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
Growing signs of internal divisions in the ruling ZANU-PF adds to existing uncertainty over the future of politics in Zimbabwe once 91-year-old President Robert Mugabe retires or dies. Against this backdrop, a worsening economic climate will put added pressure on government stability.
The deflationary conditions that Zimbabwe has been experiencing for the past two years will persist through 2016 due to subdued domestic demand, a weak South African rand and weak international commodity prices.
Political and policy uncertainty will continue to deter much-needed investment into the moribund Zimbabwean economy, while a weak harvest, depreciating South African rand, and lower commodity prices will also weigh on short-term economic activity.
We estimate that the Zimbabwean economy slipped into...
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 2016 will see another year of contraction in the autos market due to the poor economic outlook for the country, caused by low commodity prices, weak domestic demand and subdued levels of foreign investment.
|Vehicle Sales To Continue Struggling|
|e/f = BMI estimate/forecast. Source: BMI, ZIMSTAT|
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: The country's construction industry remains high risk, poorly financed and subject to the policies of President Robert Mugabe, which have resulted in a poor business environment. Zimbabwe is keen to encourage foreign investment, with China so far leading inroads into the country's power and mining sectors. However, other investors have yet to follow.
We forecast weak growth in the Zimbabwe construction industry as high risks, poor financing availability and dim growth prospects ward off investment, outside of Chinese state-sponsored projects.
As such, we forecast 2.1% real growth for 2016 and an annual average growth of 2.4% over our ten-year forecast period to 2025....
BMI View: We have a positive long-term outlook for Zimbabwe's insurance sector, with double-digit growth rates from 2018 onwards in both major market segments. In both life and non-life markets, these growth prospects provide ample opportunities for future investment by potential new market entrants. The fragmented non-life insurance in particular, may see growth in market entries, through acquisitions of smaller incumbents, while life insurance is more likely to see new (foreign) players entering through organic routes. In spite of our positive view, we are mindful that wider economic issues may hamper growth over the foreseeable future.
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 health sector will deteriorate over the short term as a result of significant cuts to national budget allocations. Despite the distribution to healthcare growing over the last seven years, it remains far from meeting the global commitment agreed in Abuja in 2001 of 15% of the national budget. Government revenue earning capabilities have declined as Zimbabwe's main exports are suffering from lower commodity prices, as well as diminishing taxable income from stagnant economic growth. This will negatively affect Zimbabwe's healthcare delivery over the short term. Over the long term, continued reliance on foreign aid will discourage investment from drugmakers.
Headline Expenditure Projections
Pharmaceuticals: USD380mn in 2015 to USD399mn...
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 industry possesses many areas of national beauty, with extensive safari options and the Victoria Falls, but ultimately, it falls well short of its potential. Poor transport infrastructure, reduced air routes into the country, security concerns, and restrictive foreign investment and ownership rules, all combine to restrict the country from attracting inbound arrivals from a wider range of high value source markets. Heavily reliant on tourism from neighbouring powerhouse South Africa, the decline of commodity prices and the depreciation of the Rand leave Zimbabwe heavily exposed if South African demand for international travel falls. Despite natural tourism resources, Zimbabwe has a considerable amount to do before it can realise its potential....