Zimbabwe sees economic growth falling in 2024 due to drought

Zimbabwe's economic growth is expected to fall to 3.5% in 2024 from 5.5% this year, mainly due to an anticipated drought caused by El Nino, Finance Minister Mthuli Ncube said on Thursday.

El Nino, a natural climate phenomenon in which surface waters of the central and eastern Pacific become unusually warm, causing changes in global weather patterns, is expected to hit crop yields during the 2023/24 farming season.

Declining mineral commodities prices will also weigh on growth, Ncube said in a speech.

Zimbabwe's budget deficit is expected to end the year at 1.2% of GDP, he said, while annual inflation is seen falling to 10%-20% in 2024 from 20% in 2023.

"Going into 2024... fiscal restraint and tight monetary policy, together with a healthy current account position, provide the necessary conditions for currency and price stability," Ncube said.

To enhance revenue collection he proposed increasing toll fees for the country's busiest road, adding a levy on sugary drinks and introducing a wealth tax.

He also said lithium miners should submit refinery plans by March 2024 to encourage value addition. Zimbabwe is the leading lithium producer in Africa.

Article and image originally appeared on Reuters