Driving resilience, growth: A transformative budget for 2025

Innocent Mujeri

As Zimbabwe charts a path towards sustainable development and economic resilience, the 2025 National Budget emerges as a pivotal tool to achieve these goals.

Presented by the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube last week, the budget is framed under the theme “Building Resilience for Sustained Economic Transformation.” 

This ambitious financial plan reflects a clear intent to overcome current challenges while paving the way for long-term growth and inclusivity.

With projected GDP growth of six percent for 2025, this budget balances fiscal prudence with an expansive vision for development. It targets critical areas like agriculture, energy, infrastructure, and social equity, offering a robust framework to drive economic recovery, resilience, and transformation. 

Agriculture is the backbone of Zimbabwe’s economy, contributing significantly to GDP, employment and exports.

The 2025 National Budget makes transformative strides in addressing the vulnerabilities of this sector, especially in the context of climate change. 

With the La Niña phenomenon expected to bring above-average rainfall, the budget capitalises on this opportunity to boost agricultural productivity.

One of the stand-out initiatives is the introduction of hybrid agricultural index insurance under the Farmers’ Basket programme. 

This innovative insurance mechanism provides financial protection to smallholder farmers against climate-induced losses, a critical step towards mitigating the adverse impacts of droughts and other extreme weather events.

The success of the pilot phase, which paid out US$232 997 to 4 014 farmers following drought-induced losses, highlights its potential to enhance resilience among rural communities.

The allocation of resources for irrigation infrastructure, rural development, and extension services further strengthens the agricultural framework. 

By empowering farmers with modern tools and techniques, the budget aims to achieve food security and position Zimbabwe as a regional agricultural powerhouse.

Energy shortages have long been a bottleneck for Zimbabwe’s economic progress. 

The 2025 budget takes a bold stance to address this issue by prioritising reforms in the energy sector. Recognising the private sector as a key partner, the Government plans to lower restrictions on self-generation and attract private investments in energy infrastructure. This approach is not only pragmatic but essential for ensuring a stable and sustainable energy supply.

The allocation for energy development, though modest, is strategically focused on expanding domestic power generation. 

By integrating renewable energy sources and enhancing grid efficiency, Zimbabwe can reduce its reliance on imported electricity and achieve greater energy independence. 

This will, in turn, unlock productivity across sectors, from manufacturing to mining.

Infrastructure investment is a cornerstone of the 2025 budget, reflecting Government’s commitment to economic modernisation. 

The budget allocates substantial resources to transport, water, housing, and digital infrastructure. 

These projects are not just about economic growth; they are about connecting communities, improving accessibility, and creating equitable opportunities.

Transport infrastructure, for instance, is set to benefit from targeted road rehabilitation projects. By improving connectivity between urban and rural areas, these initiatives will enhance trade, reduce logistics costs, and boost market access for agricultural and industrial goods. Similarly, investments in water and sanitation infrastructure aim to address critical public health and environmental challenges.

Housing development receives a noteworthy allocation, reflecting the Government’s dedication to addressing urbanisation and housing shortages. Affordable housing projects, coupled with innovative financing mechanisms, will provide secure living conditions for thousands of families while stimulating the construction sector.

In a challenging fiscal environment, the Government has demonstrated commendable discipline in managing public finances. 

The projected fiscal deficit of 1.4 percent of GDP underscores a commitment to prudent spending and resource optimisation. This is achieved through a combination of measures, including limiting recurrent expenditures, rationalising public sector wages, and enhancing revenue collection mechanisms.

Debt sustainability remains a critical focus. With external debt standing at US$12.3 billion, the Government is pursuing arrears clearance and restructuring processes to reduce debt servicing costs. These efforts are complemented by cautious borrowing strategies, leveraging concessional loans for infrastructure projects while avoiding unsustainable debt accumulation.

One of the most inspiring aspects of the 2025 budget is its emphasis on social equity and empowerment. Programmes targeting women, youth, and marginalised communities are at the forefront, ensuring that economic growth translates into tangible benefits for all.

The expansion of financial inclusion initiatives, such as loans for women and young entrepreneurs, is a game-changer. By increasing access to credit and business support services, the Government is fostering grassroots entrepreneurship and reducing economic disparities. The data speaks volumes: loans to women as a percentage of total bank loans rose from 4.48 percent in 2023 to 9.86 percentile in 2024, a testament to the impact of these initiatives.

Additionally, the focus on education and skill development, particularly in science, technology, and innovation, aligns with the Government’s vision of building a knowledge-driven economy. Investments in human capital development will empower the workforce to adapt to evolving economic demands, driving productivity and competitiveness.

Zimbabwe’s vulnerability to climate change necessitates urgent action, and the 2025 budget does not disappoint. Substantial allocations for environmental protection, climate resilience, and renewable energy projects reflect a clear commitment to sustainability. Programmes like the African Risk Capacity drought insurance policy and reforestation initiatives are forward-thinking measures that address both immediate and long-term challenges.

The Government’s emphasis on sustainable mining practices and reducing carbon emissions further aligns with global environmental goals. By integrating climate considerations into economic planning, Zimbabwe is positioning itself as a responsible global player.

While the 2025 budget sets an impressive agenda, its success hinges on effective implementation and collaboration. Challenges such as external debt management, revenue generation, and corruption must be addressed to ensure that the allocated resources deliver maximum impact.

However, these challenges also present opportunities. Public-private partnerships can play a pivotal role in financing and executing infrastructure projects. Strengthening institutions and governance frameworks will enhance transparency and accountability, building public trust in the budget process.

The 2025 National Budget is a transformative roadmap that balances ambition with realism. It addresses Zimbabwe’s immediate needs while laying the groundwork for sustainable growth and resilience.