HARARE Zimbabwe (Xinhua) --
Minister Patrick Chinamasa HAS said Zimbabwe’s economy is
projected to grow by 4.5 percent in 2018, up from 3.7 percent in
2017 driven by strong performance in agriculture, mining and
Presenting the first post-Mugabe national budget in
Parliament, Chinamasa announced a 5.1 billion U.S. dollars
national budget for 2018, up from 4 billion dollars in 2017.
He said total expenditure for 2018 was projected at 5.8
billion dollars, giving a budget deficit of 672.3 million
dollars which constitutes 3.5 percent of Gross Domestic Product.
This is markedly down from the 2017 budget deficit of 1.7
billion dollars, constituting 9.4 percent of GDP.
Chinamasa said the budget, which proposes massive job cuts in
the public sector and major economic reforms, will usher in a
new economic order that propels growth and development.
The minister said overally, measures contained in the 2018
budget were aimed at restoring market and investor confidence,
ensuring discipline in management of public finances and
ensuring policy consistency, clarity, credibility and
The measures were also aimed at addressing current cash and
foreign currency shortages in the economy, he said.
Among the major reforms proposed in the budget to attract
foreign direct investment is the amendment of the indigenization
and economic empowerment law promulgated during former President
Robert Mugabe’s government.
The finance minister said the controversial law will be
reviewed such that the 51-49 percent threshold will only apply
to two minerals - platinum and diamond -while the rest of the
minerals will be exempted from the law.
This means that foreign investors in the platinum and diamond
mining sector will be required to cede 51 percent shareholding
"The 51-49 (percent) threshold will not apply to the rest of
the extractive sector nor will it apply to other sectors of the
economy which will be open to any investor regardless of
nationality," Chinamasa said.
There will be sectors reserved for locals and foreigners will
only participate in these sectors through special dispensation
granted by government, the minister said.
The review of the law is set to ignite foreign investor
confidence in the economy and boost foreign investment inflows
that are critically needed to jump start the economy and arrest
massive unemployment in the country.
Chinamasa’s budget made bold statements about government’s
unequivocal desire to cut government expenditure and address the
challenge of unsustainable budget deficit which he said is
affecting macro-economic stability.
He said government intends to cut its wage bill from the
current 86 percent of total revenue to 70 percent in 2018
through retiring civil servants above the age of 65 years,
laying off 3,800 redundant youth officers and maintaining a
freeze on recruitment of non-critical staff, among other
Government will also downsize its 46 diplomatic missions
abroad to contain expenditure as it was currently struggling to
clear arrears amounting to 17.3 million dollars, the minister
The minister said government will close non-strategic
technically insolvent state-owned firms and commercialize
strategic ones as it moves to reform the enterprises that have
been a drain on the fiscus for a long time.
"It is now the time for action under the new economic order
for implementation of the long overdue parastatal and enterprise
reforms," Chinamasa said.
He said the government will strengthen agencies mandated with
fighting corruption and make the fines more prohibitive as part
of measures to fight the scourge.
Zimbabwe, the minister said, will intensify and accelerate
its re-engagement with the United Kingdom, United States and the
European Union to open doors for international cooperation.
In addition, government will double efforts to re-engage with
the World Bank, International Monetary Fund, the European
Investment Bank and all bilateral creditors to unlock funding
for economic development, Chinamasa said.
"The country has for a long time experienced low
productivity. Government will seek to attract both domestic and
international investment through implementing investor friendly
policies," he said.
The minister allocated 132.2 million for the holding of
elections in 2018 which he said must be credible "for
restoration of confidence in our economy".
As part of measures to boost productivity, the minister
proposed a raft of tax incentives for agriculture, industry and
He also proposed an export tax of five percent on gross value
of exported lithium and further deferred tax on unrefined
platinum exports to 2019.
He said inflation was expected to end 2017 at around 3
percent. He promised that government would pay its workers their
2017 bonuses but would stagger them due to current liquidity
challenges in the economy.
Zimbabwe not yet ready for its own currency: finance minister
HARARE Zimbabwe (Xinhua) --
Zimbabwean Finance Minister
Patrick Chinamasa said Friday the country is still far from
having its own currency.
Zimbabwe adopted use of multiple currencies in 2009 after its
currency had been rendered worthless by a decade of
The U.S. dollar has been the main transacting and trading
currency but there has been an acute shortage of the greenback,
resulting in authorities introducing local bond notes in
November last year to ease the bank note shortages.
However, the supply of the bond notes has remained limited
and the country continues to face cash and liquidity challenges.
Speaking at a post-budget meeting, Chinamasa said Zimbabwe
will only be able to re-introduce its own currency after
addressing key macro-economic fundamentals that include having
sufficient reserves for imports.
"We are not yet ready for our won currency until we have done
certain things which include addressing the budget deficit,
addressing the issue about import cover.
"If I got six months
cover, that is good enough but at the moment its 0.7 months
"This is not good enough.
"We need to address the issue of trade balance especially
where our imports are not adding value to the economy," the
The minister said one feasible way of building up reserves to
support national currency is to resuscitate a few idle gold
mines through joint ventures so that they can produce gold
solely to build up reserves.
"What I have in mind is that there are a lot of gold mines
sitting idle for lack of capitalization.
"We can take one, two or
three of those mines to produce gold not for disposal but to
build the serves so that we can build an anchor to any future
currency that we may want to introduce," Chinamasa said.
China offers funding for Zimbabwe infrastructure development
HARARE Zimbabwe (Xinhua) --
China on Wednesday agreed to
provide Zimbabwe with a funding of about 213 million U.S.
dollars for infrastructure development projects.
The funding includes those for the expansion and upgrading of
the country’s flagship airport, the Harare Robert Gabriel Mugabe
International Airport, construction of a new Zimbabwe parliament
building and the second phase of the high performance computing
center, the third fastest computing center in Africa.
The financing agreements are the first to be signed by
Zimbabwean President Emmersen Mnangagwa’s new administration and
are a fulfillment of some of the projects agreed between
Zimbabwe and China during Chinese President Xi Jinping’s visit
Speaking at the signing ceremony, Chinese ambassador to
Zimbabwe Huang Ping said China will continue to support the
Zimbabwean government in its economic revival and social
"The agreements we have signed today are just a testimony of
our efforts and our friendship that withstands the test of time.
"As Zimbabwe’s all-weather friend, the Chinese government has
been committed to assisting our good friend and brother in its
development path through thick and thin ever since Zimbabwe’s
liberation struggle," Huang said.
He said China was pleased to be lending financial support to
Zimbabwe at "this new juncture of Zimbabwe’s social and economic
Zimbabwean finance minister Patrick Chinamasa said China’s
financial support was testimony to the lasting friendship that
exists between Zimbabwe and China.
"I want to take this opportunity to extend our gratitude and
appreciation to China for the support that they have availed,"
He said the infrastructure development projects were
significant in that they will help create jobs for local people
and boost business for local suppliers of construction
He said upgrading of the Robert Gabriel Mugabe International
Airport will entail expansion of the terminal building,
rehabilitation of the runway, installation of the communication
system, refurbishment of the fire station and new satellite
station, among other works.
Financing of the project will be administered by China
The expansion works will more than double the airport’s
handling capacity from the current 2.5 million passengers per
year to 6 million.
Zimbabwe renames army headquarters after liberation war icon
HARARE Zimbabwe (Xinhua) --
The Zimbabwean government on
Wednesday officially renamed the country’s army and airforce
headquarters in the capital Harare after one of the country’s
liberation war icons as part of a process to rid the country of
a colonial mentality.
President Emmerson Mnangagwa officiated at the event where
King George the Sixth army barracks was renamed after Josiah
Magama Tongogara, a military strategist who directed the
prosecution of Zimbabwe’s liberation war that culminated in the
independence from Britain in 1980.
Albert Fredericks Arthur George VI was king of Britain
between 1936 and 1952. The late General Josiah Magama Tongogara
was born in 1940 and died on the eve of Zimbabwe’s independence
Mnangagwa said he will preside over the renaming of three
other military cantonments in the country as the nation takes
steps to rewrite and preserve its liberation war history.
The renaming of all the country’s barracks after the
country’s liberation war heroes comes after government recently
gazetted the name changes.
Mnangagwa said the process of renaming the military barracks
from colonial names was critical to help Zimbabwe "exorcise" the
ghost of colonialism and shed colonial mentality.
The country’s military barracks had largely maintained
colonial names 37 years after independence.
"This process (of renaming) has set in motion our
longstanding desire to re-write our own history and in the
process promoting our values as Zimbabweans," Mnangagwa said.
"By so doing, we rid ourselves of the colonial mentality
which regards all that is associated with Europe and the West
with high esteem while placing a low opinion on our own value
systems as Africans."