Online Reporter
Michael Tome
Business Reporter
FINANCE, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube says the 2025 National Budget is designed to balance out the economy and build the resilience needed to withstand future shocks.
The Treasury chief said this while addressing delegates at the post-budget breakfast meeting, organised by Business Weekly in partnership with the Confederation of Zimbabwe Industries (CZI) and the Ministry of Finance, Economic Development and Investment Promotion.
This comes after the economy suffered extensively from the impact of El Nino induced drought, which cut growth from over 5 percent in 2023 to about 2 percent this year.
Falling global commodities prices, except for gold, have also not helped matters in a country where minerals account for more than 90 percent of export earnings.
Minister Ncube outlined the key objectives and allocations within the budget.
A notable aspect of the budget is the allocation of approximately 11 percent of its total resources to the agricultural sector, reflecting a strong commitment to ensuring food security within the nation.
The minister underscored that citizens who depend on the agricultural sector should expect maximum support, including on initiatives that include investment in irrigation to build that resilience.
This is part of a broader strategy to enhance the performance of the sector, and allow it to better cope with unpredictable climatic and economic challenges.
In addition to supporting growth and resilience of agriculture, he said the 2025 National Budget sought to foster the growth of new industries to create a more diversified economic landscape.
As such, he proposed the establishment of a development fund to be jointly managed by the Ministry of Finance, Economic Development, and Investment Promotion, alongside the Ministry of Industry and Commerce.
This fund is projected to catalyse investments in key sectors, including pharmaceuticals and automobile manufacturing, among others deemed appropriate for investment, to propel the economy.
The minister said the fiscal plan proposed to provide incentives for local manufacturing, particularly in the automotive sector, which includes cars and buses.
This initiative is part of broader efforts to stimulate local industry and reduce dependence on imports.
Some resources from the National Budget will be dedicated to advancing the devolution agenda, ensuring equitable development across all regions, and preventing any demographics or areas from being overlooked in the nation’s development plans.
Minister Ncube emphasised that the goal of the 2025 National Budget was to strike a balance across various key sectors of the economy while focusing on building economic resilience as a priority.
“The budget is meant to balance the economy, to build the resilience that the economy needs to survive the shocks.”
If you look at the agricultural sector, we have almost 11 percent of the budget having been earmarked for that sector to ensure that there is food security. So, our citizens who are living off the food sector, should expect maximum support, particularly through investment in irrigation to build that resilience.
“Looking at industry, we would want to grow new industries and balance the economy.
“So, we are proposing that we set up some kind of development fund, which originally was sitting with IDC, but now will be housed between the Ministry of Finance and Industry and Commerce, so that we can invest in the pharmaceutical sector and car manufacturing sector and whatever sectors that the protagonists see fit, that we should invest in order to drive the economy forward.
“I really believe that we’ve tried hard to balance things out. Of course, I’ve selected a few things in my answer, but the idea is to balance out the economy, but above all, build the resilience that the economy requires,” said Minister Ncube.
Minister Ncube said the Government was contemplating the strategic disposal of certain State assets to generate revenue required for funding crucial programmes, including those connected to agriculture, food security, infrastructure development, the health sector, and education.
He pointed out that proceeds from some disposals of the State asset would also be allocated toward offsetting national debt, acknowledging the pressing need to manage interest payments effectively.
“The issue of debt is critical, it is an albatross that needs to be moved from our necks so that the economy can move forward. It is something that occupies me for quite a lot of time.”
However, the Minister expressed concern regarding the declining global demand for hard commodities within the mining sector, a critical source of Zimbabwe’s exports, accounting for over 60 percent of total export earnings.
Minister Ncube highlighted the potential implications of falling global demand, particularly from China, which drives the demand for global commodities, including many local minerals.
He acknowledged the strong performance of gold this year, noting that the price trends for other essential minerals, such as lithium, palladium, and platinum, have been lacklustre in recent months, presenting challenges for the mining sector’s overall contribution to the economy.
On the environmental front, the 2025 budget carries provisions for green initiatives, such as implementing taxes on plastic carrier bags, similar to policies adopted by other countries that have opted to ban such items entirely.
Minister Ncube noted that he had previously resisted outright bans on plastic bags, opting instead for a systematic taxation approach to avoid stifling local industries that rely on the packaging.
He noted that some of the progressive taxes included in the budget, such as those targeting unhealthy foods, are part of a broader strategy aimed at promoting healthier living among the populace.
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