Zim economy on the upswing, rating agency says

ZIMBABWE’S economy has shown “impressive” resilience and growth, driven by the government’s recent efforts to stabilise the economy and attract foreign investment, according to the United Arab Emirates (UAE)-headquartered rating agency, ICRA Rating.

As part of a comprehensive effort to revitalise the economy, the government has implemented a series of measures, including the introduction of a new currency, the Zimbabwe Gold, aimed at stabilising the financial system and stimulating economic growth. It has also pursued a tight monetary policy thrust and contained spending as part of measures to rein in inflation.

“Zimbabwe’s market continues to demonstrate remarkable resilience and growth, bolstered by recent government initiatives to stabilise the economy and attract foreign investment,” the agency said in a statement yesterday.

“These initiatives are beginning to yield positive results, although the country still faces significant challenges, such as infrastructure deficits.

“Despite these hurdles, Zimbabwe’s market presents a mix of opportunities and risks for investors and entrepreneurs.”

ICRA Rating is one of the fastest-growing credit rating agencies with a significant international presence.

The firm has offices in London, the United Kingdom, Spain and the African regions such as Tanzania, Uganda, Zambia and Zimbabwe.

“We are proud to collaborate with the Zimbabwe National Chamber of Commerce and the Zimbabwe Association of Microfinance Institutions,” it said.

“Furthermore, we are in the final stages of discussions with the Reserve Bank of Zimbabwe, aiming to strengthen our ties and enhance our support for the Zimbabwean market.”

ICRA said trade statistics between the UAE and Zimbabwe supports the urgent need for a complete financial ecosystem.

Bilateral trade between Zimbabwe and the UAE experienced remarkable growth starting in 2019, with the Dubai Chamber of Commerce reporting that Zimbabwe’s exports to the UAE surged to US$2,3 billion in 2021, solidifying the UAE’s position as Zimbabwe’s second-largest export market.

Credit rating reports provide investors with a clear and reliable assessment of the creditworthiness of businesses and governments, thereby boosting investor confidence and encouraging more investments.

Entities with higher credit ratings typically enjoy lower borrowing costs, as lenders view them as lower-risk borrowers.

This can lead to significant cost savings and improved financial performance.

A well-established credit rating framework can contribute to overall economic growth and stability by fostering a more transparent and efficient financial system.

Credit ratings also promote financial discipline among borrowers, encouraging them to maintain sound financial practices and manage their obligations responsibly.

For emerging markets like Zimbabwe, establishing a robust framework for credit rating can significantly enhance market confidence, attracts foreign investment and promotes economic stability, experts say.-newsday