DOZENS of Zimbabwe’s business leaders attended the annual CEO Roundtable this past weekend to discuss how to create a R700bn economy by 2030. The CEO Roundtable blurb says that, at independence in 1980, Zimbabwe’s economy was worth about R42bn against SA’s then gross domestic product (GDP) of R567bn.
In 2009, SA’s GDP had risen to about R2,5-trillion while Zimbabwe’s is now estimated to be the same as it was 30 years ago.
The 2030 target is a large mountain to climb for an economy a long way off its peak. The government is nevertheless extremely bullish about the economy this year. The 2011 National Budget Statement puts economic growth last year at 8,1%, up from 5,7% in 2009, led by 47% growth in mining and 34% in agriculture.
The Reserve Bank of Zimbabwe recently published optimistic economic forecasts. These included a doubling of tobacco output and large increases in production of sugar, maize and cotton. It also predicted mining growth of 44% this year.
New investment to the tune of R46bn to boost the ailing power infrastructure is on the cards as the sector opens up to private players — necessary to address the past decade’s serious de-industrialisation.
Tourist arrivals in the first three quarters of last year were nearly 800000, up from 533000 in 2009. Tourism officials in Livingstone, Zambia, which shares with Zimbabwe the region’s prime tourist attraction of Victoria Falls, concede they are losing tourists to their southern neighbour.
Export revenue doubled last year over the previous year — though, on the downside, so did foreign outflows, reflecting Zimbabwe’s import dependence and its underperforming manufacturing sector.
But looming political developments may arrest or reverse some of these gains. Most notable among these is the grinding up of Zanu (PF)’s election machinery following President Robert Mugabe’s statements that an election this year is unavoidable given the expiry of the government of national unity’s (GNU’s) two-year term. Mugabe has said he cannot extend the GNU for more than six months, after which elections must be held. But legal opinions suggest the GNU can govern until 2013 when, constitutionally, the next elections are scheduled — unless the parties agree to an earlier poll.
Already, heightened violence is being reported in rural and urban areas and rumours are surfacing of people being forced to pay for new Zanu (PF) party cards (essential for survival during an election).
There is also the question of missing diamond revenues. Finance Minister Tendai Biti has launched an inquiry into the whereabouts of R700m of diamond revenue earmarked for the Treasury, drawing fire from interested parties such as the state’s Minerals Marketing Corporation of Zimbabwe, which mined the diamonds with private operators.
Biti says the Treasury has received just R434m of the R1,2bn due to it, fuelling concern that Zanu (PF)’s control of the diamond fields, through the army and Defence Minister Emmerson Mnangagwa, has allowed it to divert revenue to the party for its election campaign.
Zanu (PF)’s sanctions propaganda machine has also been busy, trying to bluff the world that sanctions are to blame for Zimbabwe’s economic collapse and its slow recovery.
Political uncertainty and heightened investment risk emanating from Zanu (PF)’s indigenisation drive, which remains opaque in application and dominated by nationalistic rhetoric, is at the forefront here.
The weekend’s CEO Roundtable had its work cut out to devise ways for Zimbabwe to reach the 15% growth rate required to reach the proposed 2030 target. The country has a fighting chance only if the politicians pull back from their interference in the economy and its key assets.