The World Bank says Zimbabwe’s economy grew by 5,1 percent in 2021, a significantly higher estimate than the bank’s earlier projection 3,9 percent, a position which affirms the economy’s strong growth potential despite the Covid-19 pandemic.
Zimbabwe’s resilient economy is firmly on a recovery path mainly driven by higher agricultural output after good rains last year, improved capacity utilisation in industry, massive public infrastructure projects across the country and stabilising prices and exchange rates following a cocktail of effective policy interventions.
The growth estimate for Zimbabwe’s economy from the Bretton Woods institution is, however, more than a couple of percentage points lower than the Government’s more bullish forecast, which predicted an expansion of 7,8 percent in 2021.
Nonetheless, the upgrade to 5,1 percent estimate represents a huge seal of approval for the growth potential of Zimbabwe’s economy going forward, especially coming from a conservative institution such as the World Bank.
Notably though, this comes after a fellow Bretton Woods institution, the International Monetary Fund late last year forecast that Zimbabwe’s economy would grow by a weighty six percent in 2021.
According to the latest World Bank’s Global Economic Prospects report, Zimbabwe’s Gross Domestic Product growth rate will remain positive at 4,3 percent in 2022 before reaching 4,2 percent in 2023.
Finance and Economic Development Minister Mthuli Ncube, is on record saying Zimbabwe’s economy is on the right path towards President Mnangagwa’s vision of an empowered, prosperous upper middle income society by 2030, largely anchored on strong mining sector growth.
Vision 2030, fundamentally, seeks to transform Zimbabwe to an upper middle income economy, with a per capita Gross National Income of over US$5 000 in real terms.
According to Minister Ncube, the journey towards Vision 2030 started with the implementation of the Transitional Stabilisation Programme (TSP), which was launched in October 2018.
To that end, a number of notable achievements were recorded, including the restoration of external and internal macro-economic stability and domestic currency.
Informed by strong economic fundamentals mid-last year, Minister Ncube reviewed upwards the economic growth rate when he presented his mid-term budget review to 7,8 percent from his initial 2021 growth projection of 7,4 percent.
According to the World Bank Zimbabwe Economic Update (ZEU) report launched last year, is expected to strengthen further in 2022 as the deployment of vaccines intensified and implementation of National Development Strategy 1 (2021-2025) bears fruit.
The ZEU report issued by the World Bank last year perspective on macroeconomic and poverty developments and discussed ways to strengthen public service delivery in key sectors.
Mukami Kariuki, who headed the World Bank in Zimbabwe, said the economy could recover faster depending on how the pandemic and regional economies perform.
She said Zimbabwe’s economy was expected to grow faster than its neighbours and by comparison, the average growth rate for sub-Saharan Africa in 2021 stands at far much lower rate of 2,8 percent.
The bank last year praised the Government for being able to tackle perennial national budget deficits of the past and controls on reserve money growth, as a way to contain inflationary pressures.
Envisaged GDP growth, the bank noted, was attributable to the bumper agricultural output in 2021, increased mining and electricity production, buoyant construction and manufacturing activity and increased infrastructure investment.
According to the global financier, the country’s “swift response to the Covid-19 pandemic, including through containment measures and support to vulnerable households and firms, helped mitigate the full adverse impact of the pandemic.