Zimbabwe Country Risk Report

Published 27 May 2015 | Quarterly

  • 40 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
$1,195.00
Zimbabwe Country Risk Report

Core Views:

  • 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.

  • 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.

  • The Zimbabwean economy will remain near deflationary territory over the coming quarters thanks to weak demand, a depreciating South African rand, and lower oil prices.

Major Forecast Changes:

  • No major forecast changes.

Key Risks To Outlook:

  • The political environment presents the most salient risk to our outlook for the Zimbabwean economy. If ZANU-PF successfully re-engages with the international community and unlocks financing, our forecasts will be rendered too pessimistic. However, if political in-fighting leads to more hard-line tendencies it could squeeze the economy further.

  • Premature abandonment of the foreign currency regime would likely have a negative impact on the economy.

  • The weather is also a major risk. The country has seen several droughts over the last two decades which have had a devastating impact on the important agricultural sector and there is always a risk of a recurrence of poor rains.

Long-Term Macroeconomic Forecasts (Zimbabwe 2015-2024)
Indicator 2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f
National Sources/BMI
Nominal GDP, USDbn 14.1 14.9 16.0 17.0 18.5 20.3 22.3 24.5 27.0 29.7
Real GDP growth, % y-o-y 2.4 2.8 3.3 3.3 5.1 5.1 4.6 4.7 4.7 4.7
Population, mn 15.0 15.5 15.9 16.3 16.7 17.1 17.5 17.8 18.1
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Economic Downturn, ZANU-PF In-fighting Add to Political Uncertainty
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
9
Preparing For The Post-Mugabe Era
9
Chapter 2: Economic Outlook
15
SWOT Analysis
15
BMI Economic Risk Index
15
Economic Activity
16
Drought Prompts Growth Downgrade
16
TABLE: Economic Activit y
16
Fiscal Policy
18
Political Factors To Undermine Budget Consolidation
18
TABLE: Fiscal Polic y
18
Monetary Policy
19
Price Pressures To Remain Dormant
19
TABLE: Monetary Policy
20
Balance Of Payments
21
Structural Weakness At Heart Of External Imbalance
21
Chapter 3: 10-Year Forecast
23
The Zimbabwean Economy To 2024
23
Policy Risks To Constrain Long-Term GDP Growth
23
TABLE: Long -Term Macroeconomic Forecasts
23
Chapter 4: Operational Risk
25
SWOT Analysis
25
Operational Risk Index
25
Operational Risk
26
TABLE: Operational Risk
26
Legal Environment
27
TABLE: Sub -Saharan Africa - Legal Risks
28
Costs Of Labour
32
TABLE: Sub -Saharan Africa - Cost Of Labour
32
TABLE: Labour Market Regulations
33
Chapter 5: BMI Global Macro Outlook
35
Global Outlook
35
EMs Still Slowing
35
Table : Global Assumptions
35
Table : Developed States , Real GDP Growth , %
36
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
36
Table : Emerging Markets , Real GDP Growth, %
37

The Zimbabwe Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Zimbabwe. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Zimbabwe's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.

Key Uses

  • Forecast the pace and stability of Zimbabwe's economic and industry growth through end-2019.
  • Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
  • Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
  • Contextualise Zimbabwe's country risks against regional peers using BMI's country comparative Risk Index system.
  • Evaluate external threats to doing business in Zimbabwe, including currency volatility, the commodity price boom and protectionist policies.

The Zimbabwe Country Risk Report by BMI Research includes three major sections: Economic Outlook, Political Outlook and Operational Risk.

Economic Outlook:

How will the Zimbabwe' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Zimbabwe through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Zimbabwe Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

  • Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
  • BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

  • Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
  • Balance of Payments - trade and investment, current and capital account.
  • Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
  • Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
  • Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
  • Foreign Direct Investment - approvals, inflows and climate.
  • External Debt - debt profile (short and long-term plus public and private sector obligations).
  • Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.

Key Benefits

  • Rely upon BMI's 100% independent forecast scenarios for Zimbabwe and underlying assumptions - we take no advertising and are privately-owned.
  • Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Zimbabwe, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
  • Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.

Political Outlook:

What are the political risks to doing business in Zimbabwe over the next 5-years?

BMI's Zimbabwe country Risk Index evaluates the short- and medium-term threats to political stability.

Political Outlook Contents

  • SWOT Analysis for the Zimbabwe Market - Political Strengths, Weaknesses, Opportunities and Threats facing Zimbabwe.
  • Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Zimbabwe's risk are compared with regional and global averages.
  • Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
  • Long-Term Political Outlook BMI examines the structural risks to the stability of Zimbabwe’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.

Key Benefits

  • Benchmark Zimbabwe's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
  • Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
  • Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.

Operational Risk

What are the current operational risks and difficulties associated with doing business in Zimbabwe?

The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Zimbabwe against its neighbours.

Operational Risk Contents

The chapter provides a summary of the main threats in the country, within:

  • Labour Market Risk (Education; Availability of Labour; and Labour Costs)
  • Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
  • Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
  • Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).

The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:

  • Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
  • Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
  • Evaluate Zimbabwe’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.

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