The Sunday Mail
2020 has undoubtedly been one of the most tumultuous years in living memory for businesses and economies around the globe due to the fallout from the coronavirus.
Many cannot wait to see its back.
Most economies are expected to record negative growth, and Zimbabwe is not an exception.
Robust policies and measures will be required to put global economies back on the rails.
It is feared the impact of the coronavirus pandemic may linger for years to come.
However, the new year will see the country begin implementing a new medium-term policy that seeks to put the economy on a sustainable and transformative growth path that can be felt by all.
The National Development Strategy (NDS1) provides the perfect launchpad for a new five-year economic policy framework through to 2025.
NDS1 is successor to the Transitional Stabilisation Programme (TSP), which runs its full course this week after meeting most of its key targets.
The new policy will build on and consolidate gains achieved under the transitional plan.
One of the biggest challenges of the era prior to TSP were perennial national budget deficits and ballooning Government debts.
This has since been brought under control.
The twin evils of national budget and current account deficits have since been eliminated and budget surpluses are now common.
A widely endorsed debt resolution strategy or framework for both the domestic and external debt is now in place.
Much of the surpluses generated by Treasury have been used to avail resources for emergencies and disasters like Cyclone Idai, drought and Covid-19.
They have been used to support social protection programmes and build key infrastructure like dams, bridges and roads.
Perhaps the most notable milestone realised under the TSP was the reintroduction of the domestic currency in February 2019 following a decade-long hiatus.
The volatility of the exchange rate has since been resolved following the introduction of the Dutch auction system on June 23.
Treasury believes having a local currency means Government now has control of both legs of macro-economic policy in the form of fiscal and monetary policies.
Massive progress has been recorded in establishing enabling infrastructure such as roads, bridges, dams, power, water and sanitation, among others.
Significant progress was also achieved in terms of the ease of doing business reforms, reducing imports, devolution, international re-engagement, fiscal and monetary policy reforms and restoring the rule of law.
The NDS1 targets an average growth rate of at least 5 percent annually over its five-year term.
It is supported by a solid implementation, monitoring and evaluation matrix superintended by a team in the Office of the President and Cabinet (OPC).
“This office that monitors the performance of the Government (and its line ministries/ministers) in terms of performance and targets is there, it is thriving and it works,” said Finance and Economic Development Minister Professor Mthuli Ncube recently.
Permanent secretaries in ministries have already signed performance-based contracts.
NDS1 policy, which will place at its core entrenchment of devolution, is premised on the adoption and swift implementation of bold strategies, policies and programmes aimed at achieving economic transformation.
Some of the specific macro-economic objectives for the five-year period of NDS1 include achieving an average annual real Gross Domestic Product (GDP) growth rate of at least 5 percent, maintain fiscal deficits averaging not more than 3 percent of the GDP or below in line with SADC target.
Further, NDS1 seeks to achieve and maintain lower single-digit (annual) inflation and increase international reserves to at least six months import cover by 2023.
This will be done through the creation of a thriving private sector-led competitive economy, implementation of sound macro-economic policies anchored on fiscal discipline, monetary and financial sector stability, including an open business friendly environment, which promotes both foreign and domestic investment.
The new economic blueprint is thus themed: “Towards a Prosperous and Empowered Upper Middle-Income Society by 2030”.
Zimbabwe has previously implemented several brilliant economic policies to drive growth and reduce poverty, however, the results were suboptimal due to both “exogenous and endogenous factors”, and the new policy thrust is to rekindle the economy’s unrealised potential.