By Africa Moyo
Deputy News Editor
Confirmation by the World Bank that Zimbabwe’s economy will grow this year despite challenges that include Covid-19, shows that economic reforms undertaken by the Government since October 2018 are bearing fruit, Finance and Economic Development Minister Professor Mthuli Ncube said yesterday.
Gross Domestic Product (GDP) has been projected to grow by 3,9 percent this year in the latest World Bank forecast although the African Development Bank (AfDB) has previously projected a 5,6 percent economic growth in Zimbabwe year driven by recovery in the agriculture, mining and tourism, together with increased public and private investments.
In an interview, Prof Ncube was excited by the World Bank’s endorsement made last Friday.
The positive report from the World Bank is an independent assessment of the economic situation and validation that the reforms have borne fruit, he said. It affirms Government assessment that the economy is in recovery, even in the face of the Covid-19 pandemic.
The policies that Government has embarked on in the form of fiscal consolidation, monetary policy conduct and introduction of the Zimbabwe dollar, and introduction of the auction have resulted in falling inflation, stable exchange rate, and reduction in uncertainty in general. The twin deficit of a fiscal deficit and current account deficit had been eliminated.
This was achieved without external financial support, and in the face of climate shocks and disease shocks.
The latest intensification of the lockdown rules should have little impact on the economy since all businesses will be remaining open, so there is unlikely to be any slowing of growth. The main effect of the intensification is in the non-economic social and religious areas,
The announcements made in order to deal with a potential third wave of the pandemic are aimed at saving lives while balancing this with continued economic activity. The vaccination programme is continuing.
The economy is still expected to continue on its recovery path this year, driven by increased agricultural output, industrial growth, strong global commodity prices in the mining sector, increased infrastructure spending by Government and private sector, he said.
As the Second Republic pursues development that leaves no one behind, Prof Ncube believes the establishment of the Veterans Investment Holding Company at the weekend by President Mnangagwa, will help drive economic growth going forward.
Prof Ncube said the establishment the company, a wholly-owned entity of the Veterans of the Liberation Struggle Fund, was a key milestone. The company will in turn hold 100 percent of equity in several subsidiaries: the Veterans Agriculture Company (Pvt) Ltd, Veterans Mining Company (Pvt) Ltd, Veterans Tourism Company (Pvt) Ltd, Veterans Financial Services (Pvt) Ltd, the Veterans Health Services (Pvt) Ltd and the Veterans Property Development Company.
Prof Ncube said: “All these companies are not just an empowerment tool, but through this structure, it is our sincere view that the Veterans Investment Corporation and its subsidiaries, is expected to grow exponentially and become an economic juggernaut in itself, given the quantum and value of assets that is being invested into these subsidiaries of Veterans of the Liberation Struggle Fund.
“With Government support, coupled with the sound management and guidance by the Veterans of the Liberation Struggle Board, these entities will go a long way in contributing to the overall growth of the economy, the creation of decent jobs and the generation of value critical for the attainment of our Vision 2030,” said Prof Ncube.
In the 2021 Budget, Prof Ncube estimated growth of 7,4 percent. According to the World Bank, Zimbabwe Economic Update (ZEU) launched last Friday, the growth would be led by the good harvests on the agricultural front, adaptations to the Covid-19 disruptions as well as the control of inflation.