‘Sluggish economy corners Chinamasa’

Finance minister Patrick Chinamasa is expected to review downwards the country’s growth projections due to sluggish performance of the economy, experts have said

Source: ‘Sluggish economy corners Chinamasa’ – NewsDay Zimbabwe September 7, 2016

BY VICTORIA MTOMBA

The expected revision of the 2,7% growth targeted earlier comes as Chinamasa will today present his mid-term fiscal policy review statement.

In an interview yesterday, Zimbabwe National Chamber of Commerce chief executive officer, Takunda Mugaga said there would not be any growth this year.

“A review coming this late should tell you that there is not much to offer. We expect targets to be revised downwards and if there would be any growth, it would be less than 1%,” he said.

Mugaga said Treasury would not have much to say apart from the challenges, which have remained the same, that include recurrent expenditure.

“Statutory Instrument 64 is a threat to revenues, particularly on the import tax, which has been coming down,” he said.

Mugaga said the only option would be for government to embark on a civil service reform.

Prosper Chitambara, an economist with the Labour Economic Development Research Institute of Zimbabwe, said there was not much to expect from the presentation, considering the state of the economy, especially the inability of government to mobilise resources on key projects.

“The economy will not grow by over 1% .The economy will be stagnant,” he said.

Chitambara said there was need for parastatals reform, which has been moving slowly, and to accelerate the ease of doing business reforms in order to lure foreign direct investment.

Mining, which was a major driver of the economy between 2009 and 2013, has been hit by low prices due to the decline in metal prices on the international market.

The agriculture sector, which is supposed to be the backbone of the economy, has been negatively affected by uncertainty caused by failure to bring closure to the land reform exercise.

The El Nino-induced drought has also worsened the situation.

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