Zimbabwe has historically been one of the most robust economies in southern Africa, with substantial natural resources and a highly regarded workforce. The performance of the Zimbabwean economy will remain inextricably linked to the policy and political climate over the coming years. Zimbabwe’s government is gradually beginning to re-engage with the international development community.
We keep our clients informed of the latest market moves and political developments in Zimbabwe, as part of our 'top-down' and 'bottom-up' perspective. Clients also benefit from in-depth analysis on 12 of Zimbabwe’s most important industries. We provide interactive data and forecasting alongside detailed and risk-assessed analysis from our expert research teams. Our aim is to keep you ahead of the game, so you can do business with ease in Zimbabwe.
Zimbabwe Country Risk
Real GDP growth will improve slightly in 2016, as gold production increases on the back of stronger prices. That being said, poor weather will continue to weigh on economic activity and crop production and electricity generation, keeping growth low at 1.1%.
Further progress in Zimbabwe's efforts to re-establish itself with international lenders will be largely dependent on political considerations, as the expected increase in political instability associated with President Robert Mugabe's succession will encourage populist measures. However, a slow recovery in commodity prices will offer a strong incentive for the government to rein in spending.
Inflationary pressures will return to the Zimbabwean economy before year-end 2016, on the back of an increase in the money supply as a result of the government's...
Zimbabwe Operational Risk Coverage (9)
Zimbabwe Operational Risk
Zimbabwe Operational Risk
BMI View: Zimbabwe's economic crisis and political isolation has contributed to a marked deterioration in the country's business environment over the past 15 years. In particular, businesses face a myriad of risks stemming from corruption and a large bureaucratic burden, which lowers the country's competitiveness relative to its southern African neighbours, such as Zambia and, to a greater extent, South Africa. Other salient threats include poor access to utilities, notably water and power, as well as insecure property rights for foreign businesses. Moreover, the quality of Zimbabwe's health care sector has declined considerably over the last several decades, thereby contributing to poor health within the labour force. As a result, the country receives a score of 34.7 out of 100 for Operational Risk, ranking 27th out of 48 states in Sub-Saharan...
Zimbabwe Crime & Security
Zimbabwe Crime & Security
BMI View: Crime and Security Risk is the lowest area of risk in the Operational Risk environment for investors and businesses in Zimbabwe. Zimbabwe offers a safer operating environment than most Sub-Saharan African (SSA) states, as the country enjoys stable relations with its neighbours, is not a target of international terrorist groups and has comparatively low levels of violent crime. The main security risk to investors in Zimbabwe stems from the threat of political violence which tends to flare up around election periods. Current succession battles within the ruling party, ZANU-PF have contributed negatively to political stability in Zimbabwe, and we have seen a premature spike in political violence with different factions engaging in clashes countrywide in 2015. While foreign workers and travellers are exposed to petty theft and burglaries, crime affecting businesses such as cyber and financial crime is low. As a...
Zimbabwe Labour Market
Zimbabwe Labour Market
BMI View: Zimbabwe's labour market cannot compete with its regional peers owing to low levels of productivity, public health issues and the residual effects from the economic collapse and hyperinflation during the mid-2000s. Although Zimbabwe has a favourable demographic situation, with more than 60% of the population younger than 24, the country has proved incapable of turning its population into skilled workers, and we see no sign of this situation improving over the medium term. Taking these factors into consideration, BMI awards Zimbabwe a score of 36.9 out of 100 for Labour Market Risk, placing the country 29th in Sub-Saharan Africa (SSA), between Cote d'Ivoire...
BMI View: Zimbabwe has a limited and low-quality transport network. With a lack of access to maritime trade flows and the added stress placed on an ailing road and rail network, Zimbabwe's reliance on its neighbouring countries for efficient trade poses a threat to investors. Additionally, movement of goods is hampered by lengthy bureaucracy and relatively expensive trade procedures, creating additional costs for businesses. Although the country presents well in terms of its market size, due to steady economic growth following years of decline, the country is at risk from adverse affects of its current trade deficit and expensive fuel costs, compromising the success of business operations in the country.
Zimbabwe scores 33.6 out of 100 in the BMI Logistics Risk Index,...
Zimbabwe Trade & Investment
Zimbabwe Trade & Investment
BMI View: The combination of endemic corruption, weak rule of law, caps on foreign investment and a lack of its own currency serve to make Zimbabwe an unattractive operating environment for foreign firms. Corruption in particular poses a major obstacle to foreign investment and participation in the economy by lowering the accountability and impartiality of the judicial system, incurring adverse consequences for important procedures such as the filing and paying of taxes, the resolution of contractual disputes and the registration of property. Intellectual property rights are also poorly enforced, raising the probability of financial losses due to copyright violations and piracy. Taking these factors into consideration, BMI awards Zimbabwe a score of 22.9 out of 100 for overall Trade and Investment Risk, placing the country 45th out...
Zimbabwe Industry Coverage (12)
BMI View: We expect Zimbabwe to remain a net corn importer over the longer term. Over the next five years, we expect production of the grain to demonstrate moderate growth, although production will remain well below the totals seen in the early 2000s and much of the growth will be in the form of a recovery. We are more optimistic regarding the sugar sector, where access to key markets and potential for productivity improvements will drive production over the long term. Although we forecast a domestic sugar market...
BMI View: We maintain our view that a challenging macroeconomic environment will translate into a contraction of 22.9% in vehicle sales in 2016. Over the year, a liquidity crisis and tight lending conditions will limit demand for passenger vehicles, while weak growth in the construction sector will lead to a fall in investment into new commercial vehicles.
|Vehicle Sales To Continue Struggling|
Zimbabwe Commercial Banking
|Date||Total assets||Client loans||Bond portfolio||Other||Liabilities and capital||Capital||Client deposits...|
Food & Drink
Zimbabwe Food & Drink
BMI View : Zimbabwe's food and drink industry will continue to decline due to soft domestic demand, food shortages and a booming informal food and drink sector. We do not expect to see a recovery in Zimbabwe's food and drink industry over our forecast period as the country continues to navigate a tough economic climate. We forecast Zimbabwe's real GDP to grow at 1.1% in 2016, barely recovering from the recession the country entered in 2015. Despite downward pressure on prices, the mass grocery retail sector is set to grow at a subdued rate, driven by aggressive price competition in the sector and the entrance of new players.
Headline Industry Data (...
BMI View: Zimbabwe's construction industry remains highly risky for investors, poorly financed and subject to the policies of President Robert Mugabe, which have resulted in a very poor business environment. Zimbabwe is keen to encourage foreign investment. However, so far China remains the only actor making inroads into the country - into the power and mining sectors.
We expect weak growth in the Zimbabwe construction industry as high risks, poor financing availability and dim growth prospects ward off investment, outside...
BMI View: With annual average growth rates of over 10%, we have a positive long-term outlook for Zimbabwe's insurance sector. While we are mindful of the wider economic issues presently faced by Zimbabwe, both markets will see particularly strong growth prospects from 2018 onwards, which should provide fruitful opportunities for increased investment and new market entries. Especially in the smaller and more fragmented non-life market, we expect to see some degree of consolidation as new entrants may seek to establish a rapid presence by acquiring smaller incumbents.
BMI View: Zimbabwe's mining industry will grow steadily in absolute terms over our forecast period through to 2019 as production increases across the key platinum and diamond mining sub-sectors. However, we note a number of potential downside risks on the horizon, including falling mineral prices and an uncertain political and regulatory climate.
Pharmaceuticals & Healthcare
Zimbabwe Pharmaceuticals & Healthcare
BMI View: Zimbabwe's ongoing economic crisis is continuing to take a toll on the country's pharmaceutical and healthcare sector. Severely underfunded public healthcare services and high poverty levels have made access to formal treatments difficult, with many turning to traditional healers instead. Despite government pledges to improve healthcare access in recent years, we have yet to see any substantial developments, with the country still heavily reliant on international aid for essential medicines. Further issues including a high abundance of counterfeit drugs and political instability make Zimbabwe one of the least attractive markets in the region for multinational drugmakers.
BMI View: Zimbabwe's power crisis will worsen throughout 2016 as prolonged periods of low rainfall decreases the country's hydropower capacity. Struggling to pay for the cost of importing will also add to the country's power shortage woes.
BMI View : BMI 's Southern Africa report analyses the latest industry, regulatory and macroeconomic developments in the telecoms markets in Angola, Botswana, Mozambique, Mauritius and Namibia. It also contains our estimates based on the latest market data and updated five-year forecasts to 2020 for the mobile, fixed-line and broadband sectors. From the five states, Mauritius and Mozambique stand out as dynamic and higher performing markets in terms of penetration and 3G/4G developments along with growth rates.
Latest Updates & Industry Developments
Important downward revisions were made to Angola's...
BMI View: Zimbabwe's market is due to undergo some significant changes in the near future, with the government having acquired a controlling stake in the underperforming operator Telecel. To the upside, however, there are reports on a MNVO operator potentially entering the market in March 2016, which would add competition. Both Zimbabwean and Zambian mobile markets are set to benefit from tower sharing arrangements, which will enable operators to cut costs and expand to underserved areas, which should consequently boost mobile growth.
Latest Updates & Industry...
BMI View: Zimbabwe's tourism sector is expected to go through a slump in 2016, highly influenced by a 15% VAT on tourist accommodation. Regional arrivals are expected to decrease through the forecast period as travel becomes relatively more expensive, while overseas arrivals are forecast to increase. Even though Zimbabwe has high potential to become a tourist hub through its vast attractions, hindrance is caused by unsophisticated travel routes, poor infrastructure and adverse policies deterring international investments.