- Revision of agricultural projections imminent
- 60% of total population facing starvation
- Maize imports to rise to 1 million tonnes
Harare- As the macroeconomic climate worsens in Zimbabwe, fears of sustained drought further dampen the outlook.
There are mixed projections on the short-term economic outlook, but most of the positive forecasts are now way too outdated. The most relied upon projections by IMF and World Bank are as at November 2019, which was before the rain season kicked off.
These projections pointed to a positive GDP growth for 2020 and was premised on agriculture rebound as well as mining sector reposition. The projections also assumed that demand would recover after a tight austerity budget in 2019.
However, agriculture projections will have to be revised and rightly so, most bodies do the revisions 3 to 4 times in the course of the year in question. So it is quite predictable that IMF and World bank will revise their projections on Zimbabwe GDP forecast anytime soon.
It is now apparent that drought will recur in 2020 and indications are that it may be one of the worst in a very long time.
Already 8 million Zimbabweans face starvation in 2019 and 2020 which accounts for 60% of the total population. Government had targeted to import 700 000 tonnes in 2019 after another drought, which was expected to cover for the shortfall up until harvest in 2020.
According to Equity Axis’ analysts it is now likely that agriculture will further roll back losing about 10% against an 8% decline in 2019. Maize imports are seen hitting 1 million tonnes mark, from 700 thousand in 2019-2020.
If these deficit levels are to be experienced, the analysts see the import bill swelling to an average of about circa $20 million a month in maize imports before factoring aid.
Government will therefore gobble over half of the total driving demand for forex trading even higher. This notwithstanding competing demands from other food imports such as wheat, rice and soya.
Government’s defiance on subsidy means the net cost gets to be accrued via the national budget, risking further implosion of the shaky 2020 budget.
Equity Axis News