HARARE – Zimbabwe’s Minister of Finance, Mthuli Ncube is to launch a new economic blueprint in September, replacing the Transitional Stabilisation Programme (TSP), which was launched in 2018.
The ministry said at the weekend that the National Development Strategy (NDS) will come through in two phases, NDS1, which will cover the period 2021 to 2025, and NDS2 covering 2026 to 2030.
“Government of Zimbabwe, Therefore, wishes to inform citizens, private sector, non-governmental organisations and co-operating partners, among other stakeholders that the preparations for the development of the five – year National Development Strategy have officially started,” the ministry said.
“The strategy is expected to be launched in September 2020, coinciding with the preparations for the 2021 national budget. To date TSP has achieved noted milestones on fiscal consolidation, monetary policy restoration, liberalisation of the foreign exchange market, structural and governance reforms, re-engagement, investment promotion and support of productive sectors,” it said.
Elson Chuzu, an economist in the ministry, said recently that preparations for the paper were advanced.
“We are now working on a successor plan to TSP to take us to 2026,” Chuzu said while giving an update on the implementation of the currency blueprint.
“It is a five-year plan. We are already doing the consultations,” the state economist said.
TSP’s mandate was to give direction to President Emmerson Mnangagwa’s administration that had come into office two months earlier.
Finance minister Mthuli Ncube hoped to use the blueprint to leverage on the country’s core competencies, such as natural resources, to transform Zimbabwe into an upper middle-income economy by 2030.
The plan projects the economy to achieve a US$65 billion nominal gross domestic product by 2030, a gross national income of US$3 500 per capita and sustaining growth rates of seven percent per annum for 12 years until 2030.
TSP projects that during its span, the economy would create over 2,2 million jobs, thereby trimming joblessness in a country with over 90 percent unemployment rates, and widening poverty.
But the blueprint has had serious drawbacks.
Its liberation policies and tough austerity measures have been blamed for a sharp downturn last year.
In June last year, the country stopped publishing year on year inflation figures after rebasing the economy and re-introducing the domestic currency.
But in December, independent estimates showed the rate reached 521 percent, the highest rate in Africa.
Fuel and foreign currency have intensified in the past year, while a power crisis had also affected production.
Chuzu blamed the slowdown on lack of financial support from the international community.
He said had Zimbabwe accessed lines of credit from the global financial system like what happened to many countries under similar circumstances, the country’s economy would be on a growth trajectory.
“It is unique for us to do such reforms without financial support,” he said.
“Greece received US$360 billion in financial support. But we have done it without financial support. We have managed to bring down employment costs. But we have also had unintended consequences, such as depressed demand, which is now affecting the economy. In addition, some imports that we have forgone were inputs for the manufacturing industry, leading to low output. Inflation overshot and it went beyond what we expected. The inflation level is too high and it’s not good for business. We have made a lot of progress in the implementation of TSP but we have a lot to do,” said Chuzu, who spoke on behalf of the Finance Minister.
“We failed in some areas but we managed to do well in some areas under a difficult environment. The number of people needing the Basic Education Assistance Module increased so we need more resources. We didn’t expect drought, for instance. We are done with austerity but we won’t do away with fiscal prudence. We are going to consolidate that gains that we achieved under TSP,” said Chuzu.