Research - Other Reports

Monetary Policy Statement mid term review 2012

Written by EFE Research

2014 EQUITIES OUTLOOK

Written by EFE Research

FY2017 Review and Outlook -08.01.2018

Written by EFE Research

YEARLY REPORT -2024-01-23

In this paper, we endeavour to put our views and expectations on the socio-economic landscape for Zimbabwe in 2024, building on the base of established of the same in the preceding year. The socio-political situation remains complex following the 2023 harmonized elections, which saw the ruling ZANU PF party secure a resounding victory and President Emmerson Mnangagwa re-elected. However, the main opposition CCC did not contest the results through the court process but only through utterances and social media as they continue to face internal discord. After CCC recalls, ZANU PF was able to gain a twothirds parliamentary majority in subsequent by-elections. Looking ahead to 2024, Zimbabwe faces mounting economic pressures from drought, inflation, and foreign exchange volatility that could ignite social spending demands amidst low disposable incomes and weak economic activity. However, the government has limited fiscal space to respond to the high social need due to high debt levels. Attracting foreign direct investment will be critical to provide budget support. In 2023, Zimbabwe's economy contended with currency instability, rising inflation that peaked over 50%, power shortages, declining industrial capacity utilization and weak aggregate demand. Exports provided some respite, rising 12% while agriculture posted good harvests. However, imports also swelled, widening the trade deficit gap. Mining output fell due to policy changes and lower commodity prices. The local currency depreciated significantly, public debt remained elevated at US$17.7 billion, and the budget deficit reached ZWL1.4 trillion.

Written by EFE Research

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.

Written by EFE Research