MARRAKECH, MOROCCO- ZIMBABWE’S real Gross Domestic Product (GDP) is expected to improve marginally this year from a dip in 2012 on the back of improvements in mining and agriculture, according to a new report released on Monday.
REPORT BY NDAMU SANDU
The African Economic Outlook report — a report jointly produced by the African Development Bank (AfDB), the Organisation for Economic Co-operation and Development, United Nations Development Programme and the Economic Commission for Africa — notes that the country’s economic growth had tapered off to 4,4% last year from 10,6% recorded in 2011.
It said the deceleration in growth was reflective of “a fragile recovery owing largely to inherent political and economic uncertainties, a high debt overhang and the deteriorating infrastructure.
“It (real gross domestic product) is projected to improve marginally to 5% in 2013. The projected improvement in 2013 will be underpinned by improvements in mining and agriculture,” the report said.
The report said that key challenges inhibiting Zimbabwe from attaining good ranking on the doing-business-score were “policy instability, lack of funding, corruption, excessive or poorly functioning government bureaucracy and inadequate infrastructure”.
The report said the Zimbabwean economy continued to experience structural challenges emanating from the limited sources and high cost of capital, uncertainties arising from policy inconsistencies, especially with respect to economic empowerment and indigenisation regulations, dilapidated infrastructure and obsolete technologies.
Banks are constrained to offer long-term loans due to the short-term nature of deposits. Reserve Bank of Zimbabwe governor Gideon Gono and Youth Development, Indigenisation and Empowerment minister Saviour Kasukuwere are at odds over the implementation of the empowerment policy on the banking sector.
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Kasukuwere says the sector should be indigenised as per law. Gono argues that the one-size fits all approach does not work especially when dealing with the delicate banking sector — the nerve centre of the economy.
The report said Zimbabwe’s mining sector had made a significant contribution to the economic turnaround since 2009.
“The average share of mining to GDP grew from an average of 10,2% in the 1990s to an average of 16,9% from 2009 onward. Mineral exports, on the other hand, rose by about 230% over the 2009-11 period, making mining the leading export sector,” the African Economic Outlook report said.
Statistics showed that mineral exports have been increasing, accounting for 47% of total exports in 2011.
Last year, mineral exports accounted for 64% of total exports.
Despite the increase in mineral exports, the report said, little had trickled into Treasury coffers.
“There is, however, a lack of transparency and accountability in the allocation of mining rights, as well as in the distribution and use of revenue from mining. Hence, mining revenues are a tiny fraction of total production,” it said.
Finance minister Tendai Biti has in the past accused senior Zanu PF officials and members of the security forces of looting diamonds from Marange fields with little sale proceeds trickling into Treasury.
