Biti revises growth targets again
HARARE – Finance minister Tendai Biti has revised further downwards the 2012 economic growth forecast to four percent from 5,6 percent due to a significant decline in agriculture production.
Biti told lawmakers attending budget preparatory meeting in Victoria Falls that new figures have revealed agriculture, which was initially projected to grow by 11,6 percent this year had contracted to -5,8 percent.
“As we approach the end of the year, we have to move from projections to reality,” he said.
“About a third of the 2012 maize production was lost to drought and new information shows that the growth rate of 5,6 percent earlier announced in mid-May review will likely be revised downwards to around four percent.”
In his mid-term budgetary statement Biti revised the growth forecast to 5,6 percent from the initial projection of 9,4 percent.
The new revision is in line with IMF projections, which said the country’s economy would grow only four percent as a result of inadequate revenue inflows.
The IMF said despite the growth in productive sectors such as mining and agriculture, Zimbabwe’s economy continues to experience funding challenges that have resulted in government failing to sustain critical economic requirements.
The Finance chief said initially agriculture was projected to grow by 11,6 percent this year but this has been revised to -5,8 percent, whilst mining will grow from initial projection of 15,9 percent to 16,7 percent.
“The decline in agriculture calls for a fundamental revisiting of the issue of research and development,” he said.
“We cannot continue to do things the way we have been doing when clearly we are not producing.”
Biti said next year there is going to be a commodity exchange, where farmers can sell their maize to the highest bidder.
“Tobacco is the most successful crop in the country because government has nothing to do with the crop except for regulation. We must do the same for maize,” he said.
Agriculture, arguably Zimbabwe’s economic mainstay, is already facing major threats after it emerged that there is not enough fertiliser for the 2012/2013 farming.
Seiso Moyo, deputy Agriculture minister said his ministry has come up with a comprehensive agriculture sector policy framework that aims to revive farming productivity.
“The success of agriculture is anchored on the adequacy of sustainable agriculture policies.
“As such we have crafted a 2012-2032 agriculture policy that has financing arrangements for the sector,” he said.
Moyo said the sector has the potential to grow by over 22 percent only if enough capital is pumped into it.
“Our focus is that we must work with the ministry of Finance to come up with a legal framework that forces banks to lend five percent of their lending money to agriculture.
“This would go a long way in facilitating increased availability of farming inputs to farmers,” he said. – John Kachembere