HARARE, November 26 (The Source) – Zimbabwe’s finance minister Patrick Chinamasa on Thursday said the economy will grow by 2,7 percent in 2016, from 1,5 percent this year and plans to clear arrears to multilateral institutions in the first quarter next year to unlock funding for its stuttering economy.
The southern African nation owes the IMF, World Bank and African Development Bank $1,8 billion and last month had its plan to repay foreign creditors about $7 billion accepted which could lead to financiers resuming lending to the country next year.
Zimbabwe last received funding from the IMF in 1999 but its voting rights were restored in February 2010 after a seven-year suspension. Presenting the country’s 2016 budget in Parliament, Chinamasa said should Zimbabwe successfully complete a monitoring programme that ends in December, Harare could start talks about funding, and that talks with the IMF, World Bank and the IMF were ongoing about capacitating the economy to repay its obligations.
Chinamasa proposed a flat budget of $4 billion with revenue generation expected at $3,85 billion for a budget deficit of $150 million, about 1,1 percent of the GDP.
Recurrent budget this year, at $3,685 billion is 92,1% of total but will spike to 93 percent next year, mostly to salaries for the State’s over 500,000 workers, who are expected to gobble $3,919 billion next year, Chinamasa said.
All sectors are seen growing by between 1,3 percent and 4,5 percent.
The economy will remain in deflation, with inflation expected at -1,2 percent in December next year.
Education received the biggest share of the budget at $810 million followed by Home Affairs ministry at $396 million, Defence ministry with $358 million and Health at $331million.