ZIMBABWE will miss the ZW$57,8 billion 2020 revenue collection target due to the impact of the Covid-19 pandemic which is projected to shrink the global economy by 3%, according to the latest forecast from the International Monetary Fund (IMF).
The IMF has forecast that Zimbabwe’s economy, already buffeted by severe headwinds, will contract by 7,4% as the effects of the pandemic become more pronounced.
The contagion was first detected in China in December last year before rapidly spreading across the world, claiming more than 140 000 lives and infecting over 2,1 million people.
Ongoing computations of Zimbabwe’s quarterly revenue figures by the Zimbabwe Revenue Authority (Zimra) and Treasury reveal that collections will drop, as the distressed economy reels from the impact of Covid-19.
With Zimbabwe nearing the end of a 21-day lockdown that was declared by President Emmerson Mnangagwa earlier this month, Zimbabwe this week missed out on grants availed by the IMF to cushion indebted countries as the pandemic rapidly spreads.
The country has so far recorded three deaths from 23 confirmed cases.Zimra commissioner-general Faith Mazani this week told the Zimbabwe Independent that preliminary revenue collection data ahead of publication of the entity’s quarterly report this month show that collections will take a knock, as the economy reels from the impact of the pandemic, which has slowed global economic growth.
Mazani said: “We are working on our quarterly revenue report. Our targets are based on GDP figures. By end of this week we will have finalised that together with the ministry of finance. We haven’t yet agreed on figures. But definitely there is going to be a drop (in revenue collections).”
This year’s revenue collection target was predicated on a raft of measures introduced by Treasury under the Transitional Stabilisation Programme, which seeks to rein in runaway inflation and foster currency stability, among other macro-economic objectives.
Atlas Mara, a local financial and markets research institution, last week cautioned that inflation, currently hovering around 600%, would quicken to 1 000% by year-end, as the effects of the pandemic on the economy sink in.
Last year, Zimra collected ZW$23,19 billion in revenue, against an annual target of ZW$18,60 billion. The surge in revenue was largely driven by inflationary pressures.
During the last quarter of 2019, revenue collection surpassed the target by 24%, standing at ZW$11,7 billion.The projected dip in revenue comes at a time the Confederation of Zimbabwe Industries has cautioned that 88% of companies are struggling to access the export markets as most countries are on Covid-19 lockdown.
Zimbabwe’s distressed companies, hamstrung by the currency volatility crisis, prolonged power cuts and steeply priced raw materials, are currently grappling to compute a stimulus package required to keep operations afloat.