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HomeAfricaZimbabwe needs US$45b to restore economy - official

Zimbabwe needs US$45b to restore economy – official

 Zimbabwe requires US$45 billion in investment to re-build its ruined economy, Finance Minister Tendai Biti said Wednesday.

Launching a three-year economic recovery plan, he said the funds would come from direct foreign investment, public-private sector partnerships and domestic savings.

The plan, from 2010 to 2012, targets economic growth of 6.5 percent over the three-period, and single digit inflation of an average 6.5 percent.

The country’s economy has been in the doldrums for the last 10 years, weighed down by mismanagement, corruption, economic sanctions and political instability.

However, it started picking up this year after a coalition government, incorporating the opposition, was formed in February.

Biti said for the country to attain targets in the plan, it would be imperative for political stability to hold, corruption to be weeded out and Zimbabwe to normalise relations with major world economies.

“It is my strong conviction that once these ingredients are in place, we will be able to turn around this economy and indeed rebuild and reposition Zimbabwe to its rightful place within the community of nations,” he said.

He said the economy would grow by 4.7 percent this year on the back of strong recovery in most sectors, notably agriculture, mining, manufacturing and tourism.

Next year, he said economic growth was forecast at seven percent, but would slow down to 6.3 percent in 2011 and 2012.

But Biti said the country had, at last, won the battle against hyper-inflation, which last year peaked at over one trillion percent.

This will be five percent this year, and increase marginally to 5.1 percent next year and 7.7 percent in 2011.

On the other hand, Biti said domestic savings were expected to rise to around 14.3 percent of gross domestic product next year, and to 23.8 percent both in 2011 and 2012.

On the back of these strong macro-economic fundamentals, he said foreign investment would begin to flow to Zimbabwe again, and possibly constitute the largest chunk of the US$45 billion the country needs.

Mining, the main target of foreign investors, is expected to grow by 40 percent next year, on the back of strong investment in the sector.

The sector has attracted strong interest from foreign investors, with projects lined up totaling US$8 billion. 

 

   

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