The Sunday News
Gabriel Masvora, Business Editor
THE Zimbabwe economy is now on the rebound despite losing 500 000 formal jobs due to the Covid-19 pandemic mainly in the hard hit sectors of education, non-food manufacturing, transport and tourism, the International Monetary Fund has announced.
Last month, the country marked two years after reporting its first case of Covid-19.
The advent of Covid-19 in the country triggered various control measures by the Government among them numerous levels of lockdowns and curfews which forced most companies and sectors to scale down.
Some were forced to completely shut down. Among the hardest hit was the tourism industry which literally grounded as it depended mainly on international tourists who could not travel due to the restrictions and banning of international flights.
Even domestic tourism was limited as travel among locals was also restricted resulting in hotel occupancy going down and some activities completely suspended.
The country has reopened most of the economic sectors and positive signs have started to flicker.
“Certain sectors such as mining, agriculture, ICT and telecommunications, health, and food stuffs manufacturing, were classified as essential services — and were allowed to operate during the lockdowns — and have remained resilient throughout the crisis. However, 500 000 people have lost their jobs due to the pandemic and extreme poverty rose,” the IMF said.
The IMF however, acknowledged that the country was now experiencing a rebound in the economy after putting a number of measures to mitigate the effects of Covid-19. Zimbabwe is among one of the countries in Africa which has led a strong vaccination campaign which has seen some cities such as Bulawayo inching towards herd immunity.
“The Zimbabwean economy is experiencing a strong rebound following the negative effects of Cyclone Idai, the drought, and the Covid-19 pandemic that weighed on growth in 2019 and 2020. The implementation of decisive response measures and an improved policy environment moderated the fallout from the pandemic and laid the groundwork for the recovery,” the IMF said.
The financial institution said Zimbabwean authorities also managed to persevere with reforms supportive of macro-economic stability that entrenched fiscal discipline, tightened monetary conditions to tame inflation, and advanced structural reforms to tackle governance vulnerabilities and improve the business climate.
“The authorities’ determined reform efforts reflect their Vision 2030 aspirations of graduating to Upper Middle-Income Status, by realizing the objectives of the first National Development Strategy (NDS1, 2021-2025). Specifically, the NDS1 aims to sustain macro-economic stability, reduce poverty and inequality, and transform institutions to enhance public sector efficiency and service delivery.”
IMF also commended the re-engagement efforts that the country has engaged. Over the years, President Mnangagwa has led stepped re-engagement efforts that have seen the country become visible at major international forums as well as a drive to lure more investors into the country.
“The authorities have also renewed international re-engagement efforts and seek support to clear arrears, normalise creditor relations, unlock external financing, and unleash the country’s growth potential.”
IMF also said the country was set to see economic growth anchored on some of the policies the Government has put in place.
“Economic growth rebounded from -5,3 percent in 2020 to 6,3 percent in 2021, largely underpinned by expanded activity in the mining and construction sectors. Manufacturing sector activity also benefited from import substitution opportunities created by global supply bottlenecks.
Moreover, the favourable 2020/21 farming season boosted output in agriculture and the downstream agro-processing industry, and enhanced hydro-power production. Going forward, the steady progress made to date, in vaccinating about 40 percent of the adult population is envisaged to help boost trade, transport, and other contact-intensive service sectors that had been impacted by the pandemic.”
The body said the vaccination of the entire adult population in Victoria Falls, the country’s prime tourist destination, is expected to set the stage for a rebound in tourism activity.
IMF also praised fiscal discipline by the Treasury which it said have been underpinned by strict adherence to cash budgeting principles and non-inflationary financing.
However, IMF noted that more still needs to be done to plug leakages among parastatals and stop the dependence of these institutions on Government support.
