Government launched the MTP on Thursday and it will run from 2011 to 2015.
Addressing delegates at the launch, Mashakada said the thrust of the MTP was on macro-economic stabilisation and recovery.
“We need to stick to policy and not be swayed by populism,” said Mashakada, adding that there was a need for the country to adopt a transformation mode over the next five years for the MTP to be a success.
“The Ministry of Economic Planning and Investment Promotion will use this document to guide the economy, direct investment into priority areas and set the economic development trajectory of the country,” he said.
The MTP requires US$9,2 billion in order to meet its economic growth targets.
Sources of funding would emanate from foreign and local investments, leveraging government assets, donations from the international community, diaspora remittances and Bilateral Investment Promotion and Protection Agreements.
The major objectives of the plan are sustainable economic growth, development and transformation, poverty reduction, employment creation, price stability and the creation of a sustainable balance of payments position.
Despite the macro-economic stabilisation measures introduced in 2009, international investors have shunned Zimbabwe as a favourable investment destination due to political uncertainty and conflicting signals from the inclusive government.
The MTP document notes that Zimbabwe’s economy is still characterised by low aggregate demand, low wages, low capacity utilisation and low productivity.
However, the success of the MTP is dependent on a number of underlying macro-economic assumptions, such as improved energy supplies, financial stability, increased access to lines of credit and re-engagement with the international community among others.
Captains of industry and commerce called on government to be consistent in its policies so that they would be able to plan and structure appropriate business models.
“What has been found wanting is the effective implementation of these programmes? The manufacturing sector is experiencing sluggish recovery while utilities are problematic,” Dairibord chief executive officer, Antony Mandiwanza said.
Since independence government has crafted various blue-prints but these documents were consigned to the drawers and were never implemented.
Confederation of Zimbabwe Industries president Joseph Kanyekanye said government should speed up the implementation of the plan as this had been lacking over the years.
He also questioned government’s ability, under the MTP to maintain a current account deficit of not more than 5% of Gross Domestic Product (GDP) by 2015 in light of civil service wage demands and related government expenditure and costs.
Chamber of Mines Zimbabwe president, Winston Chitando implored government to ensure that the mining sector played its key role in reviving the economy.
“We are expecting 13 tonnes of gold this year which is less than 50% of what was produced in previous years,” said Chitando.
The MTP envisages increased gold production to 25 tonnes by 2015.
The document states that the bulk of government expenditure would initially be recurrent. On the one hand, the plan envisages material and significant reduction in recurrent expenditure as a proportion of GDP from the current levels of about 27,7% of GDP in 2010 to about 22, 9% of GDP by 2015.
On the other hand, the MTP anticipates increased capital expenditure to at least 8% of GDP in 2015 from about 5% of GDP this year.
PM decries ‘mixed messages’ from govt
Prime Minister Morgan Tsvangirai told delegates that the first one and a half years of the inclusive government’s lifespan were progressive in terms of economic policy implementation but bemoaned the discord that was now creeping in.
Tsvangirai said people need to be fully engaged in wealth creating activities during the plan period and said government should create the platform and environment for citizens to fully exercise their innovative and entrepreneurial talents.
“But we should desist from the major disease that has afflicted this government and which has sent a negative message to business and investors, both local and foreign,” Tsvangirai said.
“It is the disease of mixed messages from the same government which leads to policy inconsistency and policy unpredictability.”