Zimbabwe now 5th largest economy in Sadc

Zimbabwe has become the fifth-largest economy in Southern Africa following a major upward revision of its Gross Domestic Product (GDP), reflecting the inclusion of previously unrecorded economic activities—particularly those in the informal sector and emerging enterprises established after 2019.

According to findings from the 2023 Economic Census conducted by the Zimbabwe National Statistics Agency (Zimstat), the country's GDP has been rebased to ZiG168.5 trillion, equivalent to US$44.4 billion, up from the earlier estimate of ZiG133.7 trillion (US$35.2 billion). The revision elevates Zimbabwe's economic position within the 16-member Southern African Development Community (SADC), trailing only South Africa (US$400 billion), Angola (US$115 billion), Tanzania (US$80 billion), and the Democratic Republic of Congo (US$71 billion), based on 2024 International Monetary Fund (IMF) projections.

The rebasing process involved updating GDP figures to better capture the country's current economic structure. This includes a broader assessment of informal trading, small-to-medium enterprises, and new business entities that were previously overlooked in national accounts. The revised data not only reveals a more comprehensive picture of Zimbabwe's economic activity but also points to years of understated growth.

Speaking at a post-Cabinet media briefing on Tuesday, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the revision brings into focus parts of the economy that had operated outside formal measurement systems. "There is a part of the economy that was not accounted for; this now captures that segment, which has been growing silently," he said. "We still believe that there is a lot that was left out because of the informality aspect, so we need to keep refining our methodology."

GDP is the most widely used indicator of a country's economic performance. For citizens, a higher GDP often translates into more jobs, stronger public infrastructure, and greater government capacity to provide essential services. According to Minister Ncube, the revised GDP will not immediately change government spending plans, but it opens room to widen the tax base and improve fiscal performance.

"In terms of expenditure, we are not going to change that at all because we have already committed to certain projects," he said. "But what we need to figure out is how to grow tax revenues from this extra GDP."

Minister Ncube also clarified that Zimbabwe does not face a debt sustainability crisis, but rather a liquidity constraint. The expanded GDP base, he said, provides new potential for managing external debt obligations and increasing fiscal flexibility. "Given this larger GDP base, it creates more opportunity and capacity to start servicing our external debt," he explained.

The government is also accelerating efforts to formalise the informal sector and expand digital platforms to improve tax compliance and revenue mobilisation. "We are bringing new systems for further digitalisation of the economy so that we can bring in all the players in the formal sector," said Ncube.

He acknowledged ongoing inequality in the economy, noting that addressing it requires a mix of progressive taxation and targeted social protection. "It is never easy to deal with inequality, but the way you do it is to use the taxation system, the rich pay more than the poorer income class," he said. "Also use different ways such as social protection programmes to uplift those who are at the bottom of the pyramid."

Following the revision, Zimbabwe's Gross National Income (GNI) per capita rose from US$2,259 to US$2,859 in 2023 and is projected to surpass US$3,000 by 2025. This growth in income per person reflects stronger economic productivity and signals the country's gradual progression towards middle-income status.

The revised GDP figures come at a time when Zimbabwe is undergoing major economic reforms, including currency stabilisation under the Zimbabwe Gold (ZiG) regime, investment in infrastructure, and policies aimed at boosting formal sector growth.