ZNCC Contradicts Ncube, Predicts -9 % Growth In Gloomy 2021

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By Alois Vinga

LEADING business group, Zimbabwe National Chamber of Commerce (ZNCC) has projected that economic growth will range between minus 6 to 9 % by the end of 2021 amid concerns that economic challenges will continue to choke business viability.

Presenting his 2021 budget last year, Finance Minister Mthuli Ncube said the country’s economy was expected to grow by 7.4 % after a projected 4.1 percent contraction this year.

He said such growth will be driven by strong recovery in agriculture, mining, electricity, construction, transport and communication as well as finance and insurance.

But ZNCC’s brief 2021 economic outlook contradicted earlier projections citing deep discord in the country’s economic achievements so far.

“Gross Domestic Product (GDP) forecasts in the last budget can only be a mirage. We will be thankful to the Almighty if we are to post even a +0.5% growth for 2021, with a negative 6%-9% being our forecast before the economy moves out of the hole in the second half of 2022,” ZNCC said.

The business group argued that the services sector which is becoming the major driver of the Zimbabwean economy continued to be slapped by hard lockdowns in an economy with almost 61% concentration of the services sector.

ZNCC said the companies have had enough of lockdown and called for graduation to smart and targeted Covid-19 containment measures which allowed businesses to remain open while adhering to guidelines.

The organ challenged the country’s political establishment to turn around corporate Zimbabwe which has suffered a savage downturn.

“Total profits for the Top 10 listed counters on ZSE might have surpassed analysts’ expectations, this is unfortunately not translating into job creation or real revenue contribution (tax contribution wise).

“Corporate balance sheets are under strain, which could hold back investment and lead to an eventual rise in defaults. The mood in the boardrooms of SMEs is foul. Sentiment has stalled since the beginning of the year,” said ZNCC.

The business member organisation added that the gloomy outlook, “the most pessimistic in 12 years may be explained by the fact that 25% of SMEs believe they won’t come back to normalcy after the pandemic.”