Zimbabwe economy to grow 3.7% in 2017: finance minister

Zimbabwe’s economy will grow by 3.7 percent in 2017, the finance minister said on Thursday, despite a public sector wage bill devouring much of the government’s expenditure.

Finance Minister Patrick Chinamasa said that growth would be boosted by the farming sector, which is forecast to grow by 21.3 percent this year, along with mining which will grow by 5.1 percent.

He said tax revenues are expected to total $3.7 billion (3.2 billion euros) for the year — but warned that the soaring public sector jobs bill left little for capital expenditure.

“The overall employment costs for 2016 remained unsustainably high at $3.21 billion accounting for 91.7 percent of total revenue,” he said.

“The level of the wage bill continues to present challenges related to cash-flows.”

Under long-time President Robert Mugabe, Zimbabwe has suffered mass unemployment, a collapse of many public services and banknote shortages as foreign investors have fled.

Zimbabwe’s economic output has halved since 2000 and unemployment stands at over 90 percent with the government the country’s only reliable employer.

Chinamasa also revealed that Zimbabwe’s debt pile currently stands at $11.3 billion — $4 billion of which is held by domestic creditors with the rest in foreign hands.

To contend with crippling cash shortages, Zimbabwe last year introduced a new local currency called “bond notes” which were initially pegged to the US dollar but have lost value against the greenback on the black market.