With a projected economic growth of 3,8 percent for 2023, Zimbabwe is within close range of regional growth prospects, estimated at 4 percent, according to the African Development Bank (AfDB).
Despite the adverse impacts of Covid-19 and other global shocks like supply chain disruptions caused by the conflict in Ukraine, Zimbabwe has remained resilient. The World Bank predicted the economy would grow by 3,4 percent in 2022.
Finance and Economic Development Minister Mthuli Ncube projected the economy to record a growth upturn of 3,8 percent supported by increased agriculture production with normal to above normal rainfall expected in the country.
By the end of 2022, Zimbabwe’s agriculture sector was already showing promising signs for the 2022/23 season with just over 465 700 hectares of maize planted by mid-December, compared with just over 215 480 hectares by mid-December in 2021
The agriculture sector feeds about 70 percent of the raw materials required in the manufacturing sector.
Many economic observers have also corroborated the prospects for a good farming season, among them FBC Securities, which said “The sector is poised for favourable performance in the current season owing to projections of above normal rainfall and access to government and private inputs”.
Additionally, increased activity in the mining sector is expected to drive economic growth and post Covid-19 recovery process despite an array of challenges.
The mining sector is expected to grow by 10,4 percent underpinned by anticipated favourable international mineral prices, as well as increase in investments. The Government is working to strengthen the governance framework for the mining sector in order to improve confidence and investment in the sector.
According to the AfDB, the region is set to outperform the rest of the world in economic growth over the next two years, with real gross domestic product (GDP) averaging around 4 percent in 2023 and 2024.
This is higher than projected global averages of 2,7 percent and 3,2 percent, as stated in the AfDB’s Africa’s Macroeconomic Performance and Outlook report for the region, released in Abidjan recently.
With a comprehensive regional growth analysis, the report shows that all the continent’s five regions remain resilient with a steady outlook for the medium-term, despite facing significant headwinds due to global socio-economic shocks. It also identified potential risks and called for robust monetary and fiscal measures, backed by structural policies, to address them.
In remarks during the launch, AfDB president Dr Akinwumi Adesina said the release of the new report came at a time when African economies, faced with significant headwinds, were proving their resilience.
“With 54 countries at different stages of growth, different economic structures, and diverse resource endowments, the pass-through effects of global shocks always differ by region and by country.
“Slowing global demand, tighter financial conditions, and disrupted supply chains therefore had differentiated impacts on African economies,” he said. “Despite the confluence of multiple shocks, growth across all five African regions was positive in 2022–and the outlook for 2023-24 is projected to be stable.”
However, the report also sends a cautionary note on the outlook following current global and regional risks such as the war in Ukraine.
These risks including soaring food and energy prices, tightening global financial conditions, and the associated increase in domestic debt service costs. Climate change–with its damaging impact on domestic food supply and the potential risk of policy reversal in countries holding elections in 2023–pose equally challenging threats.
The group also proffers possible solutions for African economies, especially those battling inflationary pressures.
From the suggestions offered, Zimbabwe seems to be on the right path after the Government last year came up with measures to tame inflation, speculative trading on the Zimbabwe Stock Exchange, control money supply and generally address arbitrage behaviour in the economy.Close
The AfDB said: “Timely and aggressive monetary policy tightening in countries with acute inflation, and cautious policy tightening in countries where inflationary pressures are low.
“Coordination with fiscal policy will further strengthen the levers to ease inflationary pressures.”
Africa’s pre-Covid-19 top five performing economies are projected to grow by more than 5,5 percent on average in 2023-2024 and to reclaim their position among the world’s 10 fastest-growing economies.
These countries are Rwanda 7,9 percent; Côte d’Ivoire 7,1 percent; Benin 6,4 percent; Ethiopia 6 percent and Tanzania 5,6 percent.
Other African countries are projected to grow by more than 5,5 percent in the 2023-24 period and these are the Democratic Republic of Congo 6,8 percent; Gambia 6,4 percent; Mozambique 6,5 percent; Niger 9,6 percent; Senegal 9,4 percent and Togo 6,3 percent.