The economy would need to grow at an astounding 27 percent per year, to expand to $100 billion in eight years.
Zimbabwe’s economy has, in recent years, achieved double-digit growth. This was off a low base, following the end of a decade-long recession in 2009, when former President Robert Mugabe set up a power-sharing government with the opposition, a move which saw Biti assuming the Finance minister’s role.
A less complex, if less precise but generally accepted, method to project growth is the rule of 70.
The rule of 70 is used to estimate the number of years it takes for a certain variable to double. To estimate the number of years for a variable to double, the number 70 is divided by the growth rate of the variable.
Therefore, using Biti’s 8 percent growth rate, it would take nine years for Zimbabwe’s GDP to grow to $30 billion, which is double the economy’s current size.
Conclusion:
Biti’s claim that an MDC Alliance government would build a $100 billion economy in eight years, at an annual growth rate of 8 percent, is premised on erroneous calculations.
It would require a growth rate of 27 percent to build the current GDP to the levels envisaged by the former finance minister. Alternatively, it would take 25 years, at 8 percent growth, for Zimbabwe’s current GDP to reach $100 billion.
By Nelson Banya for Zimfact
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