Zimbabwe doubles spending plans for 2023 to revive economy

Zimbabwe more than doubled its spending plans for 2023 as it seeks to revive an economy that exited a recession last year.

The plan presented by Zimbabwe’s Finance Minister Mthuli Ncube projects expenditure will increase by 121% to 4.2 trillion Zimbabwe dollars ($6.5 billion) budget.

The bulk of the funds will be spent on social services and infrastructure projects with a key focus on the mining, energy, and agricultural sectors to jolt economic growth.

Ncube made these comments in a budget presentation to lawmakers at the new Chinese-built Parliament in Mount Hampden, 23 kilometres north of the capital.

Gross domestic product growth is estimated to slow to 3.8% next year from the 4% forecast for 2022, he said.

Economic growth globally is being crimped by tightening financial conditions as central bankers, including Zimbabwe’s, try to temper high inflation.

The higher inflation rates add to the economic damage from the war in Ukraine and China’s slowdown.

The southern African nation’s benchmark interest rate is 200%, while annual inflation is 269%.

The IMF last month cut its forecast for global growth next year to 2.7%, from 2.9% and sees Zimbabwe’s economy expanding at 2.8%.

Other highlights from Ncube’s budget presentation include that he expects Z$21.8 trillion in revenue.

About Z$76 billion was allocated toward next year’s general elections in which President Emmerson Mnangagwa is seeking re-election.

Another interesting piece of information is that Zimbabwe’s budget deficit to GDP is forecast at 1.5%.

The government plans a bond issuance on the Victoria Falls Stock Exchange to plug the funding gap.