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Zimbabwe targets 3% growth in 2020
[HARARE] Zimbabwe's Finance Minister Mthuli Ncube on Thursday presented the 2020 budget, projecting three per cent growth as he marginally reduced value-added tax to cushion the millions of poor.
Unemployment today is over 90 per cent while the size of the economy has more than halved since 2000, when former president Robert Mugabe's seizure of white-owned farms crippled agriculture.
Inflation runs into triple digits, electricity is available for just six hours a day and in many urban areas, the taps are dry.
After a projected 6.5 per cent contraction in 2019 of the tattered economy, Mr Ncube said he expected a rebound to three per cent growth next year on the basis of an expected better harvest.
The budget reduced VAT on non-luxury goods from 15 per cent to 14.5 per cent in a move aimed at those who could no longer afford basic commodities "due to low disposable income".
The economy of the southern African country is in the grips of a major downturn - the worst in a decade -- that has provoked hyperinflation and biting shortages of basics such as fuel and medicine.
Incomes for the few who are lucky to have jobs have been severely eroded by inflation which is officially more than 300 per cent and many families live on one meal a day.
But Mr Ncube was optimistic for an economic revival.
"The country's economic challenges are surmountable provided we put our heads together as a nation and continue taking bold and decisive steps to open up and grow the economy," he said.
"This includes seriously pursuing policies that enhance production".
He said the government would set aside 380 million Zimbabwe dollars (S$32.7 million) to partially compensate thousands of white farmers who lost their properties.
"To date, 768 former farm owners have consented to the interim payment scheme with 500 farmers having been paid already".
The UN projects that from January, about 7.5 million people - or half of the population - will require food aid due a severe drought that has swept the southern African region.