Zimbabwe makes it into Africa's top 10

Published: 28 August 2013

ZIMBABWE'S economy holds limitless potential to outshine its African peers after making it into the 10 fastest growing economies on the continent despite facing a myriad of challenges.

According to the Zimbabwe Investment Handbook launched in Victoria Falls on the sidelines of the United Nations World Tourism Organisation General Assembly, Zimbabwe was among the 10 fastest growing economies in Africa from 2009 to 2012.

"According to the Economic Report on Africa 2013, Zimbabwe was among the top 10 growth performers in Africa from 2009 to 2012."

Zimbabwe is now rated among fast growing economies such as Ethiopia, Ghana, Malawi, Sierra Leone, Rwanda, Mozambique and Libya.

Africa achieved 5 percent growth rate in 2012, well above the world average, despite the global slowdown, tension and uncertainty.

Recovery in many countries was underpinned by a variety of factors, including high commodity demand on international market, rising domestic demand due to rising incomes and urbanisation.

Increasing public spending on infrastructure projects, increasing trade and investment with emerging and developing economies and increased foreign investment in extractive industries and in some post-conflict countries also supported growth.

"Zimbabwe's economy recorded average growth of 8,5 percent in the period 2009-2011, but slowed down in 2012 with estimated growth of 4,4 percent," reads an excerpt from the handbook.

This is despite the fact that the country faces a multiplicity of constraints that include low capital inflows, liquidity challenges, high cost of utilities, old equipment, expensive funding, raw material shortage, energy crisis and poor infrastructure.

While the economy was projected to grow by 5 percent in 2013 the forecast has been revised to 3,4 percent after poor performance in agriculture and weakening global commodity prices.

Zimbabwe's growth followed Government's adoption of the multi-currency in 2009, which brought stability. Further, the pursuit of prudent fiscal policy enabled Government to keep inflation low.

Zimbabwe's average annual inflation during the first five months of 2013 was below 3 percent, one of the region's lowest. Government has targeted inflation rate of 5 percent for 2013.

The country has enjoyed stable macro-economic environment since 2009 and investors need to capitalise on the development to explore investment opportunities in the country.

Government identified foreign direct investment as critical for economic and targets to increase investment as a percentage of Gross Domestic Product from 4 percent to 25 percent by 2015.

But what is fascinating about the country's growth potential is that the economy grew in tandem with the average pace as the rest of the continent with more stable conditions and less constraints.

Despite the tame argument by other analysts that the economy grew faster because it was coming from a low base, its growth remains extraordinary for a country afflicted by so many challenges and the impact of a decade of Western sanctions.

These challenges reflect in the country's trade statistics, which show that Zimbabwe exported US$3,884 billion in 2012 compared to imports of US$7,4 billion imports over the same period.

But investors who take the plunge and grab opportunities abundant in the economy will have the last laugh compared to those still sitting on the fence weighing perceived risks in the economy.

Zimbabwe faces an uphill task to address the numerous constraints militating against its growth potential, but opportunities and potential benefits far outweigh the challenges.
- herald

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