Peter Moyo
Last week, Finance Minister Professor Mthuli Ncube presented Zimbabwe’s 2025 National Budget under the theme “Building Resilience for Sustained Economic Transformation.” With a projected GDP growth of 6% and a $5.3 billion fiscal envelope, the plan aims to stabilize the economy and foster growth. However, a closer look reveals that while the budget offers hope, it leaves significant gaps that could hinder its impact on ordinary Zimbabweans.
The projected 6% GDP growth for 2025 is supported by strong performances expected in agriculture, mining, and electricity generation. Agriculture, forecasted to grow by 12.8%, is central to the recovery narrative, with favorable weather conditions tied to the La Niña phenomenon playing a key role. “We are confident that normal to above-normal rainfall will drive a recovery in agricultural output,” Prof. Ncube stated.
However, challenges such as limited access to credit, aging irrigation systems, and the increasing threat of climate change cast doubt on whether this growth will be sustainable. Programs like the Farmers’ Basket index-based insurance offer some support, but their reach is limited, leaving many farmers vulnerable to unpredictable weather and economic shocks.
Mining, another cornerstone of the growth forecast, is expected to grow by 5.6%, driven by gold and lithium exports. Higher global commodity prices are anticipated to boost export revenues, but communities living near mining sites often see little benefit. The lack of clear policies to channel mining profits into local development raises questions about who will truly gain from this projected growth.
The introduction of the Zimbabwe Gold (ZiG) currency in 2024 brought much-needed stability to inflation and exchange rates. Monthly inflation is expected to average below 3% in 2025, a significant improvement. Prof. Ncube emphasized that “The ZiG has anchored inflation expectations and stabilized the exchange rate, creating a conducive business environment.” However, the sharp fluctuations in exchange rates witnessed in late 2024 highlight the fragility of these gains. Stabilization efforts, while necessary, may come at a cost, including limited credit availability for businesses and households.
Public debt, currently at $18.7 billion, remains a major obstacle. Debt servicing costs continue to divert funds away from critical areas like health, education, and social protection. While the Arrears Clearance and Restructuring Process aims to reduce these costs, progress has been slow, and citizens are left bearing the burden of underfunded public services.
Infrastructure spending is one of the budget’s strengths, with over $1 billion allocated to projects like roads, dams, and electricity generation. These investments are essential for economic growth and reducing logistical costs. However, infrastructure projects typically take years to deliver tangible benefits, and in the meantime, issues like unemployment and poverty persist. Without clear job creation strategies tied to these projects, the immediate impact on citizens will be limited.
Social spending, particularly on programs for marginalized groups, is an area where the budget appears insufficient. Loans to women and youth doubled in 2024, reflecting progress in financial inclusion. Yet, rural populations, who are most in need of such support, remain underserved. Prof. Ncube’s assertion that “Empowering marginalized groups is central to our economic goals” needs to be backed by more comprehensive measures.
For many Zimbabweans, the macroeconomic improvements highlighted in the budget feel disconnected from daily realities. Prices of basic goods remain high, unemployment persists, and public services are stretched thin. Tight fiscal and monetary policies, while stabilizing the economy, risk stifling growth if not paired with measures to stimulate domestic demand and employment.
Despite its ambitious targets, the budget fails to address some critical areas. Job creation is barely discussed beyond agriculture and infrastructure. Inequality between urban and rural areas remains unaddressed, and climate resilience strategies lack the depth needed to mitigate future shocks.
Prof. Ncube aptly noted that “Building resilience requires collective effort and innovation.” However, resilience also demands addressing systemic issues and ensuring that growth benefits all Zimbabweans—not just those at the top. While the 2025 National Budget lays out a framework for recovery, its success depends on execution and a commitment to inclusivity. Without these, it risks becoming another missed opportunity for Zimbabwe’s citizens.
