eBusiness Weekly
Tawanda Musarurwa
HARARE – Finance and Economic Development Minister Professor Mthuli Ncube has announced the 2020 National Budget, which has a special focus on driving economic growth through the enhancing the country’s agriculture and mining sectors.
Zimbabwe is still largely an agricultural-based economy, while resources exploitation remains the key contributor to export earnings.
Both sectors are projected to contract this year, with agriculture weakening by 16,3 percent on the back of a drought season and the effects of Cyclone Idai, while the mining sector has been projected to contract by 12,3 percent.
But Minister Ncube has announced a number of strategies for both sectors that could result in a turn of fortunes for the sectors’ performances in 2020 and going forward.
In respect of agriculture, the Finance Minister has proposed an allocation of $1,9 billion for the Ministry of Lands, Agriculture, Water, Climate and Rural Resettlement’s “prioritised programmes.”
Some of the key measures for the agricultural sector include an improved financing strategy and model.
“The 2020 Budget makes a turning shift from ad-hoc planning to more forward planning, particularly in terms of availability of inputs on the market. The Budget will, therefore, starting in January 2020, establish an appropriate financing plan which ensures early build up and ring-fencing of both local currency resources and foreign exchange in support of domestic inputs producers and importation of inputs.
“This resolves the challenge of agriculture demands competing with other programmes for both domestic and forex resources during the last quarter of the year, which apparently coincides with the start of summer cropping season,” said Minister Ncube.
In view of previous drought seasons, and bleak prospects in upcoming seasons due to the effects of climate change, Government has proposed creating a fiscal buffer to the tune of $165 million
to cater for drought shocks, as well as strengthening the early warning systems.
The Minister said other drought proofing measures such as investment in irrigation infrastructure,
dam construction and desalination as well as research and extension services, adoption of drought resistant varieties (traditional grains) will be put in place in the current season.
The 2020 Budget will also provide $422,8 million towards the 200 hectare per district irrigation programme.
Minister Ncube also said that is making significant strides in concluding the evaluation exercise to facilitate the compensation of former commercial farmers.
“To date, approximately 769 former farm owners consented to the interim payment scheme, with over 500 farmers having been paid,” he said.
“In 2019, a total of $68 million was availed towards former farm owners and the 2020 Budget is also setting aside $380 million for interim compensation in line with Constitution and BIPPAs, targeting vulnerable and elderly.
“In addition, consultations with the International Financial Institutions and other stakeholders on sustainable options for mobilising the requisite compensation resources are being expeditiously explored.”
With regards to Zimbabwe’s mining sector, the 2020 National Budget has given impetus to the US$12 billion mining sector roadmap that was launched recently.
Minister Ncube said measures will be put in place to improve the fiscal regime of the sector, re-capacitation of the Minerals Marketing Corporation of Zimbabwe (MMCZ) and curbing of mineral leakages.
“Minerals Marketing Corporation of Zimbabwe will be supported through a credit guarantee scheme to provide funding and support to non-gold sector. Accordingly, I am allocating $293,2 million to the Ministry of Mines and Mining Development for its capacitation in terms of planning, promotion of exploration, data capturing and automation, among others,” he said.
“Mineral exports remain the major sources of foreign currency, especially gold. However, leakages have been on the rise, depriving the country of foreign currency earnings. Government is, therefore, reviewing and tightening the Gold Trade Act, and capacitating the Gold Mobilisation Unit.”
