WITH Covid-19 continuing to wreak havoc on the economy, Zimbabwe may struggle to achieve even 0,5% gross domestic product (GDP) growth this year, the Zimbabwe National Chamber of Commerce (ZNCC) said this week, adding companies have had enough of lockdowns.
Zimbabwe has imposed several levels of lockdowns since March last year to contain the spread of Covid-19.
But these have further hurt an already struggling economy.
In its latest report titled: “2020 Achievements in Retrospect”, the ZNCC said Zimbabwe had suffered immensely from Covid-19 and the 7,4% growth projection announced by Finance minister Mthuli Ncube in December 2020 would be hard to achieve.
Central bank governor John Mangudya stuck to this figure last week, when he announced the monetary policy statement.
“We will be thankful to the Almighty if we are to post even a +0,5% GDP growth for 2021, with a negative 6% to 9% being our forecast before the economy moves out of the hole in the second half of 2022,” the report said.
“The services sector is becoming the major driver of the Zimbabwean economy and the hard lockdowns we continue experiencing will not do favour to an economy with almost 61% concentration of the services sector. We have had enough of lockdowns and we have to graduate to smart and targeted lockdowns with all formal businesses expected to remain open whilst adhering to guidelines of Covid-19,” said the ZNCC.
It said the success of politicians will be measured by their ability to turn around the economy.
It said total profits for the top 10 listed counters on Zimbabwe Stock Exchange might have surpassed analysts’ expectations, but it is not translating into job creation.
“Corporate balance sheets are under strain,” said the ZNCC.
“This could hold back investment and lead to an eventual rise in defaults. The mood in the boardrooms of SMEs is foul. Sentiment has stalled since the beginning of the year due to increased concerns about an unclear lockdown pattern. The gloomy outlook, the most pessimistic in 12 years may be explained by the fact that 25% of SMEs believe they won’t come back to normalcy after the pandemic or will change their business models to become traders rather than manufacturers for some. With an exchange rate dictated by the market for essential goods, it remains a mystery to try placing a prediction on Zimbabwe’s exchange rate, but one thing for sure the local unit can only continue depreciating albeit at a slow pace not due to the presumed threat a free exchange rate pose to a nation with a zero forex reserve balance,” the ZNCC said.
“Going forward, we expect an elevated demand for forex as the black market is expected to fund at least 60% of market needs for forex,” it said.