Our comprehensive assessment of Zimbabwe's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Zimbabwe, as well as the latest industry developments that could impact Zimbabwe's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Zimbabwe before your competitors.

Country Risk

Zimbabwe Country Risk

BMI View:

Core Views:

  • The political emergence of President Robert Mugabe's wife Grace undermines Vice President Joice Mujuru's leadership ambitions. A clearer picture of the ongoing power struggle will emerge after the ruling ZANU-PF party holds its congress in December.

  • Zimbabwean economic growth will remain constrained by political risk, policy uncertainty, low commodity prices and a depreciating South African rand. A clear mandate for a reformist regime following the December ZANU-PF conference presents upside risks to our 2015 real GDP growth forecast of 2.7%.

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

Major Forecast Changes:

  • No major...

To read the full article Register for Free or Login

Zimbabwe Operational Risk Coverage (9)

Zimbabwe Operational Risk

BMI View:

Zimbabwe's business environment has deteriorated markedly in recent years, which will be a headwind to economic performance over the medium term at least. Corruption will continue to pose a serious challenge to many companies doing business in the country, though large multinationals have appeared able to ward off intervention from the authorities to date. Property rights are likely to remain extremely insecure, particularly for foreign firms who are facing an uncertain indigenisation drive. In addition, labour market health has seen an alarming decline, and many basic public services including water and power are still unreliable.

Zimbabwe's business environment has many weaknesses, including endemic corruption, unreliable public services and a crumbling transport network. Nevertheless, foreign players are drawn in by the country's mining opportunities. Political...

To read the full article Register for Free or Login

Zimbabwe Crime & Security

BMI View:

Businesses and foreign workers in Zimbabwe benefit from a safer environment than in most other Sub-Saharan African countries, with relatively low crime rates, a negligible threat from domestic or international terrorism, and a secure strategic environment. Nevertheless, we highlight that political violence during presidential elections remains an issue, particularly in Harare, and corruption seriously hinders the response of the police services to crimes. Zimbabwe performs well overall in the Sub-Saharan Africa (SSA) region in the BMI Crime and Security Risk Index, with a score of 47.0 out of 100 placing the country 12th out of 44 states. Thus, in terms of Crime and Security Risk, Zimbabwe trails four of its neighbouring countries, Namibia (2 nd), Botswana (3 rd), South Africa (5 th) and Zambia (7 th), and is ahead of only Mozambique (23 rd).

Increasing regional integration and a lack of...

To read the full article Register for Free or Login

Zimbabwe Labour Market

BMI View:

Zimbabwe's labour market cannot compete with its regional peers owing to low levels of productivity, public health issues, and the residual effects from the economic collapse and hyperinflation during the mid-2000s. Although Zimbabwe has a favourable demographic situation, with more than 60% of the population younger than 24, the country has proved incapable of turning its population into skilled workers, and we see no sign of this situation improving over the medium term. Taking these factors into consideration, BMI awards Zimbabwe a score of 34.1 out of 100 for Labour Market Risk, placing the country 20 th in Sub-Saharan Africa (SSA), between Burundi and Cote d'Ivoire.

Zimbabwe enforces comparatively high national minimum wages across the majority of sectors in the economy, which leads to an unproductive labour force in relation to wages. In addition, extensive regulations surround the contracting of...

To read the full article Register for Free or Login

Zimbabwe Logistics

BMI View:

Zimbabwe has a limited and low quality transport network, with a lack of access to maritime tradeflows and the added stress placed on an ailing road and rail network, Zimbabwe's reliance on its neighbouring countries for efficient trade poses a threat to investors. Additionally, movement of goods is hampered by lengthy bureaucracy and relatively expensive trade procedures, creating additional costs for businesses. Although the country presents well in terms of its market size, due to steady economic growth following years of decline, the country is at risk from adverse affects of its current trade deficit and expensive fuel costs, compromising the success of business operations in the country.

Zimbabwe scores 35.6 out of 100 in the BMI Logistics Risk Index, placing the country in 22 nd position out of 44 countries in the Sub-Saharan Africa region. This puts Zimbabwe behind neighbouring countries South Africa...

To read the full article Register for Free or Login

Zimbabwe Trade & Investment

BMI View:

The combination of endemic corruption, weak rule of law, caps on foreign investment and a lack of its own currency serve to make Zimbabwe an unattractive operating environment for foreign firms. Corruption in particular poses a major obstacle to foreign investment and participation in the economy by lowering the accountability and impartiality of the judicial system, incurring adverse consequences for important procedures such as the filing and paying of taxes, the resolution of contractual disputes and the registration of property. Intellectual property rights and ICT laws are also poorly enforced, raising the probability of financial losses due to copyright violations and piracy. Taking these factors into consideration, BMI awards Zimbabwe a score of 32.1 out of 100 for overall Trade and Investment Risk, placing the country 26th out of 44 states in Sub-Saharan Africa (SSA).

Although heightened legal risk profiles are...

To read the full article Register for Free or Login

Zimbabwe Industry Coverage (12)

Agribusiness

Zimbabwe Agribusiness

BMI View:

BMI View: Although we have revised up our corn production forecasts for t he 2013/14 season, w e expect Zimbabwe to remain a net corn importer over the longer term . Over the next five years , we expect production of the grain to demonstrate   moderate growth , although this will partly be due to base effects ,   and production will remain well below the totals seen in the early 2000s . We are more optimistic regarding the sugar sector, where access to key markets and potential for productivity improvements will drive productio...

To read the full article Register for Free or Login

Autos

Zimbabwe Autos

BMI View:

We expect another vehicle sales decline of 3.0% in 2014 following news from the Motor Industry Association of Zimbabwe, while developments in the latter months of the year will pose a threat to sales over the remainder of our forecast period to 2018. Chief among these is the import tariffs, which are set to be introduced in November and will impact sales for the last month of the year and beyond.

From November, tariffs of 40% and 60% will be applied to imports of single-cab and double-cab trucks respectively, while buses will also be subject to tariffs. Impacting the car segment is the mandate that the government buy only vehicles assembled by Willowvale Mazda Motor Industries, or Quest Motor, as a move to support the local production industry.

The government's plans to encourage domestic vehicle assembly are positive in terms of supporting the country's autos industry....

To read the full article Register for Free or Login

Commercial Banking

Zimbabwe Commercial Banking

BMI View:

...
Commercial Banking Sector Indicators 
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

To read the full article Register for Free or Login

Food & Drink

Zimbabwe Food & Drink

BMI View:

BMI View : We believe private consumption will be an important engine of growth in the years ahead. Although the relative stasis of the manufacturing industry has constrained job creation, consumption in Zimbabwe has continued to be supported by massive remittance inflows from a large diaspora population, and this is unlikely to change. Consumption will therefore be supported even in the absence of an improvement in domestic productivity.

Private consumption will be one of the more resilient components of GDP, supported by large remittance inflows from the many Zimbabweans living abroad. Furthermore, one of the upsides of the tight liquidity conditions is that inflation will remain low - price growth came in at 0.9% in September 2013 and we are forecasting that it will remain below 4.0% in 2014. These low...

To read the full article Register for Free or Login

Infrastructure

Zimbabwe Infrastructure

BMI View:

Zimbabwe's construction sector   is impeded by p olitical   uncertainty that continues to dissuade   investors . Despite vast resources , the country's construction industry remains weak compared with regional peers ,   as average growth over the forecast period (2014-2023) will be just 3.29%. C ash - rich Chinese companies have been the main fore ign...

To read the full article Register for Free or Login

Insurance

Zimbabwe Insurance

BMI View:

BMI View: The insurance industry has grown rapidly in recent years, with gross premiums up from USD111mn in 2010 to over USD500mn by 2014. The pace of expansion will slow, but remain in excess of 16-17% over the next five-years. Life insurance will, marginally, outperform the non-life sector, but the most prominent growth area will be credit/financial risk insurance. Motor cover will remain the non-life sector's largest line by some margin , accounting for over 40% of all non-life premiums. All insurance companies, in both life and non-life business, face risks from the country's wider economic and political woes.

Zimbabwe's life insurance sector has been one of the fastest growing not only in the region, but globally over the past five years. From an extremely low base of just USD34mn in 2009, gross premiums reached USD282mn in 2014 and will...

To read the full article Register for Free or Login

Mining

Zimbabwe Mining

BMI View:

BMI View:   Zimbabwe will achieve solid mining sector growth over our forecast period to 2018. Platinum production will be the main driver of growth, while growth in diamond output will be moderate and the country will remain a very small producer of gold. Weak global commodity prices and a deteriorating business environment will present downside risk to our forecasts. 

Zimbabwe is richly endowed with deposits of chrome, gold, nickel, diamonds and platinum, among other minerals. Its gold reserves are among the largest in Africa, while it has the world's second-largest platinum reserves. Diamond reserves are measured to be the second-largest globally after...

To read the full article Register for Free or Login

Pharmaceuticals & Healthcare

Zimbabwe Pharmaceuticals & Healthcare

BMI View:

BMI View: The World Health Organization's approval of a quality control laboratory for medicines in Zimbabwe is a positive step for the country's pharmaceutical market. It will help to reduce the proportion of counterfeit medicines in circulation and increase the country's attractiveness to multinational drugmakers. Nevertheless, for the foreseeable future the dire economic and political outlook, reduced healthcare budget and underdeveloped local manufacturing industry will continue to limit investment.

Headline Expenditure Projections

  • Pharmaceuticals: USD378mn in 2013 to USD388mn in 2014; +2.8% in US dollar terms. Forecast revised up from last quarter's projections to better suit current market conditions.

Risk/Reward Index

...

To read the full article Register for Free or Login

Power

Zimbabwe Power

BMI View:

BMI View:   The outlook for Zimbabwe ' s power sector is moderate , but market opportunities for private investors are limited. On the upside, a number of major projects will boost generation to 15.7TWh by 2023 up from 8.2TWh in 2014, mainly by exploiting coal and hydropower. This will be underpinned by a steady rise in demand for electricity, from   1 2.9 TWh to 21.4TWh over the 10-year timeframe, as the economy and population grows. However, the operating environment will remain extremely challenging.

A major obstacle will be the absence of a regulatory framework which allows for private...

To read the full article Register for Free or Login

Telecommunications

Zimbabwe Telecommunications

BMI View:

BMI View :  BMI's Q 4 14 Southern Africa report analyses the latest industry, regulatory and macroeconomic developments in the telecoms markets in Angola, Botswana, Mozambique, Mauritius and Namibia. It also contains analysis of the latest market data relating to the end of June 2014   a nd an update of   our five-year forecasts to 2018 for the mobile, fixed-...

To read the full article Register for Free or Login

Zimbabwe Telecommunications

BMI View:

BMI View:  The mobile markets in Zambia and Zimbabwe will witness strong growth of mobile data services on the back of network development by the operators, improved international connectivity and the proliferation of low-cost smartphones. However, the growth in the wireline sectors of both countries will be tempered by underinvestment in network infrastructure development, partly due to a lack of competition, and continued fixed-to-mobile substitution. Our five-year growth forecast, through to 2018, for the telecoms markets in Zambia and Zimbabwe expects the broadband sector to record the fastest growth, driven by wireless access technologies. 

Key data

  • The mobile markets in Zambia and Zimbabwe contracted by 2.5% quarter-on-quarter (q-o-q) and 1.2% q-o-q in Q214, mainly due to the disconnection of inactive and unregistered SIMs

    ...

To read the full article Register for Free or Login

Tourism

Zimbabwe Tourism

BMI View:

BMI View : The Zimbabwe tourism report examines a range of key indicators in this fledgling Sub-Saharan Africa tourism destination. We expect to see healthy growth in both inbound and outbound travel as Zimbabwe improves its international travel connections and raises its profile on the global tourism stage. Benefiting from a wide range of tourist attractions, the country has a lot to offer potential visitors and businesses, though restriction on foreign ownership may deter investors.

Zimbabwe has a large range of attractions to entice potential visitors, including the world famous Victoria Falls and a further four UNESCO World Heritage Sites. With several major national parks, Zimbabwe is set to develop itself as a safari and adventure holiday destination and could eventually compete with more established holiday destinations in the region such as South Africa. As it improves its marketing...

To read the full article Register for Free or Login