Zimbabwe targets 7% growth a yr in next five years

HARARE – Zimbabwe targets average economic growth of 7.1 percent annually under an ambitious new five-year programme that will see it revamp its infrastructure and create more jobs, a government official said on Tuesday.

Tapiwa Mashakada, Minister of Economic Planning and Investment Promotion, said the economic programme was adopted on Tuesday by Zimbabwe’s cabinet and targeted inflation of between 4-6 percent year-on-year over the five-year period.

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Inflation stood at 2.9 percent in April.

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“We need about $9 billion to bankroll this programme and the money will come first from our domestic resources, pension funds and other assets,” Mashakada told journalists.

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Zimbabwe’s economy, which contracted for a decade, grew for the first time in 2009 following the formation of a power-sharing government between long-time President Robert Mugabe and rival Prime Minister Morgan Tsvangirai.

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Mashakada said the government would set up a sovereign wealth fund this year, funded from mining royalties and taxes to help fund the building of roads and electricity generation. 

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The government would also focus on helping the creation of small businesses to increase employment by an average 6 percent a year during the period. Zimbabwe has an unemployment rate of 80 percent, according to the International Monetary Fund (IMF).

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Mashakada, from Tsvangira’s Movement for Democratic Change party, said a planning commission to be overseen by the Prime Minister’s office would be formed to implement the programme.

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That could give confidence to foreign investors who do not want to deal with Mugabe although the veteran leader is pushing for elections this year which his rivals warn could lead to bloodshed.

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Analysts were cautious, saying Mugabe’s drive to force foreign-owned mines to sell majority shares to local Zimbabweans would keep foreign investors away.

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With a GDP of $6 billion and foreign debt of $7 billion, economists said it was difficult to see where Zimbabwe would get the money.

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“It sounds rather ambitious. I don’t think there will be a buy-in from foreign investors, which is a critical ingredient for the success of the programme,” John Robertson, a Harare-based economic consultant, said.

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But Mashakada said his ministry had consulted widely on the programme, including soliciting the views of the IMF and World Bank and a Chinese delegation. – Reuters