Economy on right track
Zimbabwe’s economy is on the right track, with almost all sectors such as agriculture, mining, manufacturing, construction and tourism doing well, driven by the good investment policies unveiled by the Second Republic led by President Mnangagwa.
This was said by economists following the International Monetary Fund (IMF)’s recent forecast that Zimbabwe’s economy will grow by 3,5 percent this year.
Since 2017, President Mnangagwa has emphasised the need for everyone to drive economic growth and eliminate toxic politics to turnaround the fortunes of the economy.
Zimbabwe’s representatives abroad have also been challenged to drive economic diplomacy and the re-engagement of all previously hostile nations under the mantra that the country’s is a friend to all and enemy to none.
The President’s call for private sector-led growth has also seen more companies being opened, with local products accounting for over 70 percent of those on supermarket shelves.
In a statement after concluding the Article IV Consultation with Zimbabwe on March 21, the IMF said the output recovery that resumed last year “is expected to continue, albeit at a slower pace, with growth projected at about 3,5 percent in 2022 and 3 percent over the medium term in line with Zimbabwe’s growth potential”. The IMF added that it “welcomed the positive signs of economic recovery following two years of deep recession”.
Pan African Chamber of Commerce board member, Mr Langton Mabhanga, said “economic recovery and progression remain the dominant characteristic of the Second Republic’s policy and budgetary thrust”.
“Vision 2030 has immensely transformed from illusionary to existential true north for all policies in Government,” said Mr Mabhanga.
“The NDS-1 (National Development Strategy 1) blueprint seeks to grow the restless mining industry into a US$12 billion revenue sector by 2023 and has consistently grown into a major anchor for a steady GDP growth rate that is more inclined towards double digit values, save for the global contemporary challenge of climate challenge.
“The US$12 billion mining economy might pass target in good span given improved metal prices on the global markets and the advent of lithium which is glowing the Zimbabwean flag among the emerging clean energy nations.”
Mr Mabhanga said the climate proofing strategies being employed in the agricultural sector continue to instil resilience in the economy, while the booming construction industry has become a significant leg of the GDP.
He called for discipline in the market to avoid reversing “the hard work and sacrifices” of the last five years.
Another economist, Mr Persistence Gwanyanya, said the IMF’s recently released 2022 Article 1V Consultation report for Zimbabwe “is quite comforting”.
“It notes key progress made in both the real and monetary sectors of the economy.
Importantly, as was indicated by IMF, the Government should be complemented for its swift response to avert crisis from the 2019 to 2020 recession, which was occasioned by natural calamities namely cyclones, drought and Covid-19,” said Mr Gwanyanya.
“From this development, it’s getting clear why Treasury insisted on fiscal prudence;
tightening the fiscal position.
“The swift intervention being complemented by IMF couldn’t have been possible had we
not created some fiscal legroom for intervention in times of a crisis.”
Mr Gwanyanya said while the foreign currency rate differential between the parallel and
interbank rate remains a matter of concern, commendable efforts have been made to
stabilise the local currency although durable stability will only be achieved over a period
of time.
“It needs intervention in the real sectors of the economy. Commendably, this is
happening. There is a lot of work in the construction of especially infrastructure and
housing, which are seen as the fulcrum to recovery.
“Interestingly, IMF seems to be optimistic about Zimbabwe’s economy and its prospects.
The Fund has revised its growth estimates for 2021 to 6,3 percent, which is not very
different from Government’s estimate of 7,8 percent.
“Even the 2022 projection of 3,5 percent is within range of 5,5 percent projection by
Government of Zimbabwe. One can only conclude that there are some major
improvements in the economy, which we cannot afford to ignore,” said Mr Gwanyanya.
He conceded that while the economy has not fully recovered from 2019-2021 recession,
with some people facing food shortages due to erratic rains this season, “there is a good
story to write home about the economy”.-The Herald
