By Claude Harding
August 22, 2011
Zimbabwe’s real GDP growth for 2011 remains on target for 9.3%, said Grant Flanagan, fund manager at Pan-African financial services group Imara. “In our view this is conservative, but is easily one of the highest growth rates in Africa,” he added.
Flanagan said that after a good farming season, Zimbabwe could be at least 80% self-sufficient in food.
He is also optimistic about the mineral resources industry. “The mining sector . . . continues to steam ahead with gold production up 37.5% year on year. Platinum production was 61% of total 2010 production at the halfway stage.”
According to Imara’s investment researchers, companies operating in Zimbabwe have also posted strong mid-year results.
A first-quarter update by brewing company Delta showed 47% profit growth off 43% growth in revenue, with demand continuing to outstrip supply.
Farm equipment-maker Zimplow reported a 43% rise in first-half revenues, with the domestic market accounting for 84% of sales. Local demand was driven by strong agricultural commodity prices, in particular cotton, notes Flanagan.
A first-quarter update from food retailer OK showed year-on-year revenue growth of 59.8%.
“All this combines to provide positive reinforcement of the growth in domestic demand,” Flanagan said.
He noted that policy consistency might help Zimbabwe qualify for debt relief. “Various reforms are targeted, with a focus on health and education but without any change to previous policy.”