HARARE – Zimbabwe remains within range of Africa’s forecast average economic growth rate albeit the projected slowdown in 2024, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has said.
This comes as the continent is set to remain the second-fastest-growing region after Asia.
According to the African Development Bank (AfDB)’s latest Macroeconomic Performance and Outlook (MEO) report on the continent, the region will account for eleven of the world’s 20 fastest-growing economies in 2024.
Up to 41 countries across the continent will in 2024, achieve an economic growth rate of 3,8 percent, and in 13 of them, growth will be more than 1 percentage point higher than in 2023.
While Zimbabwe faces a host of challenges among them bad weather affecting agriculture production and therefore weighing on the overall economic growth rate, Professor Ncube highlighted the Government was taking measures to offset the challenges and pave the way for a sound economic policy framework conducive for growth.
Zimbabwe’s economy is estimated to have grown by 5,3 percent last year while the impact of El Nino climate conditions is expected to slowdown the agriculture-driven economy’s growth to 3,2 percent in 2024.
Professor Ncube was quoted in the AfDB’s latest report describing the bank’s outlook perspective as being “on point” and consistent with the reality in Zimbabwe, describing it as useful for economic planning across Africa.
He also urged the AfDB to continue its thought leadership to help policymakers continue to build resilience to withstand shocks and drive growth.
“Zimbabwe expects slower growth due to climate shocks in the region. Southern African countries depend on agriculture for economic growth, so climate-proofing agriculture is key,” he said.
According to the Treasury, Zimbabwe’s total public and publicly guaranteed (PPG) debt amounted to US$17,7 billion, as at the end of September 2023, made up of US$12,7 billion external debt and US$5 billion domestic debt.
The World Bank opines that exiting the debt overhang would require sustained strong growth, access to concessional financing and debt relief to expunge. But Zimbabwe is not alone in this, as the challenge is prevalent across the region.
“We are in talks with creditors to restructure its (Zimbabwe’s) debt, which is slowing economic growth. Internally, the country will focus on economic and governance reforms and reforms around property rights to increase agricultural production,” said Professor Ncube.
Overall, real gross domestic product (GDP) growth for the continent is expected to average 3,8 percent and 4,2 percent in 2024 and 2025, respectively. This is higher than projected global averages of 2,9 percent and 3,2 percent, the report said.
According to the AfDB, the top 11 African countries projected to experience the strongest economic performance are Niger 11,2 percent, Senegal 8,2 percent, Libya 7,9 percent, Rwanda 7,2 percent, Cote d’Ivoire 6,8 percent, Ethiopia 6,7 percent, Benin 6,4 percent, Djibouti 6,2 percent, Tanzania 6,1, Togo 6 percent, and Uganda at 6 percent.
“Despite the challenging global and regional economic environment, 15 African countries have posted output expansions of more than 5 percent,” AfDB Group president Dr Akinwumi Adesina said, calling for larger pools of financing and several policy interventions to further boost Africa’s growth.
Africa’s Macroeconomic Performance and Outlook, a biannual publication released in the first and third quarters of each year, complements the bank’s existing African Economic Outlook (AEO), which focuses on key emerging policy issues relevant to the continent’s development.
The MEO report provides an up-to-date evidence-based assessment of the continent’s recent macroeconomic performance and short-to-medium-term outlook amid dynamic global economic developments.
The latest report is calling for cautious optimism given the challenges posed by global and regional risks. These risks include rising geopolitical tensions, increased regional conflicts, and political instability—all of which could disrupt trade and investment flows, and perpetuate inflationary pressures.
Dr Adesina emphasised that fiscal deficits have improved, as faster-than-expected recovery from the pandemic helped shore up revenue.
“This has led to a stabilisation of the average fiscal deficit at 4,9 percent in 2023, like 2022, but significantly less than the 6,9 percent average fiscal deficit of 2020. The stabilisation is also due to the fiscal consolidation measures, especially in countries with elevated risks of debt distress,” he said.
