A LEADING emerging markets economist says Zimbabwe’s economy has the potential to grow to the size of Singapore by 2050 if it guarantees property rights, crafts effective agriculture and currency policies.
Report by Mernat Mafirakurewa
Zimbabwe’s gross domestic product (GDP) is estimated at $9 billion while of of Singapore is close to $300 billion.
Singapore has a highly developed and successful free-market economy.
It enjoys a remarkably open and corruption-free environment, stable prices and a per capita GDP higher than that of most developed countries.
Speaking at the AMH Conversations in Harare yesterday, ReNaissance Capital global chief economist Charles Robertson said the last couple of decades witnessed an emergence of responsible management by most governments in Africa resulting in high economic growth rates. Alpha Media Holdings (AMH) are the publishers of NewsDay, The Standard and Zimbabwe Independent. AMH Conversations offers a platform that brings to Zimbabwe international experts to lead discussions on global, social, economic and political developments.
Robertson, author of the book Fastest Billion: The Story Behind Africa’s Economic Revolution, said most governments had reduced budget deficits from high levels of 80% of GDP to below 40%.
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He said African economies had an opportunity to learn from the Indian experiences, which at one time went through the same challenges being faced by the continent. “Let’s just assume that Zimbabwe does no better than India did since 1990s, what happens to the GDP?
“In the next four to five years, it will become as big as Mozambique’s, as big as Zambia’s by 2022, as big as Tunisia by 2031 — one of the most successful African economies,” Robertson said. “By 2040, you will be as big as Angola is today, by 2050 you will be as big as Singapore, Egypt or Greece. This is assuming you do not do better than India.”
He, however, said the country’s sovereign debt at just over 100% of the GDP and its poor relations with multilateral institutions was making it difficult to attract investors.
“The difficulty of getting money into this economy is that you have got to convince investors that it is a safe place to invest in, in the long term,” Robertson said.
“If I look at Zimbabwe’s debt, it’s still very high because it has not been able to deal with multilateral lenders like other countries have done. “If debt levels are high, credit rating is low, investors are cautious.
“Investors have a choice, you don’t have to come to Zimbabwe. You can go to another country and say: Am I being safer investing in this country than Zimbabwe? And that is exactly what is happening.”
He projected a 17-fold increase in air passenger numbers on the African continent in the next decade and a doubling of car sales within the same period.
“There will soon be traffic jams in Harare,” Robertson said. He added that in the next 30-40 years, Zimbabwe’s economy would be bigger than that of most countries surrounding it.
He, however, said Zimbabwe was not doing well in the ease-of-doing-business index as indicated by the World Bank report, a key reform needed if the country is to attract new investors.
Robertson said regional integration in terms of trade of goods and services was the way to go, as it resulted in an enlarged market size.
