PROGRESS being recorded by the Government in efforts to vaccinate the majority of citizens will help minimise the negative impact of the third wave of Covid-19 on Zimbabwe’s economic growth targets, analysts say.
Finance and Economic Development Minister Professor Mthuli Ncube forecast that the economy will grow by 7,4 percent this year driven largely by strong agricultural season and the global mineral price boom.
Authorities say once galloping inflation, which dropped to 106,6 percent in June from 162,9 percent in May 2021, will fall below 25 percent by year end after climbing to a post dollarisation high of 837 percent in 2020.
The strong growth prospects were also backed by the International Monetary Fund (IMF), which projected the economy to grow by 6 percent and the World Bank Group, which sees a 3,9 percent expansion.
Zimbabwe’s economy, after a 6 percent decline in 2019 due to drought and impact of Cyclone Idai, contracted by a further 4 percent in 2020, largely on account of disruptions to domestic and global trade caused by Covid-19.
But the country, three weeks ago, retreated into a relaxed level four lockdown to neutralise the negative impact of Covid-19 amid a renewed surge in positive cases under what is generally referred to as the third wave.
Among the latest restrictions imposed by the Government were dawn to dusk curfew, reduced business hours and banning of intercity traveling, except for purposes of production and distribution of food and medicines.
Economist and former monetary policy committee (MPC) member Eddie Cross said the relaxed level four lockdown measures would ensure that the impact of the third wave of the pandemic will be negligible.
Mr Cross also said the generally low rate of infection in Zimbabwe, either due effect of Government measures in combating the spread of the virus or weather conditions, would work in the economy’s favour.
The only real concern, Mr Cross said, was the risk posed by disruptions to trade and supply chains following a fortnight of deadly riots in South Africa over the incarceration of former President Jacob Zuma.
“I think there are threats but they are being minimised by the relatively limited impact of Covid-19 in Zimbabwe, whether it’s the weather, whether it is the people resting, I do not know, whatever it is.
“I think we are less affected than in other countries, but I think the main reason for that have been the restricted measures imposed on the country by the Government in response to the Covid-19,” Mr Cross said.
Mr Cross said the relaxed level four lockdown measures, allowing full scale business and economic activity between 8 am and 15:30 pm will result in limited negative impact of the third wave on the economy.
He said reaching the national herd immunity was critical for the Government to open all sectors of the economy without any restrictions, but noted that reaching the feat would be more beneficial in the longer term.
Zimbabwe had by July 15, 2021 inoculated about 1, 036 million of its citizens with at least the first dose of vaccine, representing about 7,1 percent of the population while 630 000, about 4,3 percent had been fully vaccinated.
Economist and MPC member, Persistence Gwanyanya said the third wave was a worrying risk, but pointed out the progress by the Government in rolling out mass vaccination programme, as a key deciding factor.
“I just got some indications from the Treasury that (health officials) have now done a million jabs under the first phase of the vaccinations. Compared to the region, I think we have done quite well.
“This will help to save, firstly, life and secondly support the economic efforts on the ground. It is true, we are worried that Covid-19 poses a risk, but we have done quite a lot to contain the pandemic.
“On the positive side, is a good agricultural season. We expect significant output this year from agriculture. Even the mining sector, (will do well). Gold, following incentives that were put in place . . . we recorded deliveries of 2,9 metric tonnes.
“This is the highest ever. It is a huge increase in deliveries and it happens at a time when gold production or deliveries had fallen significantly to between 17 tonnes and 19 tonnes for a whole year, last year.
“It is happening at a time when bullion prices are firmer and all those factors would support the growth that we expected as a country despite risks coming out Covid-19,”
Mr Gwanyanya said.
He also noted that the Government had done well on the policy side by containing fiscal imbalances as well as monetary measures of the Reserve Bank of Zimbabwe (RBZ) that have fostered stability.
Mr Gwanyanya said stability, following rampant inflation increases driven by exchange rate volatility in the second quarter of last year, was key if the country was to realise its growth targets.