Zimbabwe will register five percent economic growth

Harare Bureau

GLOBAL economic research firm BMI has projected Zimbabwe’s economy to grow by 4,9 percent this year, driven by the strong recovery of agriculture, increased investments in mining and accelerated public infrastructure development.

The projection by the British multinational and unit of UK-headquartered Fitch Solutions, usually very critical of Zimbabwe’s prospects, signals the huge potential for growth in Zimbabwe this year.

Multilateral lenders such as the African Development Bank, the International Monetary Fund and the World Bank have already projected that Zimbabwe would register the same growth this year, between five percent and 6,2 percent.

The IMF agrees with Zimbabwe’s projected six percent growth for 2025, driven by the expected strong recovery in agriculture, which is forecast to rebound by 12,8 percent.

Similarly, the African Development Bank expects Zimbabwe’s economy to rebound from two percent last year to 5,3 percent, again driven by agriculture recovery following favourable rains across the country. BMI’s head of global operational risk research, Ms Chiedza Madzima, said this yesterday at the Confederation of Zimbabwe Industries (CZI) Business and Economic Outlook Symposium for 2025.

Finance and Economic Development Minister Professor Mthuli Ncube forecasts the economy to expand by 6 percent this year, partly driven by agriculture after the El Nino-induced drought weighed down growth last year.

Zimbabwe was projected to have registered slower growth of 2 percent last year after the drought destroyed more than 70 percent of the rain-fed crops.

Agriculture, a key element of Zimbabwe’s economy, contributes at least 12 percent to the country’s gross domestic product.
Growth is expected to pick up pace, one of the fastest in Africa, and driven by the success of the 2024-25 summer cropping season following the good rains received across the country.

According to AfDB, Niger is expected to record the fastest growth in Africa this year at 11,2 percent, followed by Senegal 8,2 percent, Libya 7,9 percent, Rwanda 7,2 percent, Cote d’Ivoire 6,8 percent, Ethiopia 6,7 percent, Benin 6,4 percent, Djibouti 6,2 percent, Tanzania 6,1 percent, Togo 6 percent, and Uganda at 6 percent.

Ms Madzima said Zimbabwe’s economy would also benefit from expected strong gold output, amid bullish prices on the international markets, propelled by the projected 12,8 percent expansion in agricultural output.
Growing investments across the economy, as indicated by the Zimbabwe Investment and Development Agency (Zida), would also drive accelerated growth, she said.

The Chamber of Mines of Zimbabwe is on record saying that planned investments in the mining sector were expected to surpass US$600 million, primarily driven by new lithium projects. Ms Madzima said Zimbabwe’s lithium output was expected to grow by 75 percent this year, while platinum group metals production was seen at 7 percent.

Potential long-term projects like the Zim Cyber City and the Mapinga Mines to Energy Industrial Park into which foreign investors are expected to put US$13 billion, are also expected to drive faster economic growth this year.

She predicted that fixed investment in Zimbabwe would grow by 4,6 percent in 2025.
Ms Madzima noted that the country’s net financial accounts had been on a positive trajectory over the past three years, driven by growing foreign investment coming from the United Arab Emirates (UAE), China and South Africa.

“Improving weather conditions will facilitate a recovery in agriculture, which means recovery in household incomes and electricity supply in the coming quarters, but our growth projection is 4,9 percent, which is below the Government’s projection of six percent.

“Investment will strengthen in 2025 as we have seen strong growth in the issuance of licences by ZIDA, and the Government capex is recovering in line with the budget projections.

“Lithium output is expected to grow by 75 percent this year, PGM’s net is going to be up by seven percent, gold by four percent. Of course, on the agric side, the Government expects agricultural production to peak by around 12,8 percent.
“So all this signals quite a positive trajectory for Zimbabwe’s current account and its net export position,” Ms Madzima said.

Despite positive projections, she noted potential impediments to Zimbabwe’s economy, saying the country’s currency challenges could hinder growth if unchecked.

Authorities have already rolled out several policy measures to stabilise the economy, including adopting tight monetary and fiscal positions, which are already paying dividends amid growing exchange rate stability and falling inflation.
Ms Madzima also said that although Zimbabwe saw a slight increase in foreign currency reserves in 2024, its external position remained susceptible to unforeseen challenges from global economic volatility.

“Foreign currency challenges will continue to be an issue within the country, still tight financial conditions, very high interest rates will keep private consumption growth rather muted, and there is a stronger need for fiscal consolidation. Of course, this will limit a sharp uptick in Government spending,” she said.

World Bank senior country economist for Zimbabwe, Mr Victor Steenbergen, weighed in saying sustaining steady and consistent economic growth was crucial for Zimbabwe to achieve its ambitious goal of transitioning into an upper-middle-income economy by 2030.

He also emphasised that the private sector played a vital role in Zimbabwe’s economy, as it was the primary driver of employment and contribution to GDP.

“Achieving consistent and sustainable economic growth is a key to Zimbabwe’s goal to become an upper-middle-income economy. The role of the private sector is critical in this as it is the largest employer, the largest contributor to GDP, and the largest source of tax revenue.

“. . . despite multiple challenges over the past several decades, Zimbabwe’s private sector demonstrates strong resilience and has significant potential in the short term.

The annual gathering brought together industry leaders, business executives, economic and market analysts, and policymakers to assess the country’s economic situation and the dynamics shaping the business environment in 2025 and beyond.