Finance and Economic Development Minister Patrick Chinamasa yesterday dismissed the World Bank projection that the Zimbabwean economy will this year grow by 1,5 percent, insisting it will grow by 2,7 percent on the back of concerted efforts the government was making to stimulate the productive sectors.
The World Bank is arguing that the El Nino induced drought will choke the performance of the economy.
Launching its first Zimbabwe Economic Update magazine, the World Bank said the economy would continue to grow by an average of 2 to 3 percent inspired mainly by the growth in the services sector.
“A poor growth and worsening external environment contributed to a deceleration in 2015 and growth is projected at 1,5 percent in 2016,”
said World Bank senior economist Mr Johannes Herderschee.
“The GDP (Gross Domestic Product) growth rate slowed from 3,8 percent in 2014 to 1,5 percent in 2015 and 2016, due largely to the impact of an on-going drought, which is taking a heavy toll on agriculture production.”
Agriculture is dubbed the mainstay of the Zimbabwean economy, with its performance having ripple effects on the rest of the economy. Low production and a slide in international mineral prices is expected to minimise contribution of the mining sector t growth.
But Finance and Economic Development Minister Patrick Chinamasa insisted the economy would grow by 2,7 percent this year on the back of efforts that government was putting to boost productivity in the manufacturing and mining sectors.
“I do not think the 1,5 percent growth (projection) is correct,” he said, adding: “We are not sleeping trying to make the productive sectors work.”
“We are optimist that we will achieve the 2, 7 percent growth by year end through implementation of the policies which will boost the mining, agriculture and manufacturing.
“I a m very happy that we are in the right direction and the major policies that are meant to move our country forward are now in place and what left is implementation,” he said.
Minister Chinamasa said agriculture, mining and manufacturing would make significant contributions to the economy’s growth.
While the World Bank said low investment would also impact on overall economic output, Minister Chinamasa said efforts were on-going to improve the environment.
“It is not an event but a process. Any issues that demean the attractiveness will be addressed,” he said, while calling on investors to speak out on issues they have reservations about.
Minister Chinamasa said the Zimbabwean economy was resilient as a number of people had long predicted its demise, which never came to pass.
“Everyone who has commented on Zimbabwe has said we should be finished by now. Even when I was appointed as Finance Minister they said the economy would be on its knees,” he said.
Mr Herderschee said it was imperative that the country addressed its negative balance of trade, which has been averaging $3 billion in the last few years.
He said the country’s growth rate could surpass expectations if it also progressed with efforts to mend strained relations with international finance institutions and the western world.
“Fundamentals for growth are still strong but the headwinds are increasing,” he said, adding that the country’s literate and hard working population was a key factor in efforts to boost recovery and growth.
Meanwhile, the World Bank extended a $32 million grant to Zimbabwe under the Zimbabwe Reconstruction Fund (ZimREF) to finance implementation of a number of projects.
ZimREF is a pool of donor funds from Denmark, European Union, Norway, Sweden, Sweden and the World Bank, managed by the World Bank for developmental programmes.
The $32 million will specifically go towards improving water and sanitation in seven small towns, modernising the country’s public procurement system, strengthening transparency and accountability in public finance management and expanding innovations in maternal and child care financing.- BH24 reporter/New Ziana