Context

After suffering severe economic decline between 1998 and 2008, Zimbabwe’s adoption of a multicurrency regime in 2009 helped stabilise the economy. Economic growth is expected to improve to an estimated 2.6% in 2017 from 0.7% in 2016, driven by stronger performance in agriculture, mining, electricity, and water. Economic performance in 2018 is likely to be affected by political changes; real GDP growth is projected to be 1% in 2018 and 1.2% in 2019. The economy continues to face structural challenges from high informality, weak domestic demand, high public debt, weak investor confidence, and a challenging political environment.  22.5% of Zimbabwe’s population of 13 million lives in extreme poverty.

In addition to political instability and poor macroeconomic policies, Zimbabwe’s investment climate has been severely damaged by a lack of respect for the rule of law and a deteriorating business enabling environment. Key constraints have included a failure to protect property rights and forced “indigenisation” of businesses.  Limited access to capital is hampering the agricultural and agribusiness sectors as well as mining and manufacturing.

According to the African Development Bank economic growth is expected to improve to an estimated 2.6% in 2017 from 0.7% in 2016, driven by stronger performance in agriculture, mining, electricity, and water. Economic performance in 2018 is likely to be affected by political changes; real GDP growth is projected to be 1% in 2018 and 1.2% in 2019. The economy continues to face structural challenges from high informality, weak domestic demand, high public debt, weak investor confidence, and a challenging political environment. The country is experiencing a liquidity crisis, which is a manifestation of structural deficiencies and distortions in the economy. Progress was made in improving the business climate, but governance and accountability remain problematic.

BERF’s work in Zimbabwe

BERF has completed 4 assignments for DFID Zimbabwe

  1. Annual review of Business Enabling Environment Programme (BEEP). This included identifying future options for the possible extension of the Zimbisa component of the BEEP programme described above.  BERF Report entitled “Future options for Zimbisa, Report to DFID Zimbabwe” was completed April 2016.
  2. The second assignment undertaken by BERF to support the business case extension of the same Zimbisa component of BEEP by examining what works and what does not in PPD programming in Sub Saharan Africa. The BERF report entitled “Public-Private Dialogue Interventions in Sub-Saharan Africa: Lessons for Zimbisa” was completed in October 2016.
  3. A related assignment was undertaken to for an Evidence and Learning Note on Public Private Dialogue to provide a synthesis of the evidence to understand ‘PPD systems, approaches and mechanisms that are more conducive to Business Environment Reform and Investment climate programmes in Sub-Saharan Africa and politically fragile states’.
  4. An evidence and learning assignment has been completed on adaptive programming.  This collates relevant DFID experience adaptive programming from otehr countries and is of broader interest.

BERF remains actively engaged in discussion with BERF Zimbabwe about additional assignments.

BERF Zimbabwe Projects

 

  1. Zimbabwe – Public Private Dialogue Interventions: Lessons for Zimbisa,
  2. Zimbabwe Public Private Dialogue Reference Library
  3. Annual Review of Business Enabling Environment Programme
  4. Adaptive Programming and Business Environment Reform in Zimbabwe

 

World Bank Doing Business

The 2018 World Bank Doing Business overall ease of doing business ranking for Zimbabwe is 159 out of 190 countries, a slight increase over its 2017 ranking of 169. The Distance to Frontier score was 48.47 in 2018, slightly below the overall Sub-Saharan Africa average of 50.43 and well below Zambia’s 64.5, Botswana’s 64.9, Mozambique’s 64 and South Africa’s 64.9).

In 2018  Zimbabwe made starting a business easier by removing the obligation to advertise applications for a business license.  Zimbabwe improved access to credit information by launching a new credit registry. However, credit scoring was discontinued, reducing access to credit information.

DFID Zimbabwe Strategy

UK aid will tackle extreme poverty by providing a decent education to 70,000 girls and 40,000 boys; child protection services for 128,000 children at risk; family planning for 150,000 women; improved nutrition for over two million people; and better access to clean water for 2.5 million rural Zimbabweans.

UK aid will stand up for human rights and rule of law helping people to access legal advice, increasing the independence of the media, and making elections fairer.

UK aid will support economic development by supporting farmers, young Zimbabweans, and small and medium sized businesses to create jobs and employment. The UK will help make it easier and cheaper to do business in Zimbabwe.