THE World Bank sees Zimbabwe’s economy growing by a modest 2.9% in 2021, against the government’s bullish projections of 7.4% as the Covid-19 pandemic slows down economic activity in the sub-Saharan region.
Zimbabwe’s economy remained subdued last year, with key sectors such as mining, manufacturing and tourism recording negative growth due to drought, floods, Covid-19 and macro-economic risks, among others.
Sectors such as mining, manufacturing, tourism, construction, distribution and other service sectors had faced the full negative impact of all shocks either through lockdowns, reduced investment inflows, lost production hours, closed borders, grounded distribution transport systems, broken supply chains and low demand, among others.
According to the World Bank’s flagship report titled Global Economic Prospects, Zimbabwe’s economy contracted by 10% last year, against the government’s projection of -4.1%. Next year, Zimbabwe’s economy will grow by 3.1%, the World Bank projected.
The World Bank said Covid-19 caused a global recession whose depth was surpassed only by the two World Wars and the Great Depression over the past cecentury-and-half.
The multilateral lender also noted that although global economic activity is growing again, it is not likely to return to business as usual for the foreseeable future.
The pandemic has caused a severe loss of life, plunging millions into extreme poverty and is expected to inflict lasting scars that push activity and income well below their pre-pandemic trend for a prolonged period.
“Several countries, particularly low-income countries, are already in, or at risk of, debt distress. In addition, the characteristics of the debt build-up of the fourth wave also raise new challenges and again highlight the major difficulties in achieving lasting debt relief,” the report reads.
The report further shows there were already more than 150 million food insecure people in 2019 in sub-Saharan Africa — one-fifth more than the remaining five emerging markets and developed economies regions combined .
The World Bank said a combination of the Covid-19 containment restrictions and adverse weather events such as floods, droughts and locust infestations has contributed to localised food price spikes in the region.
Last year, Finance minister Mthuli Ncube last week announced an ambitious ZW$421.6 billion budget, which analysts and economic experts doubt will extricate millions of Zimbabweans who are currently swimming in a sea of poverty.
“Economic growth is expected to rebound in 2021 from the consecutive two-year slump to record 7.4%. From the supply side, this growth will be driven by strong recovery in agriculture, mining, electricity, construction, transport and communication as well as finance and insurance,” Ncube said.
Ncube said while the economy will contract by -4.1% by year-end, it will rebound with a growth of 7.4% before stabilising at an annual growth rate of 5% thereafter.