“If you look at GDP growth between 1997 and 2008, Zimbabwe’s economy shrunk by over 50 per cent. Prior to that, Zimbabwe [grew] at an average rate of around six per cent. That period was obviously very difficult and very challenging,” Invictus Capital founder and managing director Ritesh Anand told CNBC Africa.
“Also during that period, [Zimbabwe] had the second highest rate of inflation in the history of the world. Since 2009, Zimbabwe has grown at an average rate of seven per cent. It’s probably been one of the fastest growing economies in Africa.”
2013 was however a good year for the Southern African nation, according to Invictus Securities, with industrial index growth among the highest in sub-Saharan Africa.
Last year was also a positive time period for Zimbabwe’s equities market, and continued positive performance of the country’s stock exchange since 2009 added to the strong figures.
In 2009, GDP plateaued at roughly three to four billion dollars. Since then, GDP has grown to around 11 billion dollars.
“Between 2009 and 2012, the market was really flat. The market was up 32 per cent in 2013, but if you look at our GDP, our market capitalisation to GDP ratio, it’s still very low, at around 30 per cent,” Anand explained.
Historically, the ratio has been as high as 70 per cent, and Anand believes that there is still more of an upside to be expected in Zimbabwe’s market.
Foreign interest also played a noteworthy role in how well the exchange managed to perform, and interest from foreign players continues to grow despite Zimbabwe’s indigenisation laws.
The Indigenisation and Economic Empowerment Act in Zimbabwe gives Zimbabweans the right to either take over or control foreign companies operating in the country.
“Foreign participation on our market has grown significantly since 2009. [Then], foreign participation was 17.7 per cent. That’s grown today to around 50 per cent. We expect that number to increase to around 60 per cent. If you look at [Zimbabwe] on a relative basis, [it’s] still a very attractive market,” said Anand.