HARARE
–
Finance
minister
Mthuli
Ncube
on
Thursday
presented
a
ZiG290
billion
(US$9.5
billion)
2026
national
budget,
touting
fiscal
discipline,
falling
inflation
and
mining-led
growth
as
the
pillars
expected
to
carry
Zimbabwe
into
the
second
phase
of
its
economic
plan.
The
budget
forecasts
revenues
of
ZiG288
billion
(US$9.4
billion)
against
expenditures
of
ZiG290
billion
(US$9.5
billion),
leaving
a
narrow
ZiG3.2
billion
deficit
(US$105.9
million)
–
equivalent
to
just
0.2
percent
of
GDP.
Ncube
said
the
tight
fiscal
stance
was
designed
to
“sustain
macroeconomic
stability”
as
the
country
enters
the
National
Development
Strategy
2
period.
Consumers
will
face
immediate
pressure
from
a
0.5
percentage
point
increase
in
VAT,
which
rises
to
15.5
percent
from
January
1,
2026.
To
offset
this,
government
is
reducing
the
Intermediated
Money
Transfer
Tax
(IMTT)
from
2
percent
to
1.5
percent
on
ZiG
transactions,
part
of
efforts
to
encourage
usage
of
the
local
currency.
IMTT
will
also
become
tax-deductible,
lowering
business
costs.
A
new
Digital
Services
Withholding
Tax
will
apply
to
payments
to
offshore
platforms
such
as
e-hailing
apps,
online
content
providers
and
satellite
internet
firms.
In
a
major
shift
likely
to
lift
mineral
revenues,
gold
royalties
have
been
standardised
across
all
producers.
The
new
structure
will
see
3
percent
charged
on
prices
up
to
US$1,200/oz;
5
percent
between
US$1,201–2,500/oz
and
10
percent
above
US$2,501/oz.
The
government
also
moved
to
liberalise
gold
trading,
allowing
individuals
and
authorised
dealers
to
possess,
sell,
pledge
or
trade
certified
gold
bars
under
regulated
conditions
–
a
step
intended
to
open
gold
investment
to
the
public
and
improve
traceability.
The
minister
projected
5
percent
growth
in
2026,
following
an
estimated
6.6
percent
expansion
in
2025,
driven
by
agriculture
recovery,
stable
inflation
expectations
and
steady
mineral
prices.
Annual
ZiG
inflation
stood
at
32.7
percent
in
October
2025,
but
Ncube
said
the
government
expects
single-digit
inflation
next
year,
a
target
economists
will
scrutinise
after
the
VAT
increase.
Zimbabwe
remains
heavily
supported
by
its
expatriate
population.
Remittances
are
expected
to
reach
US$2.7
billion
in
2025
and
US$2.8
billion
in
2026,
helping
drive
a
current
account
surplus
of
US$961
million
in
the
first
nine
months
of
2025.
Education,
health
and
social
support
dominate
the
spending
plan.
The
vote
for
primary
and
secondary
education
is
ZiG47.4
billion
(US$1.55
billion);
health
and
child
care
ZiG30.4
billion
(US$997
million)
and
social
protection
ZiG12.7
billion
(US$416
million).
Education
receives
the
single
largest
vote,
supporting
salaries,
new
classrooms
and
school
equipment.
Health
funding
targets
primary
care
and
rural
access.
Agriculture
receives
ZiG26.8
billion
(US$880
million)
for
irrigation,
dam
projects,
livestock
programmes
and
grain
reserves
which
Ncube
said
were
priorities
after
recent
drought
shocks.
On
major
infrastructure
projects,
Ncube
set
aside
ZiG4.6
billion
(US$151
million)
for
the
Harare–Masvingo–Beitbridge
highway
and
Bulawayo–Victoria
Falls
road
upgrades.
Under
water
and
sanitation,
Ncube
directed
ZiG1.1
billion
(US$36
million)
to
Kunzvi
Dam,
Gwayi-Shangani
Dam
and
borehole
drilling.
For
housing,
the
finance
minister
set
aside
ZiG948.9
million
(US$31
million)
for
regulatory
reforms
and
on-site
infrastructure
servicing.
He
said
the
projects
are
intended
to
stimulate
jobs
and
investment.
The
security
sector
remains
heavily
funded
with
an
allocation
of
ZiG46.8
billion
(US$1.53
billion)
covering
recruitment,
training,
accommodation,
vehicles,
and
implementation
of
the
Military
Salary
Concept.
The
government
is
offering
targeted
incentives
to
firms
that
transition
to
24-hour
production,
including
additional
tax
deductions
and
accelerated
depreciation
allowances.
A
more
generous
package
is
aimed
at
Business
and
Knowledge
Process
Outsourcing
(BKPO)
firms
who
get
15
percent
flat
corporate
tax,
100
percent
first-year
capital
allowance,
duty
suspension
on
equipment,
US$1,500
per
employee
tax
credit
under
YETI
and
15
percent
flat
tax
on
essential
expatriate
staff.
Treasury
sees
BKPO
as
a
high-growth,
employment-intensive
sector
capable
of
generating
foreign
currency.
Official
Development
Assistance
is
projected
to
fall
to
US$350
million
in
2026,
down
from
the
US$500
million
targeted
for
2025
–
a
30
percent
decline
that
could
stretch
social
services
dependent
on
donor
support.
Ncube’s
2026
budget
continues
the
government’s
push
to
brand
Zimbabwe
as
fiscally
disciplined
following
years
of
volatility.
The
near-zero
deficit
is
its
centrepiece.
But
risks
could
threaten
the
projections,
analysts
warned.
VAT
rise
may
pressure
prices,
undermining
inflation
targets
while
mining
and
remittances,
the
twin
pillars
of
revenue,
are
exposed
to
global
volatility.