ECONOMIC Planning and Investment Promotion Secretary Dr Desire Sibanda yesterday said policy inconsistencies have "adversely" affected implementation of the Medium Term Plan, the country's four-year economic blueprint.
He also noted the rapidly shrinking capital budget constrained fiscal space and has seen most targets set in the policy being missed during the first year of implementation.
"The implementation of the MTP was adversely affected by policy inconsistency and uncertainties within Government," said Dr Sibanda.
"Policy contradictions made it difficult for Government to attract investment and credit lines which were critical to fund the flagship projects and programmes. This also increased country risk and the cost of doing business in Zimbabwe."
Dr Sibanda said the investment regulations will be reviewed this year to attract investments into our MTP flagship projects, create export processing zones, establish industrial park.
The MTP was launched in July 2011 as the country's premier economic document guiding all other economic documents including the National Budget and sectoral plans.
At the heart of the policy are investment regulations, co-ordination and promotion, natural resource utilisation, poverty reduction and gender mainstreaming, development energy infrastructure and rural development.
The MTP targets an average annual economic growth rate of 7,1 percent during the five-year implementation period and an average annual employment creation of 6 percent.
It envisages a current account deficit of 5 percent of Gross Domestic Product by 2015, foreign exchange reserves of at least three months import cover and double-digit savings and investment ratios of 20 percent of GDP.
The economic blueprint document also targets budget deficit of less than 5 percent, reducing sovereign debt to 60 percent of GDP by 2015, poverty reduction to meet Millennium Development Goals and good interest rate regime.
The MTP was reviewed in November last year and it was noted that a number of the targets were missed. Dr Sibanda said the MTP requires US$2 billion per year over five years.
He said some of the economic blueprint targets for this year would include widening the tax base, more efficient collection of taxes, increasing revenues from extractive industries, Diaspora remittances and formalising the informal sectors.
The MTP will focus on agricultural productivity and recapitalisation of companies.
He said Government, through the Ministry of Finance and Economic Planning and Investment Promotion, would continue to source external funding to improve liquidity in the country.