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Auxilia Katongomara, Chronicle Reporter
ZIMBABWE’S economic growth prospects are positive, the World Bank has said in its latest economic update.

According to the bank’s Zimbabwe Economic Update (ZEU), the agricultural sector is projected to return to its long-term growth trend after 2017.

The bank said favourable rains during the 2016/17 agricultural season are expected to drive a robust recovery, and the agricultural sector is projected to make a sizeable contribution to the Gross Domestic Product (GDP) growth this year.

It said improving weather conditions will be complemented by the ongoing suspension of import duties on some fertiliser products through the end of this year and by the ongoing allocation of underutilised land managed by ARDA and other Government agencies to experienced farmers.

The bank also said the Government’s Command Agriculture programme is projected to boost agricultural output.

“Zimbabwe’s long-term growth prospects are strong. Zimbabwe possesses substantial human and natural resources, and it continues to spend more on education as a share of GDP than any other country in Sub-Saharan Africa. Continued growth in agriculture and mining could boost other sectors through backward and forward linkages. Moreover, investors could leverage Zimbabwe’s well-educated workforce to expand non-traditional service exports. Though Zimbabwe’s infrastructure has deteriorated in recent years, a lower risk premium on international credit could facilitate access to capital and help to revive major industries,” said the bank.

It said the mining sector is expected to continue growing, even though it will remain vulnerable to macro-economic conditions.

Chrome and diamonds, the bank said, are expected to drive growth in the mining sector following the removal of an export ban on unprocessed chrome and the anticipated resolution of lawsuits that are keeping some diamond mines closed.

“Gold production, which accounts for half of the mining sector’s foreign-exchange earnings, is expected to increase by 10 percent, and global gold prices are projected to remain broadly stable,” it said.

The bank said the manufacturing sector requires investment and access to imports.

It said the introduction of bond notes in November last year have eased liquidity challenges.

“However, further issues of bond notes will need to be carefully monitored to contain inflationary pressures,” the bank said.

It said the GDP growth rate is expected to recover to 2,8 percent in 2017, though medium-term projections remain relatively modest.

Favourable rains and a revitalised agriculture sector are expected to underpin GDP growth in 2017.

However, the incomplete implementation of fiscal-adjustment policies and structural reforms, and the possibility that a rising money supply will boost inflation, are likely to dampen Zimbabwe’s medium-term growth outlook, said the bank.

@AuxiliaK