Zimbabwe 'needs $9-billion to overhaul economy'

Zimbabwe requires $9-billion to fund a structural overhaul that policymakers hope will see the economy grow 7% annually over the next five years, a minister said Tuesday.

“Today Cabinet set and deliberated on the Medium-Term Plan, which will cover a span of five years, from 2011 to 2015,” Economic Planning Minister Tapiwa Mashakada told journalists in the capital, Harare.

“Cabinet has launched the plan and the main vision ... is enhancing a democratic developmental state, anchored by a growing and transforming socially just economy.”

Mashakada said the $9-billion needed to fund the plan would be raised through new investments, equity injections into existing businesses and domestic savings in areas such as pension funds.

Zimbabwe’s economy has shown signs of recovery since President Robert Mugabe and Prime Minister Morgan Tsvangirai formed a power-sharing government in 2009, ending a decade of instability and reversing record-setting hyperinflation.

But Mashakada said economic rebuilding is complicated by the fact that just 10% of the work force participates in the formal economy.

He said the blueprint prioritises employment creation, infrastructure development, economic stability and good governance.

The plan seeks to increase the number of jobs by 6% annually and build foreign exchange reserves sufficient to cover at least three months of imports by 2015.

Zimbabwe’s economy is set to grow 9% this year on the back of strong tobacco production and increased mining output, according to Finance Minister Tendai Biti.

But analysts say the projection may not be met as uncertainty over new elections tipped for this year has spooked investors, who also worry about Mugabe’s threats to take over foreign firms.—Sapa-AFP