FINANCE Minister Tendai Biti yesterday said Zimbabwe had potential to be part of the African economic renaissance if it addressed its growth bottlenecks. This project was being led by economic analysts to occur over the next four decades.
Minister Biti said the African continent was poised for rapid economic growth if projections by leading economists Mckinsey Global Institute in its 2012 Africa progress report and research findings by renowed economist Professor Charles Robertson are anything to go by.
He made the remarks during a Confederation of Zimbabwe Industries economic outlook symposium held in Harare yesterday under the theme "2013 a Year of Decisive Action".
Projections by Mckinsey and Company are that Africa currently has 90 million people in the middle class, 382 million in formal employment, but will create 222 million more jobs by 2020 with 72 million of the projected new jobs coming from the non-agrcultural sector. Further, the report states that Africa would have about 128 million middle class consumers by 2020, signalling the emergence of a strong consumer class and rapid growth.
Professor Robertson contends that as Africa grows faster than most economies in the world, Nigeria would be the 13th largest economy in the world by 2050 while Africa's Gross Domestic Product will be an estimated US$29 trillion, which will be bigger that the economies of Europe and the United States of America. It compares Africa now to Asia in the 1970s.
The Africa progress report propounds that by 2050 Kenya will be a US$1 trillion economy, Uganda US$700 billion while Nigeria's economy would hit the US$3 trillion GDP mark as early as 2038.
Zimbabwe, stalked by economic challenges during the past 10 years, currently has an estimated US$8-US$10 billion GDP and while it grew at an average 10 percent in 2010 is seen expanding by about 5 percent this year due to a number of challenges that also include the high cost of finance, power shortages and uncompetitive industry.
"I want to talk about the challenges to Zimbabwe's economy. The first one is the issue of a dual enclave economy (agriculture and manufacturing) -- a economy that has largely been anchored by agriculture and mining," he said.
He said apart from relying on the two sectors Government needed to instutute measures that induce equal contribution to GDP from other key sectors including manufacturing, tourism, information communication and technology, finance, distribution and pharmaceuticals among others.
Minister Biti said the challenges that needed attention included policy consistency and reform, high levels of foreign debt, low foreign direct investment, lack of industrial competitiveness, need for peace and stability, low domestic savings, high Government consumption, high current account deficit, infrastructure decay, political differences and the breakdown of a social contract.
Minister Biti said to achieve rapid macro-economic growth, such as the average 7,4 percent rate at which the country grew since 2009, there was need for peaceful election environment, political maturity and leadership, policy consistency, accountability, transparency, strong economic linkages, stability, more FDI and competitive industry.
Further, he said there was need to guarantee food security, leverage mining through value addition, improve social service, and safety nets, adopt development budget, clear arrears and ensure debt sustainability and deepening the role of SMEs in the economy.
He said Zimbabwe had potential to do well but was playing second fiddle to neighbours Zambia and Mozambique that attracted US$2,9 billion and US$10 billion worth of foreign investment compared to its US$400 million last year.