ZIMBABWE THE 2021 NATIONAL BUDGET STATEMENT ‘Building Resilience and Sustainable Economic Recovery’ Presented to the Parliament of Zimbabwe On November 26, 2020 By Hon. Prof. Mthuli Ncube, Minister of Finance and Economic Development Harare 1 1 2 Table of Contents INTRODUCTION .......................................................................................................................7 GLOBAL AND REGIONAL OUTLOOK ..................................................................................13 OVERVIEW OF THE DOMESTIC ECONOMY ........................................................................22 Economic Developments ................................................................................................22 GDP Growth and Outlook .............................................................................................27 Inflation ........................................................................................................................29 Exchange Rate .................................................................................................................31 Balance of Payments ......................................................................................................33 Financial Sector ...............................................................................................................35 BUDGET PERFORMANCE AND OUTLOOK ..................................................................41 Revenues .........................................................................................................................42 Expenditures ....................................................................................................................43 Budget Balance and Financing ........................................................................................44 Public Debt .......................................................................................................................45 Domestic Debt ...............................................................................................................46 External Debt .................................................................................................................47 MACRO- FISCAL FRAMEWORK: 2021-23 .....................................................................50 THE 2021 BUDGET .........................................................................................................55 Development Partner Support ..........................................................................................55 THE 2021 BUDGET PRIORITY AREAS .........................................................................61 I. INCLUSIVE GROWTH AND MACRO-STABILITY ..............................................................61 Fiscal Policy ....................................................................................................................62 Monetary Policy ...............................................................................................................70 II. DEVELOPING AND SUPPORTING PRODUCTIVE VALUE CHAINS ................................74 Agriculture ........................................................................................................................74 Access and Timely Financing Arrangements ..............................................................75 Mitigating Against Climatic Change .............................................................................79 Guaranteeing Viability and Competitiveness of Farming Business..........................85 Marketing Systems and Infrastructure ........................................................................88 Protecting the Environment for Sustainability of the Sector .....................................91 Livestock .........................................................................................................................93 Food Imports ..................................................................................................................96 Industrialisation ...............................................................................................................98 3 Medium-Term Bank Accommodation Facility ...........................................................100 Competitiveness and Investment Attraction ...........................................................100 Zimbabwe Investment Development Agency ............................................................101 Value Chains .................................................................................................................101 Buy Zimbabwe Campaign ..........................................................................................103 Ziscosteel Revival ........................................................................................................104 Exports Promotion ......................................................................................................105 Research and Development ........................................................................................106 Industrial Upgrading ...................................................................................................107 Empowerment Initiatives .............................................................................................107 Jobs Creation/Industry Regeneration and New Enterprises ...................................107 National Venture Capital Fund ....................................................................................108 SMEs, Youths and Women ..........................................................................................109 Capacitation of the Sovereign Wealth Fund .............................................................. 110 Sport, Arts and Recreation ......................................................................................... 111 III. OPTIMISING THE VALUE OF OUR NATURAL RESOURCES ....................................... 112 Mining ............................................................................................................................ 112 Tourism .......................................................................................................................... 118 I. INFRASTRUCTURE, ICT AND THE DIGITAL ECONOMY ..............................................122 Transport ........................................................................................................................124 Road Fund ....................................................................................................................127 Rail .................................................................................................................................128 Aviation ..........................................................................................................................129 Border Posts .................................................................................................................131 Water Supply and Sanitation ..........................................................................................132 Dam Projects ................................................................................................................133 Urban Water and Sanitation .......................................................................................135 Water Supply Schemes for Small Towns and Growth Points ..................................136 Rural WASH ..................................................................................................................138 Energy ............................................................................................................................139 Digital Economy ............................................................................................................141 Devolution ......................................................................................................................143 Housing Development ....................................................................................................145 II. HUMAN CAPITAL DEVELOPMENT, WELL-BEING AND SOCIAL PROTECTION ....147 Healthcare .....................................................................................................................147 4 Higher Education ...........................................................................................................152 Basic Education ............................................................................................................154 Social Protection ...........................................................................................................159 Child Protection .............................................................................................................160 Peace and Security .......................................................................................................160 War Veterans ..................................................................................................................161 III EFFECTIVE INSTITUTIONS BUILDING AND GOVERNANCE ...................................161 Social Contract ...............................................................................................................161 State Owned Enterprises ..............................................................................................162 Implementation, Monitoring and Reporting ....................................................................167