ZIMBABWE is currently emerging from a decade of severe economic slowdown, and is beginning to look forward with ever increasing confidence.
Opinion by Mthuli Ncube
The country is intent on recovering and rebuilding on the gains it registered after independence, particularly the progress in reducing poverty and inequality, and joblessness.
The economy had been in decline since 1996 and recorded negative economic growth at a time when most African economies were booming.
Disruptions in agriculture due to land reforms explain the decline in agricultural production, while manufacturing went into decline mainly due to a shortage of foreign currency. Hyperinflation, which peaked in 2008, poisoned the investment climate and ravaged the economy.
Alongside this downturn in productivity came a sharp fall in disposable incomes and employment. The decline of employment in low skill sectors like agriculture and construction caused unemployment to rise, especially among low income households, some of whom are still caught in the poverty-trap.
During the recent years, and in response to the more stable and liberalised economic environment, real Gross Domestic Product (GDP) is expected to continue showing positive growth into 2013 and 2014, contrasted to a decline of about 14% in 2008, for instance.
The recovery is underpinned by the restoration of business confidence and anticipated recovery in agriculture and manufacturing. Hyperinflation was brought to a halt; inflation is expected to remain in single digit for the next two years while the United States dollar remains the base currency mostly in use under the multicurrency regime.
1: Zimbabwe – Gross Domestic Product
Recognising the centrality of a sustainable economic pattern, policy-makers should embark on an inclusive-growth agenda where recovery generates improvements in the economic and social conditions of the people of Zimbabwe, especially in job creation and food security.
In the projections to year 2050, estimates for Zimbabwe show that GDP per capita, although relatively low, would reach US$927 in 2050, and US$ 780 in 2030, compared to US$595 in 2010. Over the projection period, real GDP per capita is projected to increase by around 40% to reach US$673 in 2050 compared to US$483 in 2010.
Zimbabwe has experienced rapid increases in poverty and declines in survival indicators. Due to the economic and social conditions in previous decade, the prospects of achieving most of the Millennium Development Goals remain weak. The poverty rate increased significantly and inequality is high.
2: Zimbabwe – Population and 3: Zimbabwe: Life expectancy
During the same time, the HIV/Aids epidemic remains a dominant reproductive health issue. A combination of rampant unemployment, social and political tensions simply provides an environment that fuels the epidemic, with the overall situation making it difficult to mobilise a consistent, effective response to spreading infection. These factors have contributed to the deterioration of Zimbabwe’s human development indicators.
In the decades ahead, the challenge facing Zimbabwe is highlighted by prospective trends in population and demographic indicators, which constitutes essential factors in boosting economic growth.
Projections to year 2050 show that Zimbabwe’s population is expected to reach 20,6 million, compared to a level of 12,6 million in 2010, assuming a moderate slowdown of fertility rates.
In fact, Zimbabwe’s progress on health seems to have stagnated in recent years and provision of key public services also suffered as the government failed to keep critical services such as education, health and infrastructure running.
But, Zimbabwe has experienced a decline in fertility of almost two births per woman over the past two decades, with the fertility rate falling to 3,3 births per woman in 2010, which would reach 1,9 births by 2050. With the HIV/Aids pandemic, life expectancy at birth in the country has fallen to about 50 years. The estimates for decades ahead, show modest progress and by 2050, a baby born in Zimbabwe could expect to live to 65,7 years.
4: Zimbabwe – Under-five, infant mortality rate
Similarly, infant mortality is a critical issue in Zimbabwe. Information for 2010 indicates that infant mortality rate was 53 deaths per 1000 live births, while the under-five mortality rate was 83 per 1000 live births.
Child mortality is consistently lower in urban areas than in rural areas. The impact of the Aids epidemic is also evident in child mortality rates, with more than half of all deaths among children under age five due to Aids.
Meanwhile, on the reproductive health front, Zimbabwe has had one of the most successful family planning programmes in sub-Saharan Africa. In parallel with the demographic trends reported above, under-five mortality rate is expected to decline clearly over the next decades from 83 per 1000 live births in 2010 to 46 in 2030 and then to 32 per 1000 live births by 2050.
5: Zimbabwe – Urban/Rural population
The context of a rapid urbanisation in next decades exposes policy-makers to further pressures in terms of proper urban planning and provision of services to cater for the growing cities.
More investment in water and sanitation services, urban housing, electricity provision, health services, urban transport, and ICT services, among others, is required. Zimbabwe is ranked among the lowest countries in the world on information technology. Compared to other countries in the region, Zimbabwe has been slow in harnessing the commercial and governance potential offered by the new ICT developments.
This can be attributed to a weak investment climate. Growth of the ICT sector in Zimbabwe, although slow, will accelerate, with respect to mobile telephony and through new and innovative services like mobile-banking. The potential for this industry to generate jobs is already evident and policy-makers will embrace such developments, especially if they improve financial-inclusion.
6: Zimbabwe: Communication indicators and 7: Zimbabwe – Electricity consumption
Prospects for Zimbabwe generally look bright for the next few decades to 2050. However, certain policy choices need to be made to keep and sustain the current recovery momentum.
Professor Ncube is Chief Economist and Vice President of the African Development Bank Group. He is former Barbican Bank CEO and Dean of Wits Business School, University of the Witwatersrand, South Africa.