'Peaceful polls key to economic growth'

HARARE - A peaceful election could help Zimbabwe attain a 9,5 percent economic growth rate in 2014, a financial advisory firm says.

Market observers say the country’s economic recovery that began in 2009 following the formation of the inclusive government by long-time rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai, and adoption of a multi-currency regime appears to be slowing down due to uncertainty in the economy.

The country is expected to hold a watershed election this year but, the dates are yet to be announced, worsening the uncertainty.

Invictus Capital (Invictus) says while Zimbabwe remains on the path to sustainable economic growth due to improvement in the macro-economic conditions over the last three years, there is need to restore investor confidence.

“Much has been achieved in recent years but, much more needs to be done,” said Invictus in a report entitled 2013 equity market strategy outlook adding that improving the business climate is necessary to strengthen competitiveness, build investor confidence, and boost Zimbabwe’s growth potential.

Invictus said regardless of the outcome of elections the new government will have to adopt a more investor friendly approach in order to raise much needed capital for expansion and job creation.

“We, nevertheless, believe that the forthcoming elections, expected to take place in July 2013, will be the catalyst for more robust growth in 2014. We estimate real gross domestic product (GDP) growth of circa 9,5 percent in 2014 and 9,4 percent in 2015,” said Invictus.

Despite Zimbabwe’s trade balance continuing to deteriorate with the trade deficit expected to reach $3,4 billion in 2012 or 30 percent of GDP, the stockbroking firm remains upbeat that it will be reduced in the short term.

Export revenues in the country have grown from $1,6 billion in 2009 to $5,1 billion in 2012 while imports have grown from $3,2 billion to $8,2 billion over the same period.

“We expect the trade deficit to narrow over the next three years as exports revenues especially from the mineral sector continues to expand while demand for imports slows,” said Invictus.

Other economic experts have however, warned that a violent election with contestable outcome might reverse the economic gains of the last four years. Greatest risk to Zimbabwe’s economy remains a violent and contested election.

“A repeat of the bloody presidential run-off election of 2008 would collapse the nascent foundation we have built over the last three years,” he said.

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