In 2020, Zimbabwe had a Gross National Income (GNI) per capita of US$1 160, that means the average Zimbabwean made an annual income of US$1 160, earning Zimbabwe the classification of a lower middle-income economy. Under the “Second Republic”, the government tabled a plan to steer Zimbabwe toward an upper middle-income economy by 2030, buttressed by the mantra “Towards a Prosperous and Empowered Upper Middle-Income Society by 2030”.
This translates to a four-fold growth in the Gross Domestic Product from the current outturn, toward a GNI per capita range of between US$4 046 and US$12 535. Meanwhile, it is important to note that over 62% of the 15 million Zim population is below 25 years of age with an earlier Human Development Report having projected the country’s population will soar to 23 million by 2030.
This places a requirement on the GDP growth in order to meet the demands of the ballooning population whose current GDP is circa US$20 billion
Precedence has shown that Zimbabwe is very good at developing state of the art economic blueprints but often lacks the political will to follow through the tabled plans unto fruition. From ZIMPREST to NERP to MERP to STERP then most recently the TSP, Research firm Equity Axis notes that since 1980, Zimbabwe only attained its GDP targets during the STERP era: 2009-2012.
In 2018, the government developed the Transitional Stabilisation Programme (theTSP), to guide the reform process between 2018 and 2020. Zimbabwe’s GDP contracted -6% in 2019 weighed on by a climate change induced drought which swept across southern Africa, compounded by the catastrophic effects of Cyclone Idai which impacted eastern and southern Zimbabwe.
The year 2020 got off to an adverse start as the Covid-19 pandemic took a toll on the regional economy with a series of national lockdowns which impacted regional trade and ultimately the Zimbabwean economy whose GDP contracted -4,1% according to Treasury.
For the record, the TSP envisaged an economic growth rate of 4% for 2018, later revised to 6,3% by Treasury, 9% for 2019 and 9,7% in 2020. The initial 4% 2018 target was fully met while the 2019 and 2020 were as good as the north and south poles in variance. Notwithstanding the GDP per capita targets for 2018, 2019 and 2020 at US$1 720, US$1 883 and US$2 081 respectively were elusive.
As follow up to the TSP, in November 2020, the government launched a new economic blueprint the National Development Strategy 1 (NDS 1): 2021-2025. According to the blueprint, “the overarching goal of the NDS1 is to ensure high, accelerated, inclusive and sustainable economic growth as well as socio-economic transformation and development …”
In the NDS1, the government envisages average GDP growth rates of above 5% over the NDS1 period (2021-2025). Across Sub-Saharan Africa, growth in 2021 is projected at 3,1%, following an estimated downturn of -3,0% in 2020 on the back of the Covid-19 pandemic.
The government’s 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 upgraded its projection to 6% from an earlier 3% prediction.
To achieve the envisaged growth targets, the government purports to grow the key sectors of the economy which are mining, tourism, agriculture and manufacturing.
My objective with this new series of writings on Zimbabwe’s economic plans is to highlight Treasury’s plans vis-a-vis the country’s potential as well as provide a yardstick against which the government’s performance under the “New Dispensation” can be assessed over time.
Having started with a very basic GDP overview, in the coming instalments, we will assess the macro-economic framework of the 343-page policy document, the key growth areas, the strategies on the table and interrogate the government’s commitment to its own economic plans.
Mabunda is an analyst and TV anchor at Equity Axis, a leading financial research firm in Zimbabwe. — email@example.com