Overview

Zimbabwe has strong foundations for accelerating future economic growth and improving living standards. The economy has excellent human capital, comparable to that of upper-middle-income economies in Sub-Saharan Africa, although some skill shortages are emerging in some sectors.  Moreover, Zimbabwe possesses abundant mineral and natural resources that, if well managed, can support the country’s development objectives.

Development Challenges

Poverty reduction is constrained by structural factors like macroeconomic volatility, dependence on low-productivity agriculture, high correlation between weather shocks and agricultural production, and low coverage of social assistance programs.

The 2024 El Nino-induced drought is expected to be the worst in over 40 years, resulting in widespread crop failure, water resource depletion, and stress on pastures. The affected areas are home to almost half of the population, with over 40% of them experiencing food insecurity. Poor households, which spend about 48% of their total income on food, are hit hardest by reduced crop yields and increased prices. Consequently, many vulnerable households may fall below the poverty line. Additionally, the existing social assistance programs have limited coverage and effectiveness, which hinders their ability to alleviate the impact of such shocks.

Source: World Bank 2024