HomeNewsRecovery pace seen near double digit next year

Recovery pace seen near double digit next year

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Vice-President Joice Mujuru on Wednesday said Zimbabwe’s economic recovery could quicken to 9% next year, powered by growth in agriculture, mining, telecommunications and a rebounding manufacturing sector.

The projection for the first time narrowed economic planners’ margin of variance with their earlier predictions of double-digit growth next year, suppressing the pessimism stoked by worsening political instability and an unrelenting liquidity crisis.

VP Mujuru, who was speaking at the launch of the Confederation of Zimbabwe Industries 2010 manufacturing survey, said the country’s economy was moving from recovery to growth, with the positive projection being predicted in all major sectors of the economy.

The recovery, she said, would result in positive economic growth which she hinted could be reviewed upwards as was the case this year due to the positive expectations for all major sectors of the economy.

“It is encouraging to note that after successive years of a downward spiral, our economy is fore-cast to grow by 8,1% in 2010 to realise a (nominal) gross domestic product of $6,08 billion,” she said.

“In addition, 2011 looks brighter with a growth projection of 9%. This will largely be driven by growth in agriculture, mining, telecommunication and a rebounding manufacturing sector,” Mujuru said.

Finance minister Tendai Biti reviewed the country’s economic growth three times this year to 8,1%, nearly double the 4,5% he had projected.

Biti initially said in his 2010 Budget statement to Parliament last December that the economy would grow by 7,7% this year, but trimmed the target to 4,5% last July, citing political uncertainty which he said had kept away foreign donor support.

Mujuru said the manufacturing sector was forecast to grow by 3% largely supported by high performance in the beverage and tobacco sub-sectors.

The manufacturing survey shows that there was improvement in the manufacturing sector, with an average capacity utilisation for the first half of 2010 going up to 43,7% from 32,3% recorded during the same period last year.

Mujuru said further growth in this sector was inhibited by critical liquidity challenges which led to capacity underutilisation.

“The growth was retarded due to inadequate electricity and working capital. Thus there is need for massive investment in electricity generation,” said Mujuru.

Mujuru said mining was forecast to grow by 47% in 2010, largely driven by growth in gold production from 4,9 tonnes in 2009 to eight tonnes in 2010, as well as growth in platinum and chrome production.

Agriculture is seen growing by 34% in 2010 supported by growth in tobacco production, which increased to 122,8 million kg this year from 58,6 million last year.

“The tourism sector is forecast to record a marginal growth in 2010 with occupancy going up from 35% in 2009 to 37% in 2010,” Mujuru said.

Total receipts for 2010 are estimated at $770 million, up from $523 million in 2009.

GDP last year grew by 5,1% compared to an earlier projection of 4,7%, but could have paced up faster had the inclusive government successfully attracted lines of credit and loans critical for rebuilding an economy that was once one of Africa’s most vibrant.

“As government we will continue to consult and refine policy measures that seek to create an appropriate business development environment,” Mujuru said.

“As business it is your duty to articulate the required parameters and variables that are required to support business and economic growth,” she said.

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