Finance and Economic Development Minister, Mthuli Ncube is optimistic of economic recovery efforts government is undertaking in light of a myriad of challenges the country is grappling with, a latest ministerial statement shows.
Zimbabwe’s economy contracted six percent last year following the adoption of a local currency but is projected to rebound by 2.7 percent this year.
But faced with energy and fuel shortages, hyper inflation, low productivity levels and arguably the region’s highest unemployment rate, most indicators are pointing in the red yet Mthuli is buoyant.
“Zimbabwe’s economy will overcome the numerous hurdles which lay before us on the path towards prosperity. These obstacles are patent, and in some cases potent. But with hard work, proper planning, and monetary and fiscal discipline, Zimbabwe will get out of the current economic rut,” he stated.
The Minister said government is focusing on strengthening resilience against climatic forces that have hampered agriculture output.
“We are already investing in climate proofing our agriculture, including new irrigation techniques and drought resistant crops,” he added.
But top of Zimbabwe’s list of worries are the run-away inflation that has sprung beyond 500 percent year on year and the urgent need to set up buffers against ravaging effects of food shortages from the impending drought that have already started to bite.
Roller meal, which makes Zimbabwe’ staple food is in short supply and as of Tuesday evening, its subsidized price went 40 percent up, to $ 70 per pack of 10 kg, a development analysts have already predicted is highly likely to spike inflation further.
“As we look forward to growing our economy, it is incumbent upon us to rein in inflation as quickly as possible. This is crucial for investment. This is vital for job creation. Month on month inflation is already stabilizing, down to approximately 16%. Of course, annual inflation remains high. We do not hide this, nor was this unexpected. That is what happens when you liberalize a currency. But this process of reforms is a long-term necessity for our economy,” Mthuli said.
But government’s economic blueprint, the Transitional Stabilization Program (TSP), has failed to meet its intended targets on time and government is buying more time. The subsidy program on urban transport, fuel and roller meal is not addressing the underlying problems.
Mthuli however believes the economic recovery efforts have taken longer than anticipated as a result of unforeseen natural disasters that befell the country last year.
“Some of these challenges are out of our control. Take Cyclone Idai in March of last year for example. The extreme weather phenomenon destroyed lives and livelihoods. This meteorological mess was followed by another, as drought struck across our lands. Food output has thus been severely hampered by these outside forces; and we have been left with no choice but to subsidize, import and rely on help from the international community to avoid total crisis,” he added.
However critics have castigated authorities for lack of foresight in the wake of series of droughts in recent years which by now should have been well planned for.
“Its poor planning by the authorities because since the year 2000 we have had a series of droughts nearly every three years and its even getting worse going forward. The planning should put into consideration the high possibility of droughts and floods yet each year there is no budget set aside to cover for these natural disasters,” economic analyst, Pepukai Chivore said.
Zimbabwe is going through its worst economic crisis in a decade amid brewing internal political tensions that could worsen the situation.
