The Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement, Dr Anxious Masuka has more joy than anyone else from yesterday’s 2021 mid-term budget review statement as he was more than replenished for his ministry needs.
Growth of the agriculture sector in 2021 has been revised upwards on account of higher-than-expected performance of almost all crops particularly maize, groundnuts, and sorghum. The sector is, therefore, estimated to grow by 34%, up from the original Budget projection of 11%. The positive performance is on account of a good 2020/21 rainfall season, supported by adequate planning and preparation. The Meteorology Department records indicate that the country largely received normal to above normal rainfall during the past season, with even distribution in space and time. Crop and Livestock Assessment Report indicates an overall 23% increase in area planted for crops to 3.5 million ha in the 2020/2021 season.
Maize output for the 2020/21 cropping season is estimated at a record 2.7 million tonnes, about 193.1% up from 0.9 million tonnes produced in the 2019/20 season. The maize output will be complemented by increases in the output of other grains, which include sorghum, pear millet and finger millet. This level of output surpasses the national cereal requirement of an estimated 1.8 million tonnes and 450 000 tonnes for human and livestock consumption, respectively. Government has designated the GMB as the sole buyer of grain. Out of the grain stock produced, it is anticipated that 1.9 million tons of grain, valued at ZWL$67.7 billion, will be delivered to GMB by farmers country wide. Government has put in place mechanisms for paying for the deliveries, mainly from proceeds from sale of grain, AMA Bills Facility and fiscal revenues. As at 26 July 2021, grain deliveries by farmers to GMB depots stood at 637 000 tons valued at ZWL$20.9 billion, of which 567 000 tons was for maize, 58 000 tons traditional grains, 11 000 tons soya beans and 661 tons wheat. Payments against these grain receipts stood at ZWL$13.3 billion, leaving a balance of ZWL$7.6 billion which is currently being processed.
The area under tobacco increased by 6.1% from 117 976 hectares cultivated in the 2019/20 season to 125 176 hectares in the 2020/21 season with 84 000 hectares under irrigation, while the rest was under dry land. The bulk of the crop was in the traditional tobacco growing areas of Mashonaland and Manicaland Provinces. From the increased hectarage, tobacco output is projected to increase by 8% to 195 million kilograms in 2021 compared to 184 million kilograms recorded in the 2019/20 season. The anticipated improvement is partly attributed to the good rains received during the season and increased financing by contractors who provided sufficient inputs during the season.
Benefitting from timeous distribution of inputs and better rainfall, area planted for cotton increased by 37.5% to 239 619 hectares in the 2020/21 season, from 174 212 hectares, as farmers responded well to the Government incentive aimed at resuscitating the cotton to clothing value chain. Resultantly, initial estimates put cotton output to at least 140 000 tonnes during the 2020/21 season, a 39% increase from 101 000 tonnes produced in the 2019/20 season. The crop output benefited from continued support from the Cotton Company of Zimbabwe (COTTCO) administered Presidential Cotton Free Inputs Scheme, complemented by private players who also supported cotton farmers through contract farming.
The above-normal rainfall season has significantly enhanced water security for the sugar cane industry. Tugwi-Mukosi Dam spilled for the first time since its commissioning in May 2017, while Lake Mutirikwi reached over 60% of its capacity. This water resource is adequate to cater for 75% of the sugar industry’s irrigated cane area for at least three seasons. Sugarcane production is, therefore, projected at 4.35 million tonnes, which is 1.8% increase from 4.27 million obtained in the 2019/2020 season. Sugar production for the year is projected to increase on the back of expected improvements in yields, cane quality and milling efficiencies.
In 2021, winter wheat output is projected at 280 000 tonnes, 32% up from the 212 000 tonnes produced in 2020 on account of the 66 000 hectares of winter wheat planted during the winter season. Wheat yield is also expected to be enhanced from timeous provision of inputs. Projected higher output is on account of: Adequate water availability, with average dam levels reported at 95.9% of capacity by May 2021; Availability of chemicals and fertiliser on the market; and Expected stability of electricity supply.
Government recognises the importance of capacitating the Ministry of Mines and Mining Development in order for the country to derive value from its minerals. Therefore, the 2021 National Budget allocated ZWL$1.4 billion towards the operations of the Ministry. A total of ZWL$561 million (40%) has so far been disbursed, with the following selected milestones having been achieved.
- Harare-Masvingo-Beitbridge Road
To date, a total of 180.45 km have been completed and opened to traffic. This is, however, below the targeted 200kms anticipated to have been completed by December 2020. Work stoppages arising from COVID-19 imposed lockdowns as well as disruptions caused by the heavy rains affected project implementation. The target to deliver 200kms during 2021 remains on course with funding modalities having been put in place to ensure smooth implementation of the project.
- Gross Domestic Product (GDP)
GDP growth for the year 2021 is projected to remain strong at 7.8%, slightly above the 2021 National Budget growth target of 7.4%. The strong rebound of the economy is anchored on better 2020/21 rainfall season, higher international mineral commodity prices, stable macroeconomic environment and managed COVID-19 pandemic. 28. Higher growth rates are projected in agriculture, electricity generation, manufacturing as well as financial services.
- CAPITAL DEVELOPMENT BUDGET
Capital spending as at 30 June 2021 amounted to ZWL$67.4 billion, against a target of ZWL$58 billion.
Major expenditures were incurred towards:
Infrastructure development projects, ZWL$21.2 billion;
Equity and investment shares, ZWL$21.6 billion; and
Grain procurement ZWL$13.5 billion.
- Debt Servicing
Government has been making debt service payments on active portfolios so as to unlock new financing and trigger disbursements to ongoing projects. During the first quarter of 2021, debt service payments amounting to US$17.04 million were made towards token payments (US$1.6 million), other multilateral creditors (US$ 4.11 million) and bilateral Non-Paris Club (US$11.33 million).
- From January to June: Revenue – ZWL$198.2 billion, attributed to taxes and non-tax revenue. Expenditure – ZWL$197 billion Surplus – ZWL$570 million
- As at 26/7/21, Grain deliveries to the GMB stood at 636 000 tonnes, valued at $20.9 billion
- Capital spending amounted to $67 billion against a budgeted $58 billion.
- Cumulative revenue collection 198.2 Zim dollars against a target of 182.1 million, giving a positive variance of 8.8 percent.
- Spending within budget has improved public finances.
- Food imports will be lower following an excellent 2020 agricultural season.
- Current account balance for 2021 is projected to remain in a surplus position of 611.6 million compared to 1.1 billion recorded in 2020.
- The banking sector is safe and sound, even under the impact of the covid-19 pandemic.
- Inflation projeted to drop to between 22 and 35% by December 2021
- GDP growth projected at 7% for 2022