwe last year experienced budget revenue shortfalls of US$460 million but growth prospects remained high.
“The expectations are that the macroeconomic environment will remain stable, backed by the successful implementation of consistent and credible policies. Rationalisation of the civil service will be pursued and a rebound in the global economy is expected with global economic growth set to reach 3,6 percent from 3,1 percent. This should help us in our economic growth plans.”
Under the Budget Strategy Paper, Government wants 2,1 million hectares of land to be put under grain (1,7 million for maize, 485 000 for small grains).
There will be greater support for irrigation backed by US$60 million from international partners. Other major inputs include expected loans from India Eximbank (US$87 million), Brazil and Belarus.
On parastatatls Minister Chinamasa said: “Progress in this regard has been slow but we are looking at making a top priority for the 2016 reform agenda. We are not going to hesitate to put some parastatals under the hammer. We should be able to say, you are not performing so please get out. We must be harsh enough to say this because tiri kunyarana.”
He revealed that Government would continue rationalising the civil service and trimming the wage bill.
Online Reporter