Zimbabwe’s economy to grow 6pc in 2025

ZIMBABWE’S economy is projected to experience a substantial six percent growth in 2025, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, has said.

This growth is attributed to anticipated normal to above-normal rainfall, which would boost agricultural output. Additionally, the economy is expected to maintain a steady five percent growth rate beyond next year.

Prof Ncube attributed this resilience to the effective implementation of strategic Government policies and reforms. He made these remarks during a pre-budget seminar in Bulawayo.

“The effective implementation of these policies has led to the development of a robust economic environment, characterised by adaptability and the capacity to withstand these external shocks ensuring long-term prosperity for the nation,” he said.

“Going forward into 2025, the economy is expected to recover on account of expected better rainfall season.”

The seminar, running under the theme “Building Resilience for Sustained Economic Transformation”, highlighted that the stability of electricity supply, a stable exchange rate and controlled prices would further contribute to economic growth.

Prof Ncube emphasised the Government’s commitment to fiscal consolidation, targeting a budget deficit of less than three percent of GDP by refocusing expenditure on key assets that support economic growth in line with the National Development Strategy 1 (NDS1).

He noted that despite challenges posed by supply chain disruptions, geo-political tensions and an El-Niño-induced drought, Zimbabwe’s economy has in the first 10 months of the year demonstrated remarkable resilience. Looking ahead, 2025 promises recovery, supported by a favourable rainfall season and strategic Government initiatives.

The 2025 National Budget will prioritise several areas, focusing on agriculture (projected to grow by 12,8 percent), electricity (10,6 percent), ICT (9,9 percent) and mining (5,6 percent).

These sectors will be the main drivers of growth, with wholesale and retail, mining, agriculture and manufacturing expected to contribute significantly to GDP.
Prof Ncube attributed agriculture’s projected growth to climate-smart conservation agriculture practices under the Pfumvudza/Intwasa scheme, as well as improved input support, extension services, mechanisation and irrigation development.

“This is coupled with the continuation of input support programmes for farmers, improvement in extension services, mechanisation and irrigation development. In 2024, agriculture growth is projected at -15 percent on account of El-Nino-induced drought. In the outlook to 2025, growth is projected at 12,8 percent on account of normal to above-normal rainfall,” he said.

Prof Ncube also emphasised the need for deeper investment in irrigation infrastructure to mitigate the effects of future droughts.

He said while the mid-term NDS1 review identified notable achievements in all 14 thematic areas, the 2025 National Budget will give impetus to the implementation of programmes and projects as outlined in the 2025 Budget Strategy.

“The proposed national policy priorities for 2025 seek to address gaps identified during the NDS1 mid-term review, as well as give implementation impetus for the final year of the National Development Strategy 1: 2021-2025 (NDS1),” said Prof Ncube.

Regarding fiscal policy, Government aims to collect ZWG140,2 billion in revenue while projecting expenditures of ZWG140,5 billion. The budget will allocate ZWG78,5 billion to employee compensation, ZWG38,2 billion for operations and ZWG23,8 billion for capital expenditure.

To ensure economic stability, Prof Ncube said the Government will focus on supporting the domestic currency and maintaining a stable macro-economic environment.

He said the liquidity management committee will play a key role in co-ordinating fiscal and monetary policies to manage liquidity in the economy. Prof Ncube also highlighted plans to restructure the national debt to reduce servicing costs.
“Additionally, a comprehensive exercise to restructure the terms and conditions of the national debt will be implemented to address the unsustainable high servicing costs,” he said.

Prof Ncube said the 2025 budget will introduce tax reforms to provide relief to taxpayers, enhance revenue generation, and strengthen tax administration through digital technologies. The Zimbabwe Revenue Authority (Zimra) will integrate its system with various Government bodies to improve tax collection efficiency.
Prof Ncube said going forward, other taxes, including payment for Government services, will also be paid exclusively in local currency.

Turning to the 2025 taxation proposals, Prof Ncube noted that they will focus on further streamlining tax expenditures, introducing automatic registration of qualifying micro, small and medium enterprises for value added tax (VAT), Pay as You Earn (Paye) and Corporate Income Tax (CIT), among other revenue heads in all economic sectors.

Also included are the enhancement of tax administration through the use of digital technologies and integration of the Zimra system to banks, the Central Vehicle Registry, Civil Registry, the Zimbabwe National Roads Administration (Zinara), the Procurement Regulatory Authority (Praz) and Government ministries, departments and agencies, among other institutions directly or indirectly linked to revenue collection.

“Prioritising key sectors, initiatives, or interventions will be crucial in ensuring that available resources are directed towards areas that will yield the greatest benefits and promote sustainable growth,” said Prof Ncube.