World Bank warns business as usual not an option for Zimbabwe’s fragile economy – Nehanda Radio

HARARE – A new World Bank report has called for Zimbabwe to urgently bolster its resilience against climate-related shocks, emphasizing that “business as usual is not an option” for the nation’s economic stability.

The Zimbabwe Economic Update (ZEU), published on January 31, 2025, highlights the critical need for investments in climate adaptation and anticipatory actions, particularly within the agriculture sector.

The report, titled “Improving Resilience to Weather Shocks and Climate Change,” underscores the vulnerability of Zimbabwe’s economy, which heavily relies on rainfed agriculture, to increasingly frequent and intense climate events, particularly droughts linked to the El Niño-Southern Oscillation (ENSO).

Key findings from the report include that agriculture contributes significantly to Zimbabwe’s GDP, exports, and employment, making it a crucial sector susceptible to climate shocks.

The report further noted that El Niño events are intensifying, leading to more frequent and severe droughts. It is also asserted that climate change could erode up to 12% of Zimbabwe’s annual GDP if proactive measures are not taken.

The 2023/24 El Niño induced drought alone caused approximately US$363 million in damage losses.

“Business as usual is not an option with the cost of inaction high. Climate change could erode up to 12% of GDP annually, while the cost of adaptation is less than 1% of GDP. Every dollar invested in early, anticipatory measures saves up to US$16 in future costs.

“In the 2023/24 growing season, Zimbabwe experienced severe drought conditions attributed to El Niño.

“This resulted in a 60% decline in maize yield compared to the five-year average. The significant reduction in rainfall, coupled with high temperatures, has led to widespread food insecurity and economic hardship.

“The government’s ambitious target to boost agricultural output to US$12.5 billion is under threat due to these climate-induced challenges. Climate shocks disrupt GDP, trade balances, and fiscal stability.

“The 2023/24 El Niño-induced drought alone caused approximately US$363 million in damage losses. It resulted in a projected 3.2% drop in GDP, lowered export earnings, and widened the fiscal deficit by 0.9% of GDP. This is driven by both reduced revenue and higher government expenditures.

“Government revenue is expected to decline to 18.5% of GDP due to the slowdown in economic activity, compared to 19.2% in a no-drought scenario, and its expenditure is anticipated to rise to 20.9% of GDP, up from 20.6% in a no-drought scenario, primarily to fund food imports and increased salaries.”

The report has stressed the importance of shifting from current practices to a strategy that prioritises climate adaptation and anticipatory actions.

Dominick Revell de Waal, World Bank Senior Economist and co-author of the ZEU, stated: “This has made many Zimbabweans more vulnerable to variability in rainfall patterns.

“This growing trend highlights the urgent need for Zimbabwe to develop robust strategies to mitigate the adverse effects of these climate variations, and better insulate their negative impact on growth.”

The report noted the need to reorient public investment from agricultural subsidies to climate adaptation focused on research, irrigation, and landscape management.

The World Bank emphasised the necessity for Zimbabwe to adopt a dual approach, combining climate adaptation strategies with proactive measures based on forecasts and risk analysis.

The report also showed that the 2023/24 El Niño event caused major damage to the nation’s GDP and export abilities.

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