Zimbabwe’s Economy Faces a Downturn Due to Looming Drought

Navigating Economic Challenges Amidst Climate Change

by Motoni Olodun

Zimbabwe’s economic growth is projected to decline from 5.5% in 2023 to 3.5% in 2024, primarily due to an anticipated drought caused by El Nino, according to Finance Minister Mthuli Ncube. The El Nino phenomenon, characterized by unusually warm surface waters in the central and eastern Pacific, is expected to adversely affect crop yields during the 2023/24 farming season.

In addition to the drought, falling mineral commodities prices are also expected to impact economic growth. Despite these challenges, Zimbabwe’s budget deficit is expected to end the year at 1.2% of GDP, with annual inflation predicted to decrease to 10%-20% in 2024 from 20% in 2023.

Finance Minister Ncube remains optimistic, stating that “fiscal restraint and tight monetary policy, together with a healthy current account position, provide the necessary conditions for currency and price stability.” To boost revenue collection, he proposed increasing toll fees for the country’s busiest road, introducing a levy on sugary drinks, and implementing a wealth tax.

In a move to encourage value addition, Ncube also stated that lithium miners should submit refinery plans by March 2024. As the leading lithium producer in Africa, this could potentially boost Zimbabwe’s economy.

While the news has been met with both excitement and scepticism, the researchers have responded by encouraging others to replicate their efforts to test their findings. If their claims are proven true, it would be one of the biggest breakthroughs in physics history, leading to revolutionary changes in electronics and undoubtedly earning Nobel medals for all those involved.

Despite the challenges ahead, Zimbabwe’s resilience and potential for growth remain strong. With strategic planning and effective policies, the country can navigate these hurdles and continue on its path towards economic stability and growth.

Source: Reuters


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