President Emmerson Mnangagwa’s administration has laid the right platform for Zimbabwe’s economic growth, with the evident investor appetite indicative of an emerging economic revolution, a top British economic research firm says.
In its latest report, BMI Research — a London-based firm that provides macroeconomic, industry and financial market analysis covering 200 global markets — predicts that Zimbabwe’s fiscal deficit will narrow significantly beginning next year.
It reports that with a “reform-minded” President, Zimbabwe is poised for sustainable growth.
The projections are a ringing endorsement of President Mnangagwa’s handling of the economy since assuming office last November.
Government anticipates economic growth of at least 6 percent this year.
According to BMI Research, Zimbabwe will experience a brief recession this year before surging ahead after elections.
The report reads in part, “Efforts to consolidate Zimbabwe’s fiscal position will face headwinds from sluggish revenue growth and the costs of running a general election, scheduled for 2018.
“That said, scope for fiscal consolidation has improved following the appointment of a more reform-minded President in Emmerson Mnangagwa and we see the deficit narrowing more substantially in 2019.
“The ongoing shortage of hard currency in Zimbabwe will see the country’s current account deficit narrow further in 2018. That said, a more optimistic outlook for foreign financing under the country’s new reform-minded President, Emmerson Mnangagwa, will see import growth tick up from 2019, limiting any further consolidation of Zimbabwe’s current account.
“The apparent demise of the Mugabe family in Zimbabwean politics bodes well for a more sustainable monetary policy going forward. Greater scope for re-engagement with the international community, particularly with concessional lenders, increases the likelihood of a successful re-introduction of a local currency.
“After 37 years in power, President Robert Mugabe’s resignation heralds the beginning of a new era in Zimbabwe, not only symbolically, but also in terms of the country’s prospects for meaningful economic reform.”
Since assuming office, President Mnangagwa has led an aggressive realignment of Zimbabwe’s economy by introducing far-reaching economic reforms and international re-engagement.
Through his “Zimbabwe is open for business” campaign, authorities are opening up investment avenues.
President Mnanagwa’s has set a target of Zimbabwe growing from being a low-income to a middle income economy by 2030.
The World Bank classifies a middle-income economy as one with a gross national income of between US$1 005 and US$12 235 per capita.