- 2024 economic growth forecast slashed to 2%, down from initial 3.6% projections
- Drought and waning global metal prices worsen food insecurity and growth outlook
- Urgent action needed on land redistribution, farming modernization, and debt restructuring
- SADC region expected to grow by 2.2% in 2024 and 2.7% in 2025
Harare- Zimbabwe's economic growth forecast for 2024 has been slashed to 2%, down from the initial projections of 3.6% a1.6% slash according to the latest economic outlook report by African Development Bank (AFDB). This downward revision is primarily due to the impact of the ongoing drought in the region, which has exacerbated the country's food insecurity concerns.
The Southern Africa region as a whole is expected to grow by 2.2% this year and 2.7% in 2025.
The lowered growth prospects are not only a result of the drought but also the broader global economic challenges, such as the Russia-Ukraine war and the Israel-Hamas conflict, which have disrupted supply chains and driven up imported inflation.
These external shocks have further compounded Zimbabwe's economic woes.
Zimbabwe's economic performance has been volatile in recent years. The country recorded its largest economic growth of 21.45% in 2010 during the dollarization period, slightly lower than the 22.5% growth recorded in the colonial era in 1970.
However, the worst contraction occurred during the hyperinflation crisis in 2008, when the GDP declined by 17.6%.
In the past five years, the economy has experienced both negative and positive growth, with contractions in 2019 (-6%) and 2020 (-7.8%), followed by marginal recoveries in 2021 (8.4%), 2022 (6.5%), and 2023 (5.5%).
To address the current crisis, President Emmerson Mnangagwa has declared the drought a state of disaster and is seeking US$3.3 billion in assistance from donors and cooperating partners to avert the looming hunger crisis.
The United Nations has projected that at least 7 million Zimbabweans are facing starvation, underscoring the urgency of the situation.
Prior to 2000, the agricultural sector accounted for between 9-15% of the country's GDP and 20-33% of export earnings, while also contributing over 60% of raw materials to agro-industries. However, the sector's contribution has stagnated between 7% and 8% of GDP in a decade, with the services sector outpacing it by a significant margin.
To revive the economy, Zimbabwe needs to address several key issues, including land redistribution, modernization of agricultural practices, and debt restructuring.
The fast-track land appropriation programs during the 2000s, which were based on political allegiance rather than merit, have contributed to the decline of the agricultural sector.
Redistributing land to people with the necessary capacity and expertise, and incentivizing the agricultural sector, could help restore Zimbabwe's former status as the "breadbasket of Africa."
The introduction of modern farming technologies, drought-resistant seed varieties, and investment in irrigation facilities are crucial for improving agricultural productivity and resilience to climate change.
Addressing the country's debt challenges, which have resulted in debt distress and the accumulation of external debt arrears, is a prerequisite for Zimbabwe's structural transformation and unlocking access to global financing opportunities.
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