Staff Reporter

Financial analysts have expressed their approval of the recently announced Government's borrowing plan, citing its strategic approach to economic stability and development.

Last Tuesday, Government unveiled its borrowing plan for the year 2024, anchored on domestic and external resource mobilisation to cover a budget financing gap of over ZWL9 trillion. The funds raised under the borrowing plan are expected to finance agriculture and health care

According to economic commentator, Persistence Gwanyanya, the Government's borrowing plan reflects a balanced approach to addressing the country's financial needs while maintaining fiscal discipline.

"The Government's borrowing plan is commendable as it demonstrates a commitment to responsible debt management, ensuring that borrowed funds are utilised effectively for sustainable economic growth.

"The Government's focus on borrowing for infrastructure development is a strategic move that will yield long-term benefits for the economy, stimulating growth and enhancing productivity.

“The 2024 borrowing plan is highly commendable because it shows that we are living within a budget deficit of 1.5 percent, surpassing the standard benchmark of 3 percent, with more improvement prior to 2017," he said.

Gwanyanya also emphasised the fiscal responsibility exhibited by the Government, highlighting that the budget deficit would be financed by non-inflationary sources.

“The announced Z$9 trillion borrowing plan allocates 67 percent for domestic borrowing and the remaining portion for offshore financing; this is a prudent move by the Government,” Gwanyanya said.

Further delving into the details, Gwanyanya noted that the government intends to finance the budget deficit through the issuance of Treasury bills and bonds.

“The ZW$5.8 trillion earmarked for domestic borrowing reflects a reasonable and intentional strategy to boost economic growth; this method of borrowing with a clear intention to multiply is essential for sustained economic development,” he said.

Another analyst, Elton Ziki, emphasised the importance of seeking alternative sources of financing to reduce reliance on traditional lenders and mitigate associated risks.

He also said Government’s borrowing plan was anchored on safeguarding fiscal sustainability.

"Diversifying funding sources is crucial for enhancing financial resilience and reducing vulnerability to external economic shocks. The strategic allocation of borrowed funds towards priority areas is expected to yield positive outcomes, driving economic progress and enhancing the well-being of citizens,” Ziki said.

Meanwhile, Government stated that the borrowing plan seeks to operationalize the medium-term Debt Management Strategy for 2022–2025 and would be based on domestic and external borrowing at affordable costs.

The Government revealed that the plan is also aimed at promoting the growth of domestic capital markets.