Zimbabwe’s economy is projected to grow by 4.6% this year if it embarks on far-reaching measures to correct macroeconomic stability, the African Development Bank (AfDB) has said.
The economy was expected to contract by 6.5% in 2019 and rebound to grow by 3% this year, according to Finance and Economic Development minister Mthuli Ncube.
GDP will grow by 5.6% in 2021, AfDB said in its flagship report, 2020 African Economic Outlook, released last week.
“Recovery in the agriculture, mining, and tourism sectors will be backed by increased public and private investments,” it said.
AfDB said the high and unsustainable debt, high fiscal deficits, cash shortages, limited foreign exchange, and persistent shortages of essential goods were “hampering meaningful economic recovery”. Development spending and social service provision continue to be constrained, the bank said.
It said as the Zimbabwe dollar depreciates, local creditors lose the value of both their loans and payments on goods and services supplied to government, and external debt service becomes more expensive.
“The economy’s downward spiral has fuelled unemployment and poverty. Heavy debt servicing raises sustainability concerns, with implications for macroeconomic stability and development,” AfDB said.
Launching the report at the bank’s headquarters last week, AfDB president Akinwumi Adesina said while African economies are growing strongly, growth alone cannot meet the needs of the continent’s poorest citizens, because “nobody eats GDP”.
The 2020 African Economic Outlook showed that the continent’s economies are growing well, higher than the global average. The report projected a steady rise in growth in Africa from 3.4% in 2019 to 3.9% in 2020 and 4.1% in 2021.