Mthuli Ncube predicts El Nino’s dire effect on economy’s growth rate, pegs it at 3.5% in 2024  

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By Reason Razao | Senior Reporter

Zimbabwe’s economic growth is expected to slow down from 5.5% in 2023 to 3.5% in 2024 owing to the effects of El Niño among an array of other assumptions, Minister of Finance and Investment Promotion Mthuli Ncube has said.

Presenting at this year’s pre-budget seminar, held under the theme ‘Consolidating Economic Transformation’, in Mount Hampden, Ncube said the downside risks to the growth outlook is affected by a plethora of factors including El Niño induced drought and declining global energy and food prices.

Ncube also cited declining global energy and food prices, geopolitical tensions, outbreaks of pandemics and endemics, weak growth prospects of the global economy and climate change. 

“In 2024, the economy is projected to grow by 3.5%, underpinned by the following assumptions, this year we are expecting normal to below normal rain season, so we are factoring in El Niño,” said Ncube.

“We are expecting a slowdown in global economic growth and geopolitical tensions to continue. That’s two negatives.

“We are expecting a third negative, being the declining international commodities prices,” he added.

The minister of finance said some of the factors that will derail economic growth include the continuation of the multicurrency regime and tight fiscal and monetary policies.

In terms of revenue collections, the treasury boss said projections for revenue collections for 2024 are pegged at  ZWL$44.1 trillion.

“Going forward we expect revenues of ZWL$44.1 trillion in 2024 but we strive to broaden fiscal space, tax administration and enhance new technology in doing so. 

“We are actually keen to do more in terms of responding to the tax space, formal sector…linking the presumptive tax of the formal sector to the renewal of our current prices for example,” the minister said.

According to the minister of finance, expenditures are projected at ZWL$47.8 trillion, broken down as ZWL$24.7 trillion for compensation of employees and capital expenditure at ZWL$10.3 trillion.

Total bids so far amount to over ZWL$110 trillion, against a budget framework of ZWL$47 trillion.