Zimbabwe’s Economy On Recovery Trajectory

by | Jun 11, 2021 | Business, International, Local News | 0 comments


Nevanji Munyaradzi Chiondegwa

After a two-year Covid-19 induced recession, The World Bank has said Zimbabwe’s economy is set for a rebound with Gross Domestic Product (GDP) growth projected to reach 3.9 percent in 2021.

The positive news was contained in The World Bank Country Report.

To add another feather in the cap for President Emerson Dambudzo Mnangagwa’s Agricultural recovery drive, the World Bank said economic growth this year will be led by recovery in agricultural productivity as businesses adjust to limitations brought about by the corona virus pandemic.

The other reason for the growth is the success of the fiscal and monetary policies which has led to inflation slowing down amid projections it will slow down further.

The report further says economic recovery is expected to strengthen further in 2022 with GDP growth at 5.1 per a cent as the deployment of vaccines intensifies and implementation of National Development Strategy 1 (2021-2025), the successor to the Transitional Stabilisation Programme bears fruits.

Additional report observations and recommendations in the Zimbabwe country report for the authorities include;

•Domestic policies which support price stability and the optimal use of public resources are key, especially given large financing needs to prevent a deterioration in human capital.

•Reallocate spending from inefficient, distorted subsidies to targeted measures that limit the toll of the pandemic, provide social safety nets and food security, and prevent a learning crisis that risks undercutting long-term growth and productivity.

•Adopted policies should take into account the country’s limited fiscal space and the significant financing required to arrest further deterioration of social service delivery

•As it is currently facing tight public finances and limited recourse to external financing, Zimbabwe will need to rely heavily on reallocating domestic resources to optimal public uses, mobilize humanitarian support to prevent increasing fragility and leverage private financing where possible to stimulate growth

Significant financing will be required to restore service delivery to the levels of the recent past as the gap has widened sharply over the past two years. In this regard, new approaches to working with the private sector and development partners are needed to leverage financing and skills. Such approaches, coupled with a more responsive and accountable public sector, would enable a more rapid improvement in service delivery.