Africa > Southern Africa > Zimbabwe > Zimbabwe Outlook for 2013-17

Zimbabwe: Zimbabwe Outlook for 2013-17

2013/10/09

The country (Zimbabwe) is situated in Southern Africa, between South Africa and Zambia. It has borders with Mozambique for 1231 km, South Africa for 225 km, Botswana for 813 km, and Zambia for 797 km.
Is land is normally high plateau with higher central plateau (high veld) mountains in east. Is land covers an area of km². The climate is tropical; moderated by altitude; rainy season (November to March).Zimbabwean speak English Shona, Sindebele ,numerous but minor tribal dialects.

OVERVIEW

Presidential and legislative elections will be held on July 31st, and are likely to prove chaotic given that they are underfunded and that protracted disputes over the exact timing have left the electoral authority with relatively little time to organise the practicalities. The IMF has agreed a staff-monitored programme covering April-December 2013. This could lead to a deficit-relief agreement in the longer term, but much will depend on economic policymaking in the wake of the polls. Increase in 2013 is likely to remain depressed, at little additional than 2%, but expansion should start to rise thereafter, provided that the new government does not return to failed economic policies.

Political outlook

After protracted disputes about the precise timing, the elections will proceed on July 31st. However, because of the protracted uncertainties the Zimbabwe Electoral Commission has had little time to organise the practicalities, and the polls are likely to prove chaotic. The MDC is almost certain to win the popular vote, but it remains unclear whether it will as well win the count.

Economic policy outlook

In June the IMF approved a staff-monitored programme covering April-December 2013, the initial Fund agreement in additional than a decade. The SMP does not entail any financial assistance, but successful implementation would be an significant move towards re-engagement with the international community and, from presently on, a deficit-restructuring agreement. However, much will depend on the course of economic policymaking next the elections.

Economic forecast

Economic increase is likely to remain muted in 2013, at around 2.2%, because of a poor domestic business climate and weak external request. Should the election process prove violent, increase could well be lower or even turn negative.

Outlook for 2013-17

 

  • Legislative and presidential polls are due to be held on July 31st 2013, and are likely to prove chaotic.
  • Morgan Tsvangirai and his Movement for Democratic Change (MDC) are almost certain to win the vote, as in 2008. However, in the 2008 poll they lost the count, and there is a substantial risk of this happening again.
  • An extra ZANU-PF victory would be regarded by the West as fraudulent, and could lead to the maintenance of some EU sanctions. An MDC victory is likely to see an increase in foreign assistance.
  • If ZANU-PF remains in power the government is likely to continue to run up domestic arrears and to seek loans from non-traditional sources as revenue streams disappoint.
  • Increase in 2013 will largely be determined by the conduct and outcome of elections, but is highly unlikely to reach the official estimate of 5%; we currently estimate expansion of just 2.2%, rising to 3.6% by 2017.
  • The current-account deficit as a % of GDP is set to rise to an annual average of 24% in 2013-14, reflecting stagnant exports, before moderating to an annual average of 21.9% in 2016-17.

Review

 

  • In mid-June the president, Robert Mugabe, bypassed parliament and set July 31st as polling date. This proved controversial with the MDC and both the regional and international communities.
  • Robert Mugabe and Morgan Tsvangirai subsequently submitted a joint appeal to the Constitutional Court for a two-week delay in the vote. This was rejected, however.
  • Corruption remains a critical issue. According to Transparency International's 2013 world corruption barometer, 67% of Zimbabwean respondents believe that graft has increased substantially over the completed two years.
  • In June Zimbabwe sent a letter of intent to the IMF seeking a staff-monitored programme covering the period April 1st-December 31st 2013. The Fund approved this the same month.
  • The industrial index of the Zimbabwe Stock Exchange (ZSE) reached a record high of 212.8 on May 31st. Foreign buyers are dominating; local investors are additional wary, in part because domestic liquidity is tight.
  • The government has held a series of public consultation meetings to discuss proposed new mining policies, which propose increased national control over the marketing of precious metals, gold and platinum.
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