Zimbabwe’s growth is projected to slow down this year in the face of policy inconsistencies and political uncertainty despite a projected growth in the entire continent, according to a latest regional outlook.
“The subdued growth reflects the challenges facing the economy, including limited resources and the high cost of capital; inconsistencies, especially with respect to economic empowerment and indigenisation regulations; dilapidated infrastructure; obsolete technologies; frequent breakdown of machinery and power and water shortages,” an African Economic Outlook 2012 report said yesterday.
The report, however, said the Southern African country was expected to rebound in 2013.
The downside risks, the report said, were “further exacerbated by the disputes among the government partners about the new constitution, the national referendum to adopt it and pending elections”.
According to the report, real gross domestic product (GDP) is expected to decelerate to 4,4% this year from 6,8% in 2011.
Finance minister Tendai Biti has already announced he would review growth projections in his mid-term Fiscal Policy review next month amid indications the 9,3% growth for this year is impossible under the prevailing conditions.
Next year, the economy is expected to improve to 5,5% buoyed by activities in the agricultural, mining, manufacturing and transport sectors.
In the outlook, the report said inflation would rise, but remain in single digits in 2012 and 2013 influenced by the US$/ZAR exchange rates, inflation developments in South Africa, international oil prices and local utility charges.
The 11th edition of the African Economic Outlook report painted a rosy picture for the continent with growth expected to be 4,5% this year and 4,8% in 2013 due to the recovery of North African economies. After the rebound from the world crisis of 2009, the African economic growth was a victim of the Arab Spring that ousted repressive governments in Tunisia, Egypt and Libya decelerating to 3,4% last year from 5% recorded in 2010.
AfDB president Donald Kaberuka cautioned Africa against excessive exuberance, adding the challenge was to craft policies that transform the inherent wealth on the continent. He said countries should move from economic growth to economic transformation through the exportation of sophisticated technology.
Kaberuka said such transformation was possible through investing in the youths.