Just how big is the Zimbabwe economy and how upbeat should one be about growth prospects?
The questions are taking on growing importance for investors who have already bought into the Zimbabwean market and those thinking about it.
The IMF and the mid-term review of Zimbabwe Finance Minister Tendai Biti incline to caution. Yet local companies are much more upbeat, according to an assessment from Imara Asset Management Zimbabwe, a subsidiary of the Pan-African Imara financial services group.
Imara has given a lead with investment facilitation into Zimbabwe and provides regular updates to international investors.
In his latest analysis, John Legat, Chief Executive of Imara Asset Management Zimbabwe, notes: “We find it hard to understand why both the IMF and government are being as cautious as they are… Their views give a rather sobering view of the economy rather than an upbeat and exciting outlook for a country barely in its second year of reform.”
The IMF believes Zimbabwe has an economy worth just over US$5 billion, though it admits supporting data has “serious shortcomings”.
Legat thinks the IMF arithmetic does not add up and uses the neighbouring Zambian economy – worth US$14 billion – as a yardstick. The countries have populations of a similar size, but until its ‘lost decade’ Zimbabwe’s economy was about 50% bigger.
Zimbabwe’s argriculture, tourism and manufacturing sectors gave it the edge over its copper-rich neighbour. By some measures, Zimbabwe still outdoes its neighbour.
Zambia’s two major breweries sold US$230 million worth of beverages last year while sales at Zimbabwe’s Delta brewery totalled $324 million.