eBusiness Weekly
Michael Tome Business Writer
ZIMBABWE’s gross domestic product (GDP) is estimated to have grown at an annual rate of between 3, 2 percent, and 4 percent in 2022, Zimbabwe National Statistics Agency (ZimStats) revealed this while presenting the 2019 – 2022 quarterly GDP estimates.
This was attained after the country recorded a better economic out turn having posted growth of 3, 6 percent, 5,6 percent and 6, 8 percent from the second to the fourth quarter of 2022 respectively albeit a 16, 1 percent slump in the first quarter, owing to a turbulent economic environment which was characterised by a volatile foreign currency exchange rate and biting power outages.
Growth in 2022 was dominantly inspired by the wholesale and retail trade sector which recorded a growth of 3,6 percent, 5,6 percent, and 25,8 percent in the second, third, and fourth quarters respectively despite a sharp 27,1 percent decline in the first quarter of the year.
Agriculture sector performed modestly as it recorded 13 percent and 9, 7 percent growth in the second and fourth quarters correspondingly as the periods fall under the main harvesting periods including wheat harvest in the fourth quarter.
The sector’s performance in 2022 was undoubtedly spurred by a record wheat production as Zimbabwe managed to harvest a record 375,000 metric tonnes (mt) in the season.
However, non-active first and third quarters saw a 9, 4 percent and 12, 3 percent dip in the sector’s estimated GDP performance.
The mining sector slowed down by 10, 7 percent in the first quarter, owing to the wet season which traditionally affects mining operations. It, however, picked up to record 1, 8 percent, 14, 2 percent, and 7, 1 percent for the second, third, and fourth quarter of the year.
Deliveries from the mining sector have been improving significantly lately especially after the decriminalisation of artisanal mining to encourage panners to sell their gold formally
Electricity production saw a modest 1, 5 percent and 6, 2 percent growth in the first and second quarter of 2022 respectively, while the situation got dire in the second half of the year as production took 11, 3 percent and 17, 2 percent dip in the third and fourth quarters in that order.
In the second quarter of 2022, Kariba Power Station generated 72 percent of the total energy requirements while Hwange Power Station contributed 27 percent, whose combined output was far from the demand at hand.
As such, the manufacturing sector slumped 52, 9 percent in the first quarter of the year only to recover at 28, 1 percent and 47, 7 percent in the second quarter of the year. The situation took a downturn as the sector saw a minus 0, 8 percent in the fourth quarter as incessant power outages took the centre stage.
In the second quarter of 2022 local industry faced persistent power outages coupled with high-interest rates (200 percent) which led local firms to shun loan acquisitions, a factor that seriously impeded growth in business operations.
Consequently, there was a decline in the manufacturing sector’s export share from 5, 4 percent in 2021, which is concerning given the lost multiplier effects associated with the sector.
“We looked at the major sectors that drive the economy and this economic census is trying to take stock and assist us to establish the structure of the economy, it is a process that we have to undertake so that we perform some processes for instance the rebasing after every five years,” said Taguma Mahonde the Zimstats Director General while presenting the 2019 – 2022 quarterly GDP estimates.
He said the compilation of quarterly GDP is a response to the increasing demand for high-frequency statistics from stakeholders as quarterly estimates of GDP are a frequency indicator of economic activity which provide the impetus for timely policy intervention.
According to ZimStats, the Information and Communication (ICT) sector recorded continuous growth of 2, 5 percent, 11, 5 percent and 13, 5 percent for the second, third, and fourth quarters of the year respectively driven mainly by growth in volumes of voice, data and internet usage.
Despite sustained growth, the ICT sector was strongly distracted, by relentless increases in prices due to inflation in the first half of 2022 which saw operators lose revenue in real terms as working capital requirements continued to grow at a rate that exceeded income leading to reduced network investment.
Like the greater part of the industry, incessant power outages experienced in the fourth quarter crippled the sector’s services.
Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) Director General, Dr Gift Machengete in the 2022 performance review decried excessive load shedding saying it continues to suppress the sector‘s performance, whose operations highly depend on electricity.
He further indicated that consumption of the sector’s product offerings continues to be limited given customers’ inability to afford data services owing to their limited disposable incomes.
“The sector continues to be negatively affected by the inflationary operating environment, unavailability of credit, reduced real disposable incomes, and shortage of foreign currency amongst other challenges. The increased load shedding has also posed a serious challenge to operational efficiencies, impacting the overall quality of service and raising the cost of service provision.
“Inadequate foreign currency allocation continues to affect network expansion and maintenance efforts. Unlike other services that may have alternative local supply, the provision of telecommunication relies heavily on imports mainly in the form of equipment, software as well as bandwidth,” said Dr Machengete.
GDP estimates are a measure of the total value of all final goods and services produced within a country’s borders during a specific period of time, usually a year or a quarter, and are typically produced by national statistical agencies and international organizations such as the World Bank and the International Monetary Fund (IMF).
They are normally used to assess the overall health of an economy particularly growth rate, and level of economic development. They can also be used to compare the economic performance of different countries or regions over time.
However, GDP estimates have limitations and do not necessarily capture other important aspects of economic well-being such as income distribution, environmental sustainability, and social welfare.
ZimStats survey provides information on the structure and characteristics of the Zimbabwean economy, including the number and size of businesses, their location, sectoral distribution, and employment levels.
It collects data on a wide range of variables, including business size, ownership, employment, revenue, expenses, assets, liabilities, and other key indicators.
The data collected in the census is used by businesses, policymakers, researchers, and the public to better understand economic trends, make informed decisions, and develop policies and programs that support economic growth and development.
Economic Census covers virtually all sectors of the economy, including agriculture, mining, manufacturing, wholesale and retail trade, construction, transportation, communication, utilities, finance, insurance, real estate, and other services.
