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Oliver Kazunga
Senior Business Reporter
THE International Monetary Fund (IMF) has listed Zimbabwe as one of the fastest growing economies in the Southern African Development Community as the southern African nation registered a Gross Domestic Product growth rate of 6,2 percent last year.
This comes as the multilateral financial institution also revised Zimbabwe’s economic growth rate to 4,1 percent from its earlier forecast this year of 2,5 percent.
The IMF forecasts that Zimbabwe will be the 6th fastest growing economy registering 4,1 percent, contracting from last year’s 6,2 percent while Mozambique would be the fastest growing economy at 7 percent followed by DRC with 6,7 percent — Tanzania 5,2 percent — Mauritius 5,1 percent and Seychelles 4,2 percent.
At the United Nations General Assembly in New York last month, President Mnangagwa said Zimbabwe’s economy was the fastest growing in southern Africa on the back of “unprecedented development and economic milestones”.
“We are recording unprecedented development and economic milestones. For the last three years, our country has been one of the fastest in our southern Africa region.
“Further, Zimbabwe is prioritising the eradication of poverty and improving the quality of life,” he said.
Since the coming into power of the Second Republic in November 2017 led by President Mnangagwa, Zimbabwe has achieved significant milestones in key economic sectors such as mining and agriculture.
According to official figures from the Treasury, Zimbabwe has been on a sustained economic growth trajectory recording gross domestic product growth rates of 8,5 percent in 2021, and 6,5 percent last year.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube is on record saying there was no doubt that Zimbabwe, would this year, register a GDP growth rate of at least 5,3 percent.
In its economic outlook for October 2023, the IMF indicated that last year the Democratic Republic of Congo (DRC) and Seychelles had the highest GDP growth rates in southern Africa, 8,9 percent for both countries, followed by Mauritius with 8,7 percent and Zimbabwe 6,2 percent.
Last year, neighbouring Botswana registered a 5,8 percent in GDP growth while Zambia and Tanzania both registered a 4,7 percent expansion, Namibia 4,6 percent, Mozambique 4,2 percent, Madagascar 4 percent, Eswatini 3,6 percent, Angola 3 percent, Comoros 2,6 percent and Lesotho 2,1 percent.
South Africa, which is among the top three economies in Africa, recorded the second lowest growth rate of GDP at 1,9 percent while Malawi had the lowest at 0,8 percent.
Economic commentator Mr George Nhepera said last year’s projections by the IMF for many Sadc countries including Zimbabwe were much higher compared to the 2023 projection.
This, he said, is due to the continued downside risks such as lack of energy and electricity power to support the expected growth of the various economies.
“Inflation has remained a challenge both in Zimbabwe and South Africa, affecting the prospect of economic growth including the already anticipated EI- Nino weather forecast which may affect agriculture.
“In Zimbabwe, our expected growth of 4,1 percent could be surpassed if we quickly put in place a credible policy around the exchange rate framework that goes beyond 2025, when the legislated multiple currency system is expected to expire,” he said.
“Let’s have a more than 10-year guaranteed exchange rate framework that has the capacity to boost economic growth of double digits per year which is associated with massive job creation and significant investment inflows from the international market.”
Mr Nhepera said a solid exchange rate framework would allow banks to offer long-term loans denominated in United States dollar and Zimbabwe dollar including reviving the bond market for the issuance of Government and corporate bonds to support long-term projects.
“The current framework of supporting government projects of infrastructure cannot be sustained with taxes from the government or unbudgeted expenditure which is both inflationary and a direct source of increased money supply in the money market.
Long-term Government bonds are therefore a credible solution.”
The IMF has predicted that Madagascar will be the 7th fastest growing economy in Sadc this year followed by Botswana at 3,8 percent, Zambia 3,6 percent, Eswatini 3,1 percent, the Comoros 3 percent, Namibia 2,8 percent, Lesotho 2,1 percent, Malawi 1,7 percent, Angola 1,3 percent while South Africa would anchor the region with 0,9 percent.
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