THE International Monetary Fund (IMF) has projected that Zimbabwe will record the worst gross domestic product (GDP) growth in sub-Saharan Africa this year at -7,1% as the economic environment remains subdued with external and domestic headwinds which caused a slowdown last year persisting.
The negative growth is occurring at a time all of Zimbabwe’s neighbours in the Sadc region are expecting growth, despite challenges.In its 2019 World Economic Outlook report, the IMF said the economic headwinds which rocked Southern Africa in 2018 had dissipated slower than envisaged. GDP is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific period.
Zimbabwe recorded positive GDP growth of 3,5% for 2018 as had been the case in the post-2008 era where the country was annually recording slightly positive GDP growths.
However, in 2019 the country experienced sharp increases in consumer prices buoyed by inflationary pressures mainly arising from the depreciating exchange rate of the local currency.
This was fuelled by adverse market expectations and increases in money supply that caused inflation.Countries which also recorded negative GDP growth include Equatorial Guinea at -4,6%, oil-rich Angola at -0,3% and Namibia at -0,2%.
In Southern Africa, countries which are projected to record he highest GDP growth include Tanzania, whose economy expanded by 7,2% in the second quarter of 2019. Tanzania is projected to have a 5,2% GDP growth rate, while Malawi also recorded a significant jump to 4,5% from 3,2% in 2018.
The IMF projects that South Sudan will record the highest GDP growth at 7,9% closely followed by Rwanda at 7,8% Ghana, which has one of the fastest growing economies, is estimated to have growth of 7,5%, while East African giant Ethiopia’s growth is likely to be at 7,4%.
Economist Prosper Chitambara warned that Zimbabwe’s poor regional economic performance would further dent the country’s chances of attracting investment.
“For this year Zimbabwe is the worst performing economy in sub-Saharan Africa and this puts us in a difficult situation in terms of unlocking foreign direct investment and when you are the worst it also creates a heightened risk of political instability,” Chitambara said.
“We have a highly toxic political environment, which is a self-imposed sanction on its own. So as a country, we really have to tread carefully or end up in a civil uprising.”
Meanwhile, across sub-Saharan Africa, growth is projected to improve from 3,2% in 2019 to 3,6% in 2020.A recovery in oil prices is expected to support growth in oil-exporting countries such as Nigeria and Angola.
However, non-resource intensive economies are expected to grow faster at an average of 6% in 2019 against a 2,5% average for resource intensive economies, while the more diversified economies are expected to perform best in the region.
Southern and East Africa were hit by two devastating cyclones — Idai and Kenneth — in March and April 2019, which took a heavy human toll and severely affected economic activity in the Comoros, Malawi, Zimbabwe and, in particular, Mozambique.