Business Reporter
Zimbabwe’s Finance Minister Mthuli Ncube has emphasized that Zimbabwe’s economy has benefited from a weaker domestic currency, claiming an average growth rate of 6.8% over the past three years.
His comments were made during a signing ceremony for four financing agreements with the European Union (EU) in Harare.
Ncube noted that the newly introduced Zimbabwe Gold (ZiG) currency, which has been depreciating against the US dollar since its launch in April, is crucial for economic growth. He argued that a domestic currency is essential for economic development, stating,
“If your sole reference currency is foreign currency, you need a domestic currency to grow”.
He attributed the stagnation in economic growth this year not to the currency situation but to climate change. Ncube pointed out that despite significant currency volatility, the economy has managed to grow, suggesting that the weaker currency has provided more advantages than disadvantages.
He explained that for exporters, currency depreciation can enhance competitiveness by increasing their inflows in local currency terms.
EU Financing Agreements
During the ceremony, four financial agreements worth €75 million (approximately US$80 million) were signed to support various development initiatives in Zimbabwe. The EU ambassador to Zimbabwe, Jobst von Kirchmann, highlighted that the funding aims to accelerate the green transition by supporting agricultural value chains, renewable energy investments, and biodiversity conservation efforts.
The projects funded will focus on:
- Agri-value chain support: €28 million allocated to promote green economic growth in horticulture and small grains.
- Biodiversity enhancement: €26 million dedicated to conservation efforts and resilience-building activities in high biodiversity areas.
- Transparency and accountability: €16 million aimed at increasing citizen participation in governance and service delivery.
- Gender equality and women empowerment: €7 million focused on strengthening women’s socio-economic status to combat violence against women and girls.
Ncube’s remarks and the EU’s financial support reflect a strategic approach to addressing both immediate economic challenges and long-term sustainability goals in Zimbabwe.
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