Business executives say the government’s economic growth prospects this year remains a pipe dream in the absence of external funding.
Finance and Economic Development minister, Mthuli Ncube, has projected the economy to grow by 7.4% this year despite the ravages of the Covid-19 pandemic.
But, captains of industry who spoke at the CEO Africa Roundtable said the growth target was ambitious.
“The economy is projected to grow 7% in 2021 but as business leaders we strongly believe this is not achievable considering the effects of the Covid-19 pandemic, historical structural bottlenecks among other factors. This has seen companies’ mortality rate rapidly going up.
“Without external funding, these budget projections are rather a pipedream,” CEO Africa Roundtable board chairman Oswell Binha said.
Zimbabwe Women’s Microfinance Bank CEO Mandas Marikanda said the Covid-19 pandemic has been disastrous and achieving the 2021 projections would be an uphill task.
“But this is the best time for companies and industry to move away from competition and rather collaborate to beat the pandemic shocks. This is not the time of being competitors but rather partners in coming up with synergies,” Marikanda said.
In his 2021national budget, Ncube announced a raft of measures including stimulus packages for agriculture and manufacturing sectors and tax relief for manufacturers.
After facing an economic crisis exacerbated by the Covid-19 pandemic, the World Bank is of the opinion that Zimbabwe’s economy is set to rebound by 2.9% this year, supported by recovery of agriculture and due to base effects.
Expected bumper harvest and continuation of rule-based monetary policy are likely to stabilise food prices and improve food security.
However, disruptions caused by the pandemic are likely to continue weighing down the economy.
Zimbabwe’s economy last year contracted by about 7% as Covid-19 ravaged the economy.
According to the World Bank, operating restrictions led to depressed trade in all sectors of the economy.
Fiscal and monetary policy responses to the pandemic, analysts said, have been limited to contain volatility of prices.
Fiscal policy remained tight despite wage pressures and additional spending needs to respond to the pandemic and growing number of poor.