NDS 1 — a step towards Vision 2030

Vision 2030

The National Development Strategy ( NDS) 1 (2021-2025) was launched on January 1, 2021 running under the theme:“Towards a prosperous and empowered upper middle income society by 2030.”

These series of articles seek to give an overview of NDS 1, its goals and targets, as a step towards attainment of Vision 2030.

Zimbabwe’s Vision 2030 in a nutshell seeks to create a prosperous and empowered upper middle income society with an average per capita income of US $3,207 by 2030 (2021: $1,842).

Vision 2030 Goals

The key Vision 2030 goals are summarised as follows:

Creation of a prosperous and empowered upper middle class income society by 2030.

High quality life for all citizens with less income disparities. Employment rate of 80 percent. Reduction in poverty rate to under 25 percent of population.

Increasing the number of households accessing electricity from 52,2 percent (2017) to over 72 percent (2030).

Universal access to clean sources of water to 81% of population.

Increasing average life expectancy from 60 years (2018) to 65 years (2030).

Stable macroeconomic environment sustained by high productivity levels.

Fiscal stability charecterised by budget surpluses.

Reduction in Government debt to within statutory limits.

The road map towards Vision 2030 was realised through the Transitional Stabilisation Plan ( TSP) October 2018 to December 31, 2020, National Development Strategy 1 (2021-2025) and National Development Strategy 2 (2026-2030).

All these three economic development and social transformation programmes draw their goals and aspirations from Vision 2030.

TSP (2018-2020)

TSP was the first step towards Vision 2030. From its name, the objective of the TSP was to stabilise the economy whose macroeconomic fundamentals had been eroded resulting in an unstable national economic environment charecterised by the following: sustained recession (2019-2020) with a GDP contraction of -6 percent and 4,1 percent, respectively; spiralling annual inflation (peaked at 837,52 percent, July 2020) resulting in rapid escalation in prices and erosion of wages purchasing power; skyrocketing exchange rates (proliferation of black market); shortages of basic food commodities; energy crisis (shortages of fuel and power outages); galloping budget deficit; huge domestic and foreign debt burden; high unemployment; falling social services; and so on. All the above factors were causing instability to the management of the economy and there was need to come up with a programme whose focus was to provide stability and create conditions for the growth and path to Vision 2030.

TSP as a short term policy (2 years), focussed on laying the foundation to stabilise the economy. By end of 2020 we saw significant changes in economic stabilisation charecterised by a reduction in the annual inflation rate, which closed at around 300 percent in December, 2020), stable exchange rates (through introduction of foreign exchange auctions), balancing of budget, fiscal consolidation, availability of fuel and stable power supply, among other factors.

Another facet of the TSP was to the engagement and re-engagement with external development partners and international multilateral financial institutions within Africa and outside it. During the TSP, a lot of work was done for Zimbabwe to re-engage with African development institutions such as the African Development Bank and Afreximbank. Efforts were also made to re-engage with multilateral international financial institutions such as the World Bank and the International Monetary Fund.

Although limited success was recorded in the reengagement effort in terms of resources mobilised, the re-engagement under TSP, cleared good ground and ignited the momentum for continuation of the reengagement effort under NDS 1.

Some targets were not met by the end of the TSP tenure on December 31, 2020, but key areas within the broader economic landscape had been stabilised paving way for the NDS 1.

1 (2021-2025)

NDS 1 is a five-year plan which will be underpinned by five annual national budgets, from 2021 to 2025. NDS 1 addresses some of the goals that could not be achieved under TSP as well as setting new targets.

The major challenge at the inception of NDS 1 is the coronavirus pandemic which will possibly derail some of the targets for 2021 due to economic disruptions caused by lockdown measures and other restrictions as well as redirecting treasury resources towards fighting the pandemic.

According to the Minister of Finance and Economic Development, Professor Mthuli Ncube, the formulation of NDS 1 marks a departure in planning approaches with the full adoption of the Integrated Results Based Management ( IRBM) system, complemented by Public Sector Reforms ( PSR). This means that national budgets will only support programmes and projects which contribute to the achievement of NDS 1.

A summary of the NDS 1 macroeconomic objectives for the five years (2021-2025) are as follows:

Average annual GDP growth rate of 5 percent.

Maintain budget deficits averaging no more than 3 percent of GDP.

Achieve and maintain single digit inflation.

Increase international reserves to at least 6 months import cover. Foreign exchange rate stability. Maintain statutory limits of domestic and external debt to below 70 percent of

GDP.

Create at least 760 000 formal jobs over the 5 year NDS 1 period.

Improve infrastructure development. Accelerate value addition (beneficiation) of agriculture and mineral resources.

NDS 1 aims to achieve accelerated inclusive growth and also bring about sustainable economic development outcomes. For the ordinary Zimbabwean, during implementation of NDS 1 (2021-2025), we should start to witness the following:

Growth that leaves no-one and no place behind.

Stable exchange rates.

Low inflation (price stability and restoration of purchasing power of salaries). Employment creation. Improved infrastructure and social services delivery (health, roads, education, power, housing).

Devolution and decentralisation of Government services (increased participation of people in development of their areas of residence).

Commitment and Discipline

Vision 2030 can only be achieved through unwavering commitment from Government for transformation underpinned by strong political will to implement structural reforms, that is to say reforms that bring about change to the fabric of our economy. The Government will have to show its commitment to NDS 1 through fiscal discipline, not spending more than what is being produced and reducing unnecessary expenditure in non-productive items, reducing Government bureaucracy that delays implementation of projects, strengthening corporate governance in public entities (parastatals and state enterprises), unwavering resolve to fight corruption, supporting productive sectors (manufacturing, mining and agriculture) and stimulating and rewarding innovation (digital economy) through a robust education and training system, among other interventions.

(Acknowledgement: source — Ministry of Finance and Economic Development reports)

Allen Choruma writes in his personal capacity and be contacted on email: hoziadvisory2018@gmail.com