Online Reporter
Oliver Kazunga
Senior Reporter
THE Southern African Development Community (SADC) economy is showing signs of resilience, but senior officials have warned that the recovery remains fragile, uneven, and increasingly exposed to rising fiscal pressures and global shocks.
Addressing the Committee of Ministers of Finance and Investment, and the Peer Review Panel in Harare today, SADC executive secretary Mr Elias Magosi said the region had recorded “modest improvements” in key indicators, with average real GDP growth rising to 4,4 percent in 2025, up from the previous year.
Financial inclusion also improved to 79 percent of adults, while cross-border transactions on the regional real-time gross settlement system surged by 18 percent, reflecting deepening financial integration.
Foreign direct investment rebounded to US$11 billion, and macroeconomic convergence showed slight improvement.
However, officials cautioned that these gains mask underlying vulnerabilities. Mr Magosi warned that the region’s fiscal deficit widened sharply from 2,3 percent of GDP in 2024 to 3,8 percent in 2025, underscoring weakening public finances across several member states.
He said growth remained “narrow and uneven,” driven by only a few economies rather than broad-based expansion.
“This deterioration in public finance underscores the fragility of the region’s recovery and the limited fiscal space available for sustained transformation,” Mr Magosi said.
The SADC secretariat also raised concerns over tightening global financial conditions, rising debt vulnerabilities, and disruptions in trade and investment flows.
Officials further noted that declining external aid—estimated to have contracted by 16 to 18 percent globally—was compounding fiscal strain across the region.
Finance ministers warned that higher borrowing costs and persistent inflationary pressures could force difficult policy adjustments, particularly in countries with large financing needs.
Despite the challenges, delegates said the shifting global environment also presented an opportunity for SADC to reposition itself as a more integrated production and investment hub, anchored on industrialisation, mineral value addition, and stronger regional value chains.
The officials stressed that without deeper structural reforms, improved policy coordination, and accelerated integration, the region’s current gains risked remaining unsustainable in the medium term.
