Zimbabwe’s recently announced a $44.4 billion size economy. From an official $35.2 billion. That’s an inconceivable 26.14% annual growth! An incredibly unfathomable number by any measure!
So, what lies behind this eye-popping figure? At first glance, Zimbabwe appears to have pulled off an economic miracle, defying decades of hyperinflation, and isolation. Yet, as with many things in Zimbabwe, the truth is less triumphant than the headline. The bulk of this growth stems not from a sudden burst of productivity but from a statistical sleight of hand known as GDP rebasing, with real economic gains playing a supporting, albeit modest, role.
That is not a bad thing. Just that the trumpet was blown a tad too loudly.
To understand Zimbabwe’s economic trajectory, one must dissect this interplay of rebasing and the four pillars of GDP - consumption, investment, government spending, and net exports - then ask whether this newfound optimism is built on sand or stone.
The Rebasing Effect: A Statistical Windfall
The lion’s share of Zimbabwe’s GDP jump, some US$8.18 billion (of the US$9.2 billion increase) comes from rebasing, a technical exercise that recalibrates how GDP is measured. Conducted by the Zimbabwe National Statistics Agency (ZimStat) with data from the 2023 Economic Census, rebasing updated the base, or reference, year from 2019 and then incorporated previously untracked economic activities, particularly in the informal sector, which accounts for 76.1% of businesses and 98.4% of establishments being small or micro-scale.
The introduction of the Zimbabwe Gold (ZiG) currency in April 2024 further reshaped exchange rate calculations, blowing wind into the sails of nominal GDP figures. This statistical adjustment alone accounts for 88.9% of the 2024 GDP increase, dwarfing the 11.1% (US$1.02 billion) attributed to real economic growth at a reported 2.9%.
Rebasing is not unique to Zimbabwe. Many African economies, from Nigeria to Kenya, have used it to capture structural shifts, often revealing larger economies than previously thought. Nigeria’s 2014 rebasing, for instance, nearly doubled its GDP overnight, vaulting it to Africa’s largest economy. In Zimbabwe’s case, the exercise highlights the informal sector’s outsized role - a necessity in a country where formal employment is scarce. Manufacturing, now contributing 15% to GDP, also gained prominence in the rebased figures. Very commendable.
Yet, rebasing does not create new wealth. The US$8.18 billion added by rebasing reflects activity that was always there, just uncounted. For Zimbabweans, whose average civil servant earns a paltry US$270 a month, well below the poverty line, this statistical windfall changes very little. At least in the short term.
The headline GDP figure may dazzle investors or policymakers, but it masks persistent structural woes: high poverty rates, crumbling infrastructure, a small operational headroom with over 45% of revenue going to human capital costs, and a currency that, despite the ZiG’s relative stability, remains fragile after years of “testing” economic environment.
Real Growth: A Modest but Promising Pulse
Then there’s the remaining US$1.02 billion. It is still a respectable 11.1% of the total GDP growth figure. It stems from real economic growth of 2.9% in 2024, with an anticipated growth above 6% in 2025. It is driven by the four GDP components: Consumption (C), Investment (I), Government Spending (G), and Net Exports (NX).
Consumption (C): Household and public consumption are key drivers, with private consumption projected to grow by 6.5% and public consumption by 6.3% in 2025, trends that likely began in 2024. A 290% surge in food crop production, driven by favourable weather and government direct support to farming, has boosted rural incomes and urban food supply. This agricultural boom, Zimbabwe’s maize output hit record levels, and so has tobacco recently, to mention but a few, have fuelled household spending, particularly in rural areas where 70% of the population resides. Still, low wages and high costs keep consumption constrained.
Investment (I): Both private (5.6% growth) and public investment (6.3% growth) are rising, spurred by foreign interest in Zimbabwe’s mineral wealth. Gold, lithium, and platinum mining projects have attracted investors from China and the Middle East, while domestic efforts to rehabilitate irrigation systems, road networks and power infrastructure all signal public investment’s role. The government’s push for a better business climate, including tax incentives and reduced bureaucratic hurdles, has helped, though risks and currency volatility persist.
Government Spending (G): Fiscal discipline has kept government spending in check, with only 35.5% of the ZiG276.4 billion 2025 budget (20.1% of GDP) spent by mid-year so far. Capital expenditure of ZiG23.6 billion on dams, roads, and schools complements recurrent spending. However, Zimbabwe’s debt at 86% of GDP limits fiscal firepower, and public-sector wages remain contentious, with strikes looming. With the rebasing as well it means the revenue collection ratio, surmising it stays the same, drops to a measly 14% of GDP!
Net Exports (NX): Exports are a bright spot, with earnings rising 15.6% to US$3.86 billion in the first half of 2025, a trend likely present in 2024. Gold exports soared 93%, driven by high global prices and new mining operations, while agricultural exports also grew. A current account surplus of US$621.7 million reflects imports lowering below exports, and that manufacturing has soared higher than even mining to 15% of GDP partly explains this. Yet, reliance on raw commodities exports leaves Zimbabwe open to global price swings.
The 2025 Outlook: Building on a Higher Base
Zimbabwe’s 6% GDP growth forecast for 2025, building on the rebased US$44.4 billion base, suggests the economy is gaining traction. Agriculture, projected to grow by 12.3%, remains the linchpin. Mining should sustain export growth, while manufacturing and construction benefit from infrastructure spending. Consumption and investment will continue to rise, though structural constraints like power shortages and high borrowing costs persist.
It thus must be acknowledged that the rebased GDP sets a higher bar. The 6% growth equals roughly US$2.66 billion in added output, far less than 2024’s rebasing effect. The 2025 budget aims to balance growth and stability, but currency depreciation, commodity volatility, and political uncertainty ahead of the 2028 elections are risks.
Broader Implications: Mirage or Momentum?
Zimbabwe’s GDP surge invites comparisons with other African economies that have used rebasing to signal economic potential. Nigeria and Ghana saw investment spikes post-rebasing, as a larger GDP signaled scale and opportunity. Zimbabwe too may attract more capital, particularly in mining and agriculture, if it sustains reforms. The ZiG’s stability offers a foundation, though its peg to gold and reserves is untested.
Yet, the disconnect between GDP and living standards is stark. With 40% of Zimbabweans below the poverty line, the rebased GDP does little for the average citizen. Power outages - sometimes lasting 18 hours - hamper industry. The informal sector’s dominance reflects a lack of formal jobs rather than entrepreneurial vibrance. Moreover, Zimbabwe’s external debt of US$13 billion and arrears to creditors block access to fresh financing.
A Cautious Path Forward
Zimbabwe’s 26.14% GDP increase in 2024 is a tale of two forces: a statistical recalibration that added US$8.18 billion (88.9%) and real growth of US$1.02 billion (11.1%). The rebasing highlights the informal sector’s role and the limits of formal structures. Real growth, from agriculture and mining, offers hope, but structural challenges remain.
For policymakers, the challenge is to turn statistical gains into tangible progress. Sustaining growth while diversifying into value-added industries is critical. Fiscal discipline must combine with investment in power, transport, and education. For investors, Zimbabwe’s mineral wealth is alluring, but political and currency risks demand caution. For ordinary citizens, the GDP figure is a distant abstraction - what matters are jobs, wages, stability.
The 2025 outlook suggests momentum, but Zimbabwe’s economic story remains one of potential tempered by fragility. The US$44.4 billion economy is no mirage - it exists, on paper and in fields and mines - but turning it into prosperity will require more than a statistical sleight of hand, and loud trumpets.