Zimbabwe’s economy to defy drought odds, says Fin

BY NOKUTHABA DLAMINI 

In his midterm budget presentation for 2024 , Finance Minister Mthuli Ncube outlined the government’s fiscal strategy to navigate the challenges posed by the El-Nino induced drought, while maintaining a stable economy.

“The fiscal policy thrust and macro-fiscal framework of the approved 2024 National Budget remains unchanged under the theme ‘Consolidating Economic Transformation’,” Minister Ncube stated on Thursday at the National Assembly.

Despite the drought’s impact, the government’s priority is to “alleviate the impact on vulnerable households and the economy, as well as ensuring that the economy emerges stronger and more resilient going forward.”

Minister Ncube emphasized the need to address the elevated food assistance needs of citizens, while maintaining a stable economic environment.

The introduction of the ZiG currency in April 2024 has brought “relatively stable prices and exchange rate stability,” according to Ncube.

To maintain this stability, the government will implement supportive tax and expenditure policies to increase demand for the local currency, complemented by monetary policy that manages market liquidity.

Looking ahead to the end of the year, Ncube outlined measures to protect the domestic currency and restore macro-economic stability. “Containing expenditure pressures and major expenditure heads such as the wage bill and debt servicing will be critical in order to avoid monetising the budget deficit,” he cautioned.

The re-calibrated 2024 Macro-Fiscal Framework projects revenues of ZiG93.2 billion (22% of GDP) and expenditures of ZiG98.8 billion, resulting in a budget deficit of ZiG5.6 billion (1.3% of GDP).

Despite the drought, Ncube expressed optimism, stating, “The current stable economic environment, together with economic transformation and diversification underway, is expected to enable the economy to register positive economic growth of 2%.”