Despite a discouragingly low World Bank ease of doing business rating, Zimbabwe, one of Southern Africa’s sleeping giants is on the brink of an economic breakthrough. The Government is putting up building blocks to construct an economy smoldered by a decade of economic crisis.
Between 2000 and 2010, a period now regarded as the lost decade, the country witnessed an unprecedented economic collapse after the Bretton Woods institutions had pulled the rug from under Zimbabwe’s feet, as the United States and the European Union slapped sanctions on the country. In turn Zimbabwe, which was traditionally reputed as the breadbasket of Southern Africa, following a Rhodesian tradition of vibrant agricultural production, lost its status.
Despite the foreign currency shortages, the worthless Zimbabwe dollar that had to be scrapped off and record-breaking levels of inflation, the introduction of a cocktail of foreign currencies and several reforms has cast a positive economic trajectory. The slow thawing of relations has recently seen international airlines returning, multi-national companies showing keen interest in the country and some economic sectors recording remarkable signs of growth.
As a result of new policy measures introduced only four years ago, the period between 2009 and 2011 saw serious economic rebound on the back of strong economic growth averaging 9,5% and single digit inflation rate below 5%. During the spring back period, Zimbabwe was the fastest growing economy in the world.
Zimbabwe’s economy holds a lot of potential in value adding commodities, particularly in the agriculture and the mining sector. Given that Zimbabwe is now the world’s fifth largest producer of diamonds by volume and sits on 25% of the world reserves, there can be no better place for investors to cast their gaze.
African economies are consistently growing faster than those of any other region of the world. Both government and business leaders are optimistic that Zimbabwe has the potential to surpass the national target of 100 billion USD economy by 2040. In a recent study by the Economist, Zimbabwe ranked in the top 3 FDI destinations, with unparalleled investment returns. The future looks bright. Now is the time to bet on Zimbabwe.