Zimbabwe’s economy will grow by 1,3% this year, spurred by a growth in sectors such as agriculture, a new report has shown.
BY NDAMU SANDU IN AHMEDABAD, India
According to the African Economic Outlook 2017 report launched here yesterday, Zimbabwe’s gross domestic product (GDP) was projected to have more than halved to 0,5% last year from 1,1% in 2015 due to strong economic headwinds.
“Zimbabwe’s GDP growth is projected to increase by 1,3% in 2017 spurred mainly by agriculture in view of favourable rains, tourism, manufacturing, construction and financial sectors,” it said.
The report, which was themed Entrepreneurship and Industrialisation, was jointly produced by the African Development Bank (AfDB), the Organisation for Economic Cooperation and Development and the United Nations Development Programme.
In 2018, however, economic growth is expected to decelerate to 0,9%.
In his 2017 National Budget, Finance minister Patrick Chinamasa projected a growth rate of 1,7% this year driven by agriculture and mining.
The World Bank has projected an economic growth of 3,8% in 2017.
The African Economic Outlook 2017 report said Zimbabwe continued experiencing foreign currency shortages required to fund critical inputs in most sectors of the economy and was beset by the high cost of production that has eroded the competitiveness of the economy.
It said inflation was expected to remain positive in 2017, “hovering between 1% and 2% on the back of an anticipated increase in international oil prices and economic recovery”.
It warned that the external position was projected to remain under severe pressure in the medium to long-term due to weak exports.
“The external sector still remains a threat to a strong recovery in the near term largely due to weak exports leading to unsustainable trade deficit, although imports have been coming down,” it said.
Imports declined by 11,7% in 2016 to $5,35 billion after the government rolled import restriction on 43 products that have local equivalents.
The report projected the continent’s economic growth of 3,4% in 2017 and 4,3% in 2018.
Growth slowed to 2,2% in 2016 from 3,4% in 2015 due to low commodity prices, weak global recovery and adverse weather conditions, which impacted on agriculture production in some regions.
Abebe Shimeles, a senior AfDB official, said the continent remained resilient despite facing economic headwinds in the last two years.
“. . . we firmly believe the continent remains resilient, with non-resource dependent economies sustaining higher growth for a much longer spell,” Shimeles said.
“With dynamic private sectors, entrepreneurial spirit and vast resources, Africa has the potential to grow even faster and more inclusively.”
AfDB president, Akinwumi Adesina said the growth projections were testament that Africa was keeping its head above the waters in a challenging global environment.
“Prospects for Africa are great. People call me Africa’s optimist-in-chief,” he said.