Zimbabwe investment ratio too low – UNCTAD

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Zim’s average investment ratio between 2000 and 2011 was below 15% of GDP, much lower than the minimum 25 percent to effectively fight poverty, UNCTAD has said in a report.

BULAWAYO – Zimbabwe’s average investment ratio between 2000 and 2011 was below 15 percent of Gross Domestic Product, much lower than the minimum 25 percent to effectively fight poverty, the United Nations Conference on Trade and Development (UNCTAD) has said in a report.

The report, titled Economic Development in Africa 2014 released on Thursday noted that Zimbabwe was among 11 other countries whose ratios were below the minimum threshold.

Other countries in the category include Angola, the Central African Republic, the Comoros, Cote d’Ivoire, Guinea-Bissau, Liberia, Libya, Nigeria, Sierra Leone, and Swaziland.

It said for these countries to make significant progress in reducing poverty they will have to sustain average growth rates of about seven percent and above in the medium to long-term, and this will require investment rates of 25 per cent of GDP and above.

The report noted that high investment rates in the range of 25 percent and above were rarely sustained in most African countries.

According to the report, over the past two decades, only a small set of countries in Africa have sustained investment rates of 25 percent and above. These are Algeria, Botswana, Cape Verde, the Congo, Equatorial Guinea, Guinea, Lesotho, Sao Tome and Principe, and Seychelles.

Equatorial Guinea exhibited “unusually high” investment rates with annual averages of 68 percent for 1990–1999 and 43 percent for 2000–2011. The report said investments in the continent have been curtailed by countries that failed to transform their economic visions into reality.

– The Source