Zimbabwe Finance Ministry Eyes Average Annual GDP Growth of 6.6%

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Zimbabwe, whose economy has halved since 2000, said it will boost output growth to almost 10 percent next year through agriculture, manufacturing and by giving more people access to banking services.

The government is targeting an average annual growth rate of 6.6 percent between now and 2018, according to a document given to Bloomberg by the Finance Ministry. The economy is projected to expand by 9.5 percent in 2017 and 8.9 percent 2018, according to the document.

The sub-Saharan African nation needs to repay $1.8 billion of debt to the International Monetary Fund, the World Bank and African Development Bank to be able to resume borrowing in a bid to revive an economy that the International Monetary Fund projects will expand 1.4 percent this year. Zimbabwe, which has been led by President Robert Mugabe since 1980, is experiencing a liquidity crisis that’s led to limits on daily cash withdrawals and civil servants being paid late last month.

Growth will be sustained by “pillars” of the economy, such as agriculture and manufacturing and the inclusion of very small businesses, according to the document. The poverty-reduction plan, which the government hopes to implement after cabinet approval, will seek to provide banking access to at least 90 percent of the population by 2020, up from an estimated 69 percent now.

“Ordinary citizens still lack confidence in the formal banking sector because of the 2008 experience,” the Finance Ministry document says, referring to the era of hyperinflation of 500 billion percent, according to the IMF. That left Zimbabweans suspicious of both banks and a local currency. The nation abandoned its own currency in 2008 and uses the dollar, the South African rand, the yuan, the pound and the euro.

To ease the suspicion of banks, the finance ministry plans to form savings and credit cooperative societies to promote savings, it said.

Source: Bloomberg