Stunted economic growth hits industry


ZIMBABWE’S industry has been forced to re-strategise and produce competitive products to survive economic headwinds.

The Finance ministry pegged Zimbabwe’s economic growth forecast at 5,5% in November last year before reducing it to 4,6% in July this year.  Last month, it said economic growth would be below 4,6%.

The World Bank last week further cut the country’s economic growth projection from 3,5% to 3%.

Market analysts Tatenda Andrew Mabhande said the downward projection would affect businesses.

“The recent downward revision of Zimbabwe’s economic growth estimates by the World Bank speaks to both exogenous and endogenous risks that still exist in the economy. As the downside risks such as power, liquidity and forex shortages commingled with constrained consumer spending continue to outweigh the upside, business performance in Zimbabwe will remain subdued,” Mabhande said.

Zimbabwe National Chamber of Commerce chief executive officer Christopher Mugaga said: “The economic growth we have witnessed has been on a macro level whether it’s 4% or 5%, and this has translated into nothing at micro level. What I am saying is that there has been no change in terms of job creation or spending power.”

Urging the country to re-strategise and stop its heavy dependence on imports, he said: “At 3% or 4% growth just doesn’t make sense, we require at least 7% to double digit growth so that it makes sense.”

Economist Prosper Chitambara said whenever agriculture sneezed, manufacturing would catch a cold.

“For this year, agriculture did not perform very well with production way below initial projections. This then affected the rest of the economy.  Agriculture still remains one of the mainstays of the economy and any reduction in agricultural production obviously affects overall economic growth,” Chitambara said.

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