Harare — Zimbabwe's economy is projected to grow by 9 percent in 2019 and a further 9.7 percent in 2020 supported by renewed business confidence in the economy, finance minister Mthuli Ncube said Friday.
While launching the economic recovery and stabilization document, Ncube said the upward trajectory in economic growth will also be anchored on the new Transitional Stabilization Program (TSP) to run from October 2018 to December 2020 which aims at stabilizing the macro-economy through fostering fiscal discipline, infrastructure development and export growth.
Zimbabwe's economy is projected to grow by 6.3 percent this year, up from the initially projected 4.5 percent.
The TSP is the first of a series of time-bound development strategies that will be implemented by the government in its quest to transform Zimbabwe into a middle income economy by 2030.
After 2020, the government will launch two five-year development strategies, with the first one running during 2021-2025 and the second covering the period 2026-2030.
"Over the duration of the program (TSP), the economy is projected to grow by 9 percent in 2019, and 9.7 percent in 2020. This growth will be underpinned by renewed business confidence and investment opportunities as the new dispensation opens up Zimbabwe for business across all sectors of the economy," the minister said.
He said agriculture and mining will continue to be strong drivers of growth in the economy, with the growth expected to taper off to around seven percent annually from 2024 to 2030.
The minister said the TSP will mainly focus on stabilizing the macro economy, building a private sector-led economy, addressing infrastructure gaps, and launching quick-wins to stimulate growth.
It will also focus on measures to contain budget expenditure, civil service reforms, ease of doing business, containment of government wage bill currently consuming over 90 percent of government revenue and right sizing of government workforce.
"The realization of the TSP short-term quick wins for the economy will be underpinned by adoption of, and strict adherence to, macro-economic stabilization policies that require painful trade-off and sacrifice," Ncube said.
The minister, meanwhile, defended the two cents tax on every dollar transacted electronically that he announced on Monday this week, saying it was necessary to widen the tax base and raise more funding for social services.
Zimbabweans were previously taxed 5 cents per every transaction regardless of the amount involved.
The tax has attracted widespread condemnation from a cross section of Zimbabweans and many businesses have since hiked prices of their commodities and services following the introduction of the tax.
"The tax is a shock to the people but we do need austerity now and we need to fix this economy together. It is better we take more pain at the beginning and then afterwards we stabilize our macro economy and we go forward," he said.
Zimbabwe's economy is currently reeling from foreign currency and cash shortages which have in turn spawned shortages of fuel and medicines, among other essentials.