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(TALKZIMBABWE) Biti's growth figures challenged

Biti's growth figures challenged
By: TZG-Bloomberg
Posted: Wednesday, August 18, 2010 4:15 am

AN international asset management company executive has challenged Finance Minister Tendai Biti and the International Monetary Fund's growth projection figures for Zimbabwe saying they are severely undervalued.

Imara Asset Management Zimbabwe Chief Executive Officer John Legat said Zimbabwe’s economy may be double the size estimated by the IMF and Minister Biti. IMF estimates Zimbabwe's stock market’s value to be $5 billion. Mr Biti projected the country’s economic growth at US$5,1 billion from US$3,5 billion.

Mr Legat says these projections make Zimbabwe's stock market look “cheap” when it is not.

Zimbabwe's economy may be as big as $10 billion, compared with the IMF estimate of about $5 billion, Mr Legat said in an e-mailed statement to Bloomberg from the capital Harare.

“We find it hard to understand why both the IMF and government are being as cautious as they are,” Legat said.

“Their views give a sobering view of the country, rather than an upbeat and exciting outlook for a country barely in its second year of reform.”

Zimbabwe is rebuilding its economy after experiencing a decade of recession that followed a drought and sanctions imposed by the Britain, the United States and their Western allies.

Imara’s estimate of the Zimbabwean economy’s size is based on a comparison of spending power in neighboring Zambia, Legat said.

While Zambia’s two biggest breweries reported sales of $230 million last year, revenue at Delta Corp., Zimbabwe’s biggest beer maker, totaled $324 million, he said.

This year, Econet Wireless, a Zimbabwean mobile-phone operator, expects revenue of $500 million, while Zambians are expected to spend $280 million with Zain Zambia, that country’s biggest mobile-phone company, Legat said.

Bigger Economy

Some measures suggest that Zimbabwe’s agriculture, tourism and manufacturing industries are also bigger than in Zambia, which has a $14 billion economy, he said.

“According to the IMF and the government, Zimbabwe’s gross national product per capita is $450, which compares with Zambia at $1,200 per head,” Legat said. “Spending patterns in both countries suggest the opposite.”

Imara estimates that Zimbabwe’s market capitalization may double as investors take advantage of the opportunities offered by the domestic stock market.

Imara Asset Management is a unit of Gaborone, Botswana- based Imara Holdings Ltd.

Labels: GDP ZIMBABWE, IMF, JOHN LEGAT, TENDAI BITI

posted by MrK @ 5:13 PM