Zimbabwe Sees Economic Growth Rate More Than Doubling in 2025

(Bloomberg) -- Zimbabwe’s economic growth rate will more than double next year as the country recovers from a devastating drought and benefits from rising manufacturing activity, according to government estimates. 

Gross domestic product will probably expand 6.5% in 2025, from an estimate of 2% this year, the Ministry of Finance, Economic Development and Investment Promotion said in a policy paper. 

The worst drought in 40 years led to crop failures and increased food insecurity, forcing President Emmerson Mnangagwa to declare a state of national disaster in April. The nation is seeking assistance from the United Nations’ World Food Programme and its millers have also said they will need to import about 1.4 million tons of corn to meet demand. 

The southern African nation’s economy is “expected to benefit from the recovery in agriculture, attributable to the expected normal— to —above—normal rainfall season, as well as increased activities in the manufacturing sector, which will benefit from investments in new steel production,” it said. 

The agriculture sector is forecast to grow 23.6% next year, compared with an estimated contraction of 21.2% in 2024. 

A unit of China’s Tsingshan Holding Group recently started to produce steel at its new plant in central Zimbabwe. 

The report also flagged the April introduction of a new bullion-backed currency, the ZiG, as key step in its dedollarization program and attempt to “re-establish a mono-currency regime, backed by a domestic currency that can spur domestic production and boost exports by making local products more competitive in international markets.”

While the ZiG has “significantly stabilized the macro-economic environment,” medium- to -long term soundness requires consistent implementation of policy reforms, well-managed liquidity injections into the domestic market, foreign-currency generation and supply, the ministry said. 

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--With assistance from Desmond Kumbuka, Rene Vollgraaff and Ana Monteiro.

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