Harare - Three years ago, Zimbabwe turned a corner in its quest to rejuvenate its economy, battered by a decade of illegal sanctions.
The country’s economy, once an envy of many in the region, went through a hard knock from 2000 when the government embarked on the land reform programme that displaced hundreds of white commercial farmers, drawing anger from former colonial master Britain, which retaliated with punitive sanctions that sapped the blood out of the young economy.
But after the formation of the inclusive government, the economy started crawling out of its shell, with GDP growing steadily from -17.7 percent in 2008 to six percent in 2009 and then nine percent in 2010, according to the World Bank.
This year, the GDP is expected to be around 9 percent, indicating a steady increase over the years but still far short of expectations, according to economic analysts.
Amid this euphoria, the country’s business community and the government have mooted an ambitious programme to ensure the economy reaches the US$100-billion mark by 2040.
Business Council of Zimbabwe (BCZ) president, David Govere, said there were a number of fundamentals, which the country had to consider to reach this target. The BCZ is a nine-member business association, which encompasses the Chamber of Mines, the Confederation of Zimbabwe Industries, the Bankers Association of Zimbabwe, the Employers’ Confederation of Zimbabwe, the Zimbabwe National Chamber of Commerce, the Zimbabwe Council of Tourism, the Zimbabwe Farmers Union, Zimbabwe Commercial Farmers Union, and the Commercial Farmers Union.
“We need to manage the country’s risk, create a favourable investment climate and exploit the quick wins in mining, agriculture and tourism in the short-term and restore manufacturing while exploiting economic integration in the medium term,” he said.
Figures from BCZ show that at 10 percent GDP growth, it will take the country 25 years to reach the US$108.34-billion mark ‑ which is within range.
The Finance Ministry estimates that this year the economy will grow 9 percent. However, there are doubts this can be sustained considering that most countries experience booms and then a slowing and levelling off in growth.
Deputy Prime Minister Arthur Mutambara has said, “... we must be growing at an average of 20 percent-plus or else this (US$100b economy) will remain a pipe dream.”
However, the country’s infrastructure is still in the intensive care, with hardly any new investment in major power and transport.
The Zimbabwe Electricity Supply Authority, the state power producer, is struggling to meet demand and struggles to pay for imports from neighbouring countries.
Current power demand is around 2 100 megawatts against generation capacity of 1 400MW.
Mozambique’s Hydro Cahorra Bassa has threatened to stop supplies to Zimbabwe over a US$5-million debt.
Josh Chifamba, the CEO of the state power utility, says to sustain a US$100b economy, the country needs 12 000MW.
“In fact, to achieve that, the whole power sector needs close to US$50 billion. I am not necessarily talking ZESA but even if we bring in private players,” he says.
This means Zimbabwe has to increase its power generation capacity by between 2 500MW and 3 000MW every five years.
Zimbabwe has not built a new power station in the last 28 years, and the major existing ones ‑ Hwange and Kariba ‑ are in need of refurbishment.
The youngest power Station, Hwange is already two years older than its expected life expectancy.
There is also need for investment in rail, road and air transport systems.
The rail system is in a shambles and figures released by the National Railways of Zimbabwe show that from a high of 12 000 tonnes moved at its peak, the parastatal now only rails less than 5 000 tonnes.
“We might need to ring-fence some of the products that we carry to ensure that we can improve our capacity,” says rails GM, Mike Karakadzai.
The national airliner, Air Zimbabwe, is tottering on the brink of collapse. It has suspended many routes and is often threatened with seizure of its craft at international airports over debts.
The state has, in recent weeks, been working on reviving the company’s fortunes and a new craft has been brought in to boost operations.
Analysts say some countries in the region with fewer problems than Zimbabwe’s have been struggling to improve their economies.
Zambia’s economy is around US$17b, Botswana’s is US$15b and Mozambique’s is US$10b.
The largest regional economy is South Africa (US$364b). ‑ CAJ News