Finance and Economic Development Minister Professor Mthuli Ncube has stuck to his guns, maintaining that the country is going to achieve 3 percent economic growth for 2020 in the face of independent figures claiming the economy could contract by as much as 13 percent.
The Treasury chief said while he is open to reviewing the projection around mid-year, the country’s prospects look promising on the back of good global commodity prices and the rains that were received around the country over the past fortnight, rekindling hopes in the agricultural sector.
“I have seen the forecasts doing the rounds, the EIU (London-based Economist Intelligence Unit) in particular, showing a very huge negative growth (minus 13 percent), but we are optimistic as Government. We projected growth to be at 3 percent.
“We have our reasons. It’s been a better rainy season, stronger commodities and a more expansionary fiscal space. Our forecast on productivity is what will deliver this growth,” said Minister Ncube.
The minister, who is former African Development Bank (AfDB) vice president, said this during a pre-Davos Special with the Mint, which was aired on ZTN’s online platforms on Thursday night.
This comes as United Kingdom-domiciled global business intelligence entity, the EIU, last week predicted that the Zimbabwean economy would shrink by 13 percent.
Minister Ncube highlighted that his projections were also in alignment with the World Bank and International Monetary Fund (IMF).
“We have seen a similar figure from the World Bank, of a projection of a positive 2,7 percent rate of growth. The IMF’s growth forecast is just above one percent and they have similar reasons as us.
“I am not sure where this figure of whatever percent is coming from, but those are our reasons for this scenario,” he said.
According to African Chamber of Commerce board member Mr Langton Mabhanga, Zimbabwe’s growth prospects look promising.
But economists have said the minister’s 3 percent projection remains “conservative”, with Mr Persistence Gwanyanya pointing out that he sees little to no growth in the Zimbabwean economy this year.
“The obtaining values on the ground show that the economy will see little to no growth this year. If growth is going to be recorded, it is likely going to be very minimal. In my opinion, the minister may adjust this forecast as the year progresses,” Mr Gwanyanya said.
Some economists are seeing negative growth for 2020 in Zimbabwe, with ranges of between -2.5 percent and -6 percent. However, Minister Ncube — who anchored 2020 growth prospects on favourable metal prices and agriculture — said the country’s fortunes were improving following the rains received over the past two months, thereby raising hopes of a better harvest.
Zimbabwe is an agro-based economy. The agriculture sector contributes about 16 percent of its Gross Domestic Product (GDP), 60 percent of raw materials used in the production of goods and employs about 70 percent of the population.
Further, agriculture contributes about 40 percent of Zimbabwe’s export earnings, while the sector is the main source of revenue for producing companies since sound harvests boost customers’ disposable incomes.
Farmers’ hopes were rekindled by the rains that started pounding most parts of the country a fortnight ago. Some parts of Mashonaland Central Province recorded above 60 millimetres of rainfall.