7 December 2017

Zimbabwe: Zim Economy Poised to Grow 4pc

Photo: IRIN
Most basic commodities are not readily available on Zimbabwean shop shelves but can easily be found on the streets (file photo).

THE economy is projected to grow by four percent next year driven by a positive sentiment spurred by the new political dispensation and anticipated good agriculture season, the Reserve Bank of Zimbabwe has said.

Speaking at the First Green Investment Catalyst Round Table for Zimbabwe underway here, RBZ deputy director (Economic Research Division) Mr Samuel Tarinda said challenges and uncertainties associated with an election year would be short-lived and resolved, with minimal impact on the economy.

"Anticipated good agriculture season in 2018, positive spill-over effects to manufacturing, continued support to gold and other mineral production, increased electricity production following completion of a number of power projects and harnessing of international goodwill and capital are expected to spur growth significantly above 4 percent in 2018," he said.

"Going forward, inflation is expected to stabilise, given the recent downward movements in parallel exchange rates, and the measures to stimulate exports and, increase the supply of foreign exchange into the economy."

He said the envisaged expansion in economic activity may push up inflation to an average of 5 percent or slightly higher in 2018, but the levels will remain conducive to promotion of real growth. Mr Tarinda said RBZ will continue to monitor domestic and external causes of inflation, and take pre-emptive and other appropriate measures to keep inflation in check.

Turning to green investments Mr Tarinda said given the enormous investments needed to bring about a 'green transformation' towards sustainable, low-carbon development, the financial sector will have to play a central role in allocating resources to Green Investments -- as well as stopping or limiting funding to activities that harm the environment.

France cooperation attaché to Zimbabwe Mr Laurent Godefroy said the green investment scheme should be devoted to assess the feasibility of projects as a green qualification is a necessary but not a sufficient condition to go further.

"Then the project holders need a technical and a financial support to finalise the projects. Who is going to bring this kind of support, would it be up to an institution, or to each of the financial institutions which will be requested," he said.

Environment, Water and Climate Permanent Secretary Mr Prince Mupazviriho said the Green Investments Catalyst Roundtable initiative aims to mainstream climate change into project portfolio finance cycle, which includes project identification, preparation and appraisal, resource mobilisation, implementation, monitoring and evaluation.

"More specifically the roundtable aims to raise awareness, solicit your buy-in, discuss possible projects that can be financed through green investments and develop a framework for green bonds for Zimbabwe," he said.

"To achieve the objectives of this roundtable we have invited expertise in climate finance, green debt, asset management development partners and private sector players to explore the possibility of using capital markets to channel more resources for low carbon and climate resilient development."

Green investments are envisaged to assist the country to meet primarily national development goals and feeding into the broader Sustainable Development Goals.

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