Higher Mining Growth As Zim Revises 4,6% GDP Down From 5,5% & Non-Recourse To RBZ Overdraft Facilities

Higher Mining Growth is expected according to Minister of Mines Winston Chitando’s projected Usd$12 billion mining economy still on track as Zimbabwe has managed to maintain macro-economic stability led by an astute Reserve Bank of Zimbabwe (RBZ) Governor Dr John Panonetsa Mangudya so far this year amid turbulent domestic and external headwinds, and now expected to close the year with revised Gross Domestic Growth (GDP) of 4,6 percent from the initial 5,5 percent.

Minister of Finance and Economic Development Professor Mthuli Ncube was speaking ahead of his 2023 national budget statement and said higher growth is expected from mining, accommodation and construction sectors with manufacturing also posting positive strides while the agriculture sector is expected to contract due to erratic rains received in the last season.

Professor Mthuli Ncube buttressed the positive economic growth trajectory, saying fiscal consolidation will be continued in 2023 in order to entrench the prevailing macro-economic stability, among other key principles to guide the budget.

Minister Ncube said this includes the need to, “Ensure non- recourse to Reserve Bank of Zimbabwe (RBZ) Governor Dr Mangudya’s overdraft facilities,”with Treasury expressing determination to “Cap fiscal deficit at below three percent of GDP, with strict control on consumptive expenditures in order to provide more resources towards development expenditures such as infrastructure and social services.”

The Finance and Economic Development Minister, in a Pre-2023 Budget Briefing outline seen by TechnoMag said next year’s budget statement will largely focus on “Deepening Economic Transformation”.

Minister Mthuli Ncube stated that the economy was growing, albeit at a slower rate when compared to 2021, on account of global disturbances and other adverse domestic factors.

“GDP growth for 2022 has been revised downwards from 5,5 percent during the 2022 budget to 4,6 percent during the mid-term review. Further reviews are still ongoing as we undertake these stakeholder consultations with any changes being announced during the budget presentation,” said Prof Ncube.

The Finance Minister said going forward the Government will strengthen the Public Finance Management System in order to address risks to budget sustainability, especially the accumulation of domestic arrears and extra-budgetary expenditures.

Minister Mthuli Ncube brings this at a time when the country’s total Public and Publicly Guaranteed (PPG) debt is estimated at $1,3 trillion for domestic debt and US$13,2 billion for external debt.

Prof Ncube said to ease the burden, rationalisation of subsidies and ensuring that such expenditures are explicitly budgeted for, quantified and approved through the annual estimates of expenditure, was critical.

“Disbursements by Treasury will be strictly limited to available revenue and within the approved budget, due diligence in Government procurement processes and the value for money concept,” said Minister Ncube.

The National Development Strategy (NDS1) objectives must be consistently adhered to and the need to create a resilient and complex economy, which can generate decent jobs and higher incomes, Professor Ncube said the forthcoming national budget will focus key high-impact priority areas.

The areas encompass, high economic growth and macro-economic stability, supporting productive value chains, optimising value in the country’s natural resources and development of critical infrastructure, ICTs and the digital economy.

Minister Ncube said unlocking opportunities in the youth, sport, arts and culture sector, women, gender equity and SMEs, devolution and decentralisation, are also part of the priority package.

This priority list also mainstreams human capital development, well-being and innovation, ensuring effective institutional building and governance, as well as image building, engagement and re-engagement with a focus on arears clearance and debt restructuring.

Pre-budget ideals take into account domestic and global economic developments and outlook, 2022 budget performance and projected outlook for next year, as well as domestic resource mobilisation measures.

Also this means Treasury has outlined key principles guiding the crafting of the 2023 National Budget statement in line with diverse stakeholder policy input gathered during the recent nationwide public consultative meetings.