Sigh of economic relief on positive agric stats

BY EBEN MABUNDA

ZIMBABWE is a landlocked southern African country with a total land area of over 39 million hectares, with 85,4% of the hectarage used for agricultural purposes. The remainder has been reserved for national parks and wildlife and urban settlements.

Agriculture is the heart-beat of Zimbabwe’s economy providing employment and income for 60-70% of the population. The sector traditionally supplies 60% of the raw materials required by the industrial sector and contributes 40% of the nation’s aggregate export earnings. It, therefore, follows that movements in the sector have a trickle-down effect on the economic outturn of the nation. Official stats show Zimbabwe’s GDP slumped 6% and 4,1% in 2019 and 2020 respectively steered by the El Nino induced droughts, the effects of the Cyclone Idai, and Covid-19 among other factors. GDP projections for 2021 are somewhat bullish on the back of a rebound in, inter alia, a recovery in agricultural activity. The government projects a 7,4% GDP growth, the World Bank recently revised its forecast from 2,9% to 3,9% while Equity Axis has stuck to its initial projection of 3%. The IMF upgrades Zim 2021 GDP growth to 6% from the 3,1% it projected in April. The April  projection was a downgrade from 4,3% it initially predicted back in Oct 2020. Zimbabwe’s first round of crop and livestock assessment released by Treasury has shown a 23% increase in crops planted during the summer of 2020, on the back of good rains experienced in the first quarter of the season, with maize accounting for 55% of the total increase. However, there was a drop in the area planted for finger millet and rice as farmers shifted focus towards the production of high-yielding crops such as maize and sorghum, given an anticipated good rainfall season.

Meanwhile, the area planted for tobacco increased by 7% to 125 177 ha compared to 117 049 ha planted in the prior comparable season, reflecting positive expectations in tobacco prices and good rains. As it stands average tobacco prices range at around US$2,70 against US$2,50 of the previous season, the increase in prices is justified by the quality of the grades harvested this season which were aided by the good rains experienced this year. In the animal rearing sector, the national cattle numbers increased from 5,4 million in 2020 to 5,5 million this year, similarly, sheep numbers are expected to increase from 547 696 in 2020 to 697 910 in 2021, with goats increasing from 3,9 million to 4 million in 2020 and 2021, respectively. Dipping also improved during the period under review as the government intervened by availing tick grease to farmers for free. Meanwhile, first-quarter slaughters at 62 929 constitute a 16% increase from the 2020 first-quarter levels of 54 113 slaughters. However, in comparison to the Q420, formal slaughters decreased by 10% from 69 798.

In the dairy sector, milk production for Q121 dropped from both the previous year’s Q1 and Q4 production of 19,2 million litres and 19,6 million litres, respectively, to 17,8 million litres.

Equity Axis Analyst Ntandokayise Nsikane accounts for the southward movement in dairy thus: “This drop-in milk production is partly attributed to the challenges of high costs of vaccines and other costs of production. This was compounded by the shortage of good quality breeding cows and heifers on the market.”

Notably, the agricultural sector is responsible for feeding the nation and providing livelihoods to 67% of the country’s population in rural areas and is also pivotal in enhancing the recovery and growth of the economy.  However, food insecurity has been consistently growing across the nation. Between 2015 and 2020, the proportion of food insecurity in Zimbabwe’s rural population ranged between 30% and 59%, while urban vulnerability was also on the rise reaching 30% or 2,2 million people by 2020. Furthermore, the proportion of chronically food-insecure people in rural and urban communities surged from approximately 500 000 people in 2015 to about 1,7 million people in 2020.

The government’s National Development Strategy 1 economic blueprint seeks to improve food self-sufficiency and to regain the country’s regional breadbasket status. The thrust of this blueprint is to increase food self-sufficiency from the current level of 45% to 100% in the medium term and reduce food insecurity from the current peak of 59% in 2020 to less than 10% by 2025.

Mabunda is an analyst and TV anchor at Equity Axis, a leading financial research firm in Zimbabwe. — ebenm@equityaxis