Zimbabwe’s economy may, within two years, be overtaken by Zambia and Mozambique due to lack of significant investment, Finance minister Tendai Biti has said.
Debating on the Finance Bill which sailed through both Houses of Parliament on Wednesday, the minister told the Senate that investors were being scared away from Zimbabwe by political instability and indigenisation policies.
“South Africa’s gross domestic product (GDP) is over $280 billion compared to ours of $9 billion.
Angola’s GDP is $120 billion while both Zambia and Tanzania are in excess of $20 billion and it was not so long ago that Zimbabwe’s economy was double the GDP of Zambia,” said Biti.
Biti said the 2012 United Nations Conference on Trade and Development report on investment says investment figures obtained in 2011 by Zambia and Mozambique were between $2 billion and $2,9 billion (respectively).
Mozambique had this year received a single investment of $7 billion from two Brazilian companies which invested in a coal project in Tete Province.
He said the investment was going to see a new freeway, a new railway line, and a new airport in Tete.
“Mozambique has also discovered hydrocarbons or oil and an Italian company is going to invest $50 billion in the next few years and what it means is that these countries are going to outsprint us from their current levels of development,” Biti said.
He said while these countries got investors,
Zimbabwe’s level of investment for the same period was less than $400 million.
“The biggest problem is the continuous political noise, particularly the discord in the inclusive government. The issue of politics is putting a premium to this country.
“A normal situation should be that wages should be at least 30% of our expenditure, leaving 70% to capital and social delivery and there should be at least 8% of GDP,” he said.
He said the net result of this was inability to take care of institutions like schools where infrastructure was seriously dilapidated.
“I have been to Fafi School in Zhombe where the pole-and-dagga school houses schoolchildren during the day while in the evening it houses cattle from the village communities,” Biti said.