Budget to consolidate NDS1 gains, deepen economic transformation, Mthuli

The 2025 national budget will focus on building resilience in order to deepen economic structural transformation as well as consolidate gains achieved under National Development Strategy 1 (NDS1), a cabinet minister has said.

With the economy now expected to record a two percent growth from the initial forecast of 3.5 percent, the Treasury is expecting a rebound next year at 6 percent on account of agricultural sector recovery.

Finance, Economic Development, and Investment Promotion Minister, Professor Mthuli Ncube, during a lecture at the Zimbabwe National Defence College on Monday, revealed the budget will seek to strengthen the economy so that it becomes resistant to most domestic and foreign shocks.

“We are focusing on resilience because we have been impacted by climate changes this year, so investing in sectors like irrigation, more in drought-resilient seeds and cropping, conservation agriculture in the form of Pfumvudza, and also focusing on insurance products for farmers—all those are key aspects of building resilience,” he said.

He added that while the budget cuts across different sectors, agriculture investments remain key; hence, more focus will favour water infrastructure and also building resilience in terms of environmental protection for the country to benefit more from its natural resources.

“But also building resilience in terms of making sure our currency is fully backed by the sales and exports because all of that is building the kind of resilience that is needed,” said Mthuli.

The finance minister said while agriculture is the only sector recording negative growth, the rest are in positive growth.

“The ICT sector, tourism, and accommodation are growing above 10 percent. But also, we expect agriculture to lead the recovery next year when we are expecting good rains. We expect the sector to grow at about 13 percent positive, and none of the sectors will record a negative rate of growth. “So next year, we expect the economy to grow at 6 percent more than full recovery,” he said.

Mthuli said so far during the period of NDS1 (2021-2025), the economy has been growing at an average of 6.5 percent; hence, it will be able to meet the growth rate of 5.5 percent quite easily.

“That is our target for us to reach middle-income status by the year 2030. Of course, we have five more years to go, and under NDS2 (2026-2030), but we are again determined that we will be able to meet that average rate of growth,” he said.

Mthuli said Zimbabwe has done well in terms of managing its external balances, supported by growth in exports in sectors like the mining sector and growth in remittances by diaspora.

He said the two sectors have driven the country’s current account position compared to other imports and other outflows.

“In the last six years, we have had a very positive current account surplus.

“Our estimate for this was that the current account was likely to shrink to about US$45 million, but our latest figures are showing a much better position because we have seen an increase in gold earnings, and we now could be as much as US$100 million in terms of the current account,” Mthuli said.

The finance minister also highlighted that the economy has also remained resilient on the back of geopolitical tensions, as weak commodity prices have also compounded the situation.

“Commodities prices except gold have been weakening, reducing the country’s mineral revenue, while the tensions have also exposed us to higher interest rates,” he said.

Information contained in the 2025 Budget Strategy Paper shows that the government is expecting to collect revenues estimated at over ZiG103 billion, while spending is projected at more than ZiG101 billion.-ebsinessweekl