EFE Securities •
2 weeks ago •
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EFE YEARLY REPORT 2024 Review & 2025 Equities Outlook
Zimbabwe's 2025 Crossroad
2024 was marked by significant political turbulence, particularly within the opposition Citizens Coalition for Change (CCC), leading to internal divisions and by-elections that strengthened the ruling ZANU-PF's parliamentary majority. The resignation of Nelson Chamisa from CCC leadership added to the political discourse.
An El Niño-induced drought led to severe food insecurity, impacting nearly half of Zimbabwe's 15.1 million population, with maize production dropping by 72%. However, a successful wheat harvest provided some relief. The informal sector expanded as a survival mechanism amidst high unemployment and economic instability.
Macroeconomic Performance: Zimbabwe's GDP growth was estimated at 2.0% in 2024, with projections for 6.0% in 2025, largely driven by agricultural recovery and contributions from sectors like mining and IT. Despite this, the economy faces challenges from currency volatility, high inflation, and a persistent liquidity squeeze.
Monetary Policy: The introduction of the Zimbabwe Gold (ZIG) currency aimed to stabilize the exchange rate and inflation, which saw fluctuations throughout the year. Inflation ended 2024 at 3.7% for ZIG, with expectations of further declines in 2025.
Fiscal Position: Revenue collections reached ZiG$62.4 billion against expenditures of ZiG$66.5 billion by September 2024, resulting in a deficit. The fiscal framework for 2025 anticipates continued challenges in managing public debt and fiscal deficits.
Trade and Investment: The trade deficit persisted, with imports outstripping exports. Foreign currency receipts increased by 17.9% from 2023, driven by export proceeds and remittances.
Sectoral Insights:
Agriculture: Favourable rainfall patterns in 2025 are expected to boost agricultural output, enhancing food security and rural incomes.
Mining: Despite global commodity price volatility, gold production increased, with significant contributions from small-scale miners.
Stock Market: The ZSE saw a 117.58% return in 2024, though liquidity issues persisted. The VFEX managed to attract new listings, albeit with some delistings, reflecting mixed investor sentiment.
Outlook for 2025:
Growth Prospects: With a projected GDP growth of 6%, the actual growth might be around 3.1% due to ongoing economic challenges like inflation and currency instability. Agriculture and construction sectors are seen as growth drivers, while banking and mining face uncertainties due to global and local economic conditions.
The ZSE market is expected to remain a hedge against currency depreciation, with selected blue-chip and mid-tier stocks likely to perform well. The VFEX's future performance hinges on maintaining foreign currency stability and adapting to new regulatory environments.