A New Fiscal Chapter: Analysis, Allocations, Reactions, and Implications for NDS2 and Vision 2030
Published: 02 January 2026 —By Tete Getty, Founder, Tete Getty House & TGRI
As the clock struck midnight on 1 January 2026, Zimbabwe’s 2026 National Budget, as presented by Honourable Professor Mthuli Ncube on 27 November 2025 and approved by Parliament in December, has officially took effect. Signed into law through the Finance Act and Appropriation Act by His Excellency President Emmerson D. Mnangagwa, this ZiG290 billion (approximately US$9.5 billion, or 17% of GDP) fiscal plan marks the inaugural blueprint for implementing National Development Strategy 2 (NDS2, 2026–2030), under the theme: “Enhancing Drivers of Economic Growth and Transformation Towards Vision 2030.”
For Zimbabweans navigating daily realities, investors seeking opportunities in our resilient economy, and global partners in trade, this budget balances revenue mobilisation with growth-supporting expenditures amid a multipolar world. Projected GDP growth of 5% in 2026 (down from 6.6% in 2025) reflects cautious optimism, anchored in agriculture, mining, and diversification.
Key Features and Revenue Measures
Revenue targets stand at ZiG275.7–288 billion (US$9–9.4 billion), up from 2025, through measures including:
VAT increase from 15% to 15.5% (effective 1 January 2026), expected to broaden the base while exempting essentials.
IMTT reduction on ZiG transactions from 2% to 1.5% (USD unchanged at 2%), encouraging local currency use.
Mining incentives and adjustments (e.g., reversed gold royalty hike after industry feedback).
New digital services withholding tax and informal sector formalisation tools.
Concessions during parliamentary debate included withdrawing a proposed cash withdrawal levy and adjusting allocations (e.g., additional ZiG800 million for Parliament).
Sectoral Allocations: Prioritising People and Productivity
Chart: Sectoral Allocations Breakdown ©TeteGetty.com
Mixed Reactions: Praise for Discipline, Concerns Over Burden
The budget has elicited diverse views. Supporters commend fiscal prudence, ZiG promotion, and growth focus amid global headwinds. However, critics—including economists, opposition figures like Honourable Tendai Biti, and business chambers—have been vocal. They label it regressive and punitive, arguing that new taxes on fast food, gambling, plastic bags, alcohol, and capital gains disproportionately burden the poor and vulnerable, exacerbating food insecurity and poverty amid deepening economic hardships.
Former Parliamentary Portfolio Committee chairperson Clement Chiduwa highlighted the “huge burden of multiple taxes on a single transaction,” potentially sparking inflation or unrest if not managed carefully.
Others, such as economist Vince Musewe, criticise the lack of meaningful policy shifts to address structural issues like high debt, informalisation risks, and unrealistic projections, calling the framework “unsound” and urging rejection.
A rights-based analysis by Nkosi Sibanda notes how such measures undermine economic and social rights, pushing more into poverty.
These concerns, while valid in highlighting immediate hardships, must be contextualised against NDS1’s steady progression.
Under NDS1 (2021–2025), Zimbabwe achieved substantial milestones: average real GDP growth exceeded targets, with 6.6% projected for 2025 (up from 1.7% in 2024), driven by agricultural recovery (wheat >639,942 tonnes, maize self-sufficiency) and mining surges (gold >40 tonnes, lithium investments in billions).
Foreign reserves rose dramatically from US$276 million in April 2024 to over US$900 million by October 2025, ranking Zimbabwe first globally in reserve accumulation per the World Bank.
Inflation control, ZiG introduction, and sectoral growth (agriculture 24% contribution) demonstrate fiscal discipline yielding results, reducing food insecurity from 59% in 2020 toward <10% by 2025 targets.
Infrastructure advances, like the Harare-Masvingo-Beitbridge highway and dam constructions, have created jobs and boosted rural livelihoods, aligning with NDS1’s aim to reduce poverty to under 25%.
This steady progression refutes claims of “incompetence” or “vacuous ideology,” showing internal reforms driving empowerment despite external pressures. For NDS2, addressing critics means enhancing targeted relief (e.g., exemptions for essentials) and consultations to mitigate burdens, ensuring inclusive growth.
Tete Getty Perspective: Advancing National Resilience Through Strategic Fiscal Policy
At TGRI, grounded in Ubuntu and diaspora insight, we view the 2026 National Budget as a disciplined step toward self-reliance, building on NDS1’s proven successes; robust growth, reserve accumulation, and sectoral recoveries, to launch NDS2 effectively. While acknowledging critics’ concerns over potential burdens, the budget’s exemptions, incentives, and social allocations aim to protect vulnerable groups and fund long-term investments.
In a multipolar world, diversified partnerships across BRICS, EU, US, and beyond will amplify Zimbabwe’s strengths in resources, innovation, and tourism. Unity and transparent implementation will ensure inclusive progress, empowering Zimbabweans to construct the Second Great Zimbabwe with resolve and shared purpose.
TGRI | January 2026
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