'Zimbabwe investment environment gloomy'

'Zimbabwe investment environment gloomy'
Published: 19 January 2018 (559 Views)
Zimbabwe's investment outlook remains gloomy with this year's harmonised elections likely to generate uncertainties, the African Development Bank (AfDB) has said.

President Emmerson Mnangagwa told State media on Wednesday that elections would be held in five months.

"The elections scheduled for 2018 are likely to generate uncertainties that will hinder economic growth and investment. The investment environment remains gloomy," AfDB said in its African Economic Outlook 2018 report.

"According to the World Economic Forum's 2017/18 Global Competitiveness Report, the most problematic factors for doing business include policy instability, inadequate foreign currency regulations, inefficient government bureaucracy, difficulties in access to finance, inadequate supply of infrastructure, restrictive labour regulations, and inefficient tax administration and regulations."

The banking group said Zimbabwe's economic growth was expected to improve to an estimated 2,6% in 2017 from 0,7% in 2016, driven by stronger performance in agriculture, mining, electricity and water.

It said real gross domestic product (GDP) is projected at 1% this year and 2,6% in 2019.

"Economic performance in 2018 is likely to be affected by political changes; real GDP growth is projected to be 1% in 2018 and 1,2% in 2019. The economy continues to face structural challenges from high informality, weak domestic demand, high public debt, weak investor confidence, and a challenging political environment," AfDB said.

It said Zimbabwe was experiencing a liquidity crisis, which is a manifestation of structural deficiencies and distortions in the economy.

The bank said Zimbabwe's fiscal policy was highly consumption-oriented, limiting fiscal space for capital and social expenditures.

"Total expenditure picked up as the government expanded the command agriculture programme and maintained the high public-sector wage bill (around 19% of GDP)," AfDB said.

AfDB said a modest recovery in international commodity prices was projected to spur growth in mining.

Energy production is expected to improve following the completion of the Kariba South Extension Plant in December 2017.

Manufacturing sector, the bank said, is likely to see growth on the back of a protectionist policy to support local industry.

"This intervention resulted in significant increases in capacity utilisation in local industry, from 34,3% in 2015 to 47,4% in 2016, before declining to 45,1% in 2017," AfDB said.

It said weak economic activity in 2016 led to a fall in total revenues of 6% in nominal terms, exacerbating liquidity shortages.

"The 2016 introduction of bond notes pegged to the US dollar saw the emergence of a parallel market for foreign exchange, owing to the shortage of foreign currency. The real exchange rate remains overvalued, undermining external competitiveness," AfDB said.

- newsday

 0

You May Like These Videos

Comments

There are no comments.

Latest stories

'Zimbabwe polls were meant to start new era'

by Staff reporter | 18 August 2018 | 77 Views

Police 'cooked up documents used to drag Biti from Zambia

by Staff reporter | 18 August 2018 | 75 Views

'Punish Zimbabwe's rogue soldiers'

by Staff reporter | 18 August 2018 | 65 Views

Tshinga Dube won't let go

by Staff reporter | 18 August 2018 | 97 Views

Electoral outcome predetermined

by Maxwell Sibanda | 18 August 2018 | 54 Views

General Valerio Sibanda issued statement under duress, says Mutsekwa

by Staff reporter | 18 August 2018 | 69 Views

Grace Mugabe enjoying life

by Staff reporter | 18 August 2018 | 60 Views

Mnangagwa splashes over $1 million on new limo

by Staff reporter | 18 August 2018 | 59 Views

Chivayo, Kadungure in trouble

by Staff reporter | 18 August 2018 | 51 Views

'Biti acted illegally'

by Staff reporter | 18 August 2018 | 67 Views

'Poop at my doorstep'

by Staff reporter | 18 August 2018 | 61 Views

Church leader wanted sex

by Staff reporter | 18 August 2018 | 71 Views

Mliswa under attack for visiting Johane Masowe shrine

by Simbarashe Sithole | 18 August 2018 | 81 Views

Kofi Annan dies

by Staff reporter | 18 August 2018 | 63 Views

Exposed Chief's wife goes berserk threatening all and sundry!

by Concerned Murowa Ward Community | 18 August 2018 | 120 Views

'Senzeni na' guitarist dies

by Stephen Jakes | 18 August 2018 | 87 Views

Chiwenga's trip to Russia suspicious

by Stephen Jakes | 18 August 2018 | 158 Views

Nkayi youths train on active citizenship

by Stephen Jakes | 18 August 2018 | 67 Views

Inside Chamisa's Campaign

by Sam Wezhira | 18 August 2018 | 124 Views

Nkomo pledges to donate to Gwampa ECD

by Stephen Jakes | 18 August 2018 | 58 Views

Chief Justice gives Chamisa deadline

by Staff Reporter | 18 August 2018 | 92 Views

Grace Mugabe 'fake' degree gets UZ vice-chancellor suspended

by Staff Reporter | 18 August 2018 | 69 Views

Zimbabwe police warns against illegal gatherings

by Staff Reporter | 18 August 2018 | 59 Views

Chamisa is not a factor in parliament, which is good

by Igomombe | 18 August 2018 | 81 Views

'Con-Court must be free to decide,' says Chiwenga

by Staff reporter | 18 August 2018 | 65 Views

Chamisa in dilemma

by Staff reporter | 18 August 2018 | 100 Views

Prophet blew cover on $1m gold theft

by Staff reporter | 18 August 2018 | 62 Views

'Proving poll rigging allegations an uphill task'

by Staff reporter | 18 August 2018 | 60 Views

Man in 'fiery revenge'

by Staff reporter | 18 August 2018 | 61 Views

Trapped artisanal miner dies after five days in mine

by Staff reporter | 18 August 2018 | 46 Views

WATCH: Donel Mangena back in Bulawayo

by Staff reporter | 18 August 2018 | 46 Views

High court reverses AFM church evictions

by Staff reporter | 18 August 2018 | 57 Views

Zimbabwean breaks SA wine auction record

by Staff reporter | 18 August 2018 | 52 Views

'No valid application before the court'

by Priscilla Makanyara Chigumba | 18 August 2018 | 73 Views

Challenges for Chamisa's SA lawyers

by Staff reporter | 18 August 2018 | 57 Views