The Sunday Mail
Michael Tome and Panashe Chikonyora
Government has intensified efforts to reduce the effects of climate change on the country’s agro-based businesses following persistent droughts and cyclones in the recent past that left companies posting heavy losses.
Finance and Economic Development Minister Professor Mthuli Ncube revealed this at the Zimbabwe National Chamber of Commerce (ZNCC) annual business review conference held in Harare last Thursday.
He said Government will avail considerable funding towards climate proofing, which was initially unveiled in the 2020 National Budget, to mitigate against the effects of climate change on businesses and the general public.
Natural calamities that have befallen the country are affecting the agriculture sector, which is the mainstay of the economy, as well as other sectors through restricted power generation, stemming from poor rainfall in the Zambezi River catchment area. This has left the country at the mercy of prolonged load-shedding for the greater part of 2019.
The Treasury boss underscored the need to effectively utilise dams dotted around the country for climate proofing, which he said was the reason behind the allocation of substantial funding towards the sector. He said the Government was determined to stimulate the economy after the austerity measures took a toll on growth in 2019, signalling that more effort will be focused on productivity.
“We need to invest in climate proofing in the country, so Budget allocated about $423 million to invest in agriculture infrastructure. We have about 10 000 water bodies in the country, so we have no reason to fall victim to drought like we did when we have all these water bodies at our disposal.
“So, there is need for introspection on productivity and stimulating growth. Having said this, we have an assumption that the 2019-20 summer cropping season is going to give us better agriculture output,” said Minister Ncube.
Zimbabwe’s economic growth is forecast to end the year at -6,5 percent from an initially forecast growth of 2 percent resulting from challenges in the macroeconomic environment stemming mainly from last season’s drought and the effects of Cyclone Idai.
“We had a cyclone, drought and fiscal consolidation measures this year. It impacted agriculture directly and indirectly affected industry through power outages and backward linkages with agriculture. Therefore, our prognosis for economic growth for this year was stuck at -6,5 percent of GDP when we initially started with a positive outlook of 2 percent,” he said.
Meanwhile, Zimbabwe’s mining sector performed below par and the sector’s stakeholders have signposted a 30 percent decline in output this year, stemming from a challenging environment and power outages.
However, Minister Ncube hinted on stimulating growth in some of the key sectors, particularly mining, manufacturing and agriculture in the forthcoming year.
He also said the mining and manufacturing would emerge stronger in the new year.
He alluded that his ministry was mulling the extension of a financing model similar to Command Agriculture to the mining sector, where miners will have access to funding from financial institutions guaranteed by the Government in order to realise the intended growth.
“We expect a better economy next year, so we have to do something to invest in that prognosis.
“We expect the mining sector output to increase by 4,7 percent, industry by 1,9 percent, a 2,3 percent growth in construction and agriculture by 5 percent.
“In the National Budget, we have decided to change the financing model of our Command Agriculture, which is key in agriculture output growth, making it more sustainable and crowding in the private sector, so we have partnered with banks to extend funding to our farmers and so far so good,” he said.
As it stands, the Government is targeting to reduce its budget deficit to about 1,5 percent next year at the same time anticipating a GDP growth of 3 percent.