By Kudzai Kuwaza
Government sees the economy growing by 4,5% in 2018 on the back of scaled-up agricultural financing, economic reforms and policy interventions, Finance minister Patrick Chinamasa has said.
“We are optimistic that the interventions we have come up with will help the economy,” Chinamasa said while presenting the 2018 national budget yesterday in parliament under the theme “Towards a New Economic Order”.
“On the domestic front, the 3,7% growth estimate for 2017 is underpinned by agriculture, mining, electricity generation and services sectors, mainly tourism and communication. In the outlook, growth is anticipated to remain above 4,5%, premised on government charting a new way forward with economic and investment recovery measures towards a ‘New Economic Order’, underpinned by strengthening of co-operation with global partners.”
Chinamasa projected that economic growth will reach 5,6% in 2019 before further increasing to 6% in 2020.
He projected 15,7% growth in 2017 for the agricultural sector on the back of the government’s co-ordinated interventions such as its command agriculture programme in partnership with the private sector.
“In addition, the expanded ‘command agriculture’ Programme, to include soya beans and livestock production, is expected to sustain growth of the sector,” Chinamasa said.
Mining, Chinamasa said, was expected to grow by 7,5% in 2017, with most minerals anticipated to record output gains in the medium term.
“This is being supported by modest recovery in international mineral prices for most minerals, including nickel, platinum, chrome and granite,” he said.
Chinamasa said mineral export receipts of US$2,5 billion are projected for 2018, up from US$2,3 billion in 2017.
The Finance minister said as at end of October 2017, overall mineral export receipts were around US$2 billion, against US$1,6 billion during the same period in 2016, representing 25,2% of the country’s total exports.
Chinamasa said that as at end of September this year, diamond output stood at 1,8 million carats, up from 1,3 million recorded during the whole of 2016.
The Finance minister said the consolidation of the diamond industry, together with the capitalisation of the Zimbabwe Consolidated Diamond Company, has contributed to marked improvement in output.
On coal production, Chinamasa pointed out, output rose 30 000 tonnes per month in the first quarter of 2017, to about 300 000 tonnes per month.
“This translates to cumulative coal output of 2.4 million tonnes by the third quarter, from 363 000 tonnes of the first quarter,” Chinamasa said.
Gold purchases by Fidelity Refiners stood at 17 163kg during the period January to September 2017. This is 12% higher than purchases of the corresponding period in 2016. Small-scale producers accounted for 51% of the delivered 17,2 tonnes.
“On the back of performance displayed during this period, the country remains on course to meet the target of 24,5 tonnes of gold deliveries through Fidelity for the entire 2017,” Chinamasa said.
He said the growth in manufacturing was estimated at 1%, with projections of 2,1% in 2018, benefitting from improved agro-processing value chains in foodstuffs, drinks, and ginning, also amid supportive import management measures.
He said the economy’s import bill remains high with imports estimated to rise to US$6,8 billion, from US$6,4 billion in 2016. This, he said, was despite a sharp decline in food imports.
Chinamasa said the country’s current account deficit, estimated at US$1 billion, remains unsustainable, and is financed mostly by debt, creating flows in the form of loans being contracted by both the private and public sectors.
He said banking sector deposits maintained an upward trajectory, increasing by 17,1%, from US$6,51 billion as at end December 2016, to US$7,62 billion as at end of September 2017.
Chinamasa said lending to the productive sectors of the economy constituted 70% of total sector loans as at 30 September 2017.
He said non-performing loans had been reduced from 20,45% in September 2014, to 8,63% as at end September 2017.