Staff Writer
The World Bank says the cost of inaction on climate change could erode up to 12% of Zimbabwe’s gross domestic product (GDP) annually.
In its latest Zimbabwe Economic Update, the World Bank emphasises the urgent need for proactive climate adaptation measures, highlighting that every dollar invested in early interventions could save up to $16 in future costs.
“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,” the World Bank said.
In the 2023/24 growing season, Zimbabwe experienced severe drought conditions attributed to El Niño, resulting 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 World Bank said the government’s ambitious target to boost agricultural output to $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 $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,” the World Bank said.
“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 Bank said this cycle of drought and recovery undermines sustainable development and exacerbates poverty levels, making it imperative to enhance the resilience of the agricultural sector.
“To strengthen Zimbabwe’s resilience to weather shocks and climate change, a dual approach is essential, involving substantial investment in climate adaptation and the enhancement of anticipatory actions,” World Bank Senior Agriculture Specialist and co-author of the report Easther Chigumira said.
The lender added that climate adaptation focuses on medium-to-long-term planning to build resilience to current and future weather shocks, while anticipatory actions aim to mitigate the humanitarian impact of climate hazards through proactive measures based on forecasts and risk analysis.
The bank recommended investment in climate mitigation, highlighting that in the short-term, there is an opportunity to re-orient public investment from agricultural subsidy programs to investment in climate adaptation focused on research and extension services, irrigation, and landscape/watershed management.
The World Bank also recommended strengthening of anticipatory action.
“In the short term, priority lies with improving the early warning system and the social protection system, while in the medium term, these could be enhanced through a climate fund and a scaled-up harmonised social cash transfer program,” the bank said.
To enhance early warning and disaster response systems, the World Bank said Zimbabwe should finalise the Disaster Risk Management legislation and continue strengthening the National Social Registry to improve targeting, enhance coordination, and reduce duplication in social protection efforts.
In the medium term, the bank said there are significant benefits to progressively scaling up the harmonised social cash transfer program, in order to cover all vulnerable people.
