THE projected 3,2% growth for 2015 by Finance minister Patrick Chinamasa in his US$4,1 billion 2015 national budget which he presented yesterday will remain a pipedream if various fundamentals of the economy are not addressed, analysts have said.
Chinamasa projected a growth of 3,2% for 2015, a marked decrease from the ambitious 6,1% growth he had projected for 2014 which he later whittled down to 3,1%. Growth rate, he said, has been subdued by the chronic liquidity shortages in the economy, coupled with low domestic savings, poor investment inflows and power supply deficits.
“A stable macro-economic environment, coupled with planned investments in agriculture, mining, communication and other infrastructural projects, including in power generation and housing, will among others spur growth forecast at about 3,2% for 2015,” Chinamasa said.
He projected 3,4% growth in agriculture underpinned by a good crop performance.
“Prospects for the 2014/2015 agriculture season remain positive, and production in the main crops — maize, tobacco, cotton, among others — is expected to remain on an upward trend. Overall agricultural growth for 2015 is projected at 3,4%,” he said.
“This is against the backdrop of government’s continued commitment to prioritise food security, active private sector participation in financing agriculture, and improvements in farming methods.”
Other growth projections include the mining sector at 3,1% driven by coal, nickel, gold and chrome; manufacturing sector 1,7%, tourism 4,7% and construction 2,9%.
Economist Godfrey Kanyenze, however, said Chinamasa’s growth projections of 3,2% is questionable considering the continued decline of mineral prices and lack of social cohesion.
“The growth forecast is problematic. If you look at the fact that mineral prices are projected to decline by 6% in 2015-2016 that already puts pressure on the 3,2% growth prospect,” Kanyenze said.
Chinamasa said the growth was anchored on the presumption of government implementing “Ease of Doing Business” reforms.
But Kanyenze noted the glacial pace at which government implements reforms as shown by the aligning of only three of the 400 pieces of leglislation to the constitution since it came into force last year.
He said there was neither political will nor courage to implement the reforms that would spur the country to the envisaged 3,2% growth in 2015.
Kanyenze said this is worsened by the current infighting in Zanu PF which somewhat renders government dysfunctional.
The projected growth rate “is not anchored on the reality on the ground”, and Chinamasa will be “very lucky” if he achieved half of that projected growth, he said.
University of Zimbabwe economist Fanuel Hazvina said without implementing basic fundamentals reforms such as mining beneficiation and transparency in the mining sector, the envisaged growth is highly unlikely with companies shutting down at an alarming rate.
He said the growth will not be achieved without revisiting the Indigenisation policy, adding that investors want government to revisit the law instead of vague clarification as Chinamasa did.