The economic structure and development of Zimbabwe


Zimbabwe, a landlocked state in Southern Africa, has passed through extremums and troughs of public presentation and effectivity since the morning of colonialism and provides an interesting survey for a development issue. The state, one time described as the breadbasket of Africa, is now go throughing through a critical economic depression mostly due to hapless economic policies and bad political leading. Zimbabwe ‘s economic system is in ruins with hyperinflation and unemployment at around 80 per cent ( BBC, 2009 ) . Millions of Zimbabweans are in desperate demand of nutrient and the state ‘s substructures and establishments are in shambles. This is non all ; a bulk of big population is unemployed and owing to this, many Zimbabweans have fled Zimbabwe in hunt for a new rental of life. Zimbabwe ‘s kids are blighted by the highest mortality, undernourishment and stunted growing of all sub-Saharan part states. Cases of HIV/AIDS, TB and other deathly diseases are non uncommon. Over and above, poorness in Zimbabwe remains well high and permeant and 1000000s of Zimbabweans continue to populate lives of want and adversity merely to clinch it all.

Political Influences

Since 1980, Mugabe has ruled Zimbabwe but his reign has been spoiled by many political spat, force and tenseness coupled with a tapering economic public presentation. For illustration, the resistance parties have ever disputed the elections that happen in the Zimbabwe as undemocratic. This has particularly been true as evidenced by the disputed elections in March 2002 and the late conducted elections. Led by chief resistance leader, Morgan Tsvangirai, the resistance has ever taken a swipe at Mugabe ‘s leading but this has yielded no fruitful consequences. Possibly, after seeing that Mugabe is taking more clip to retire than expected and wanted, Tsvangirai has now joined a authorities of national integrity with Mugabe with an purpose of reconstructing the old glorification that Zimbabwe used to take delectation. However, the jobs faced by Zimbabwe still remain big and turning.

Economic History

The economic history of Zimbabwe is every bit old as the state ‘s history itself. As already mentioned, many Whites started to trek to Zimbabwe after detecting that it offered an tremendous potency for economic development with her minerals. Zimbabwe is an of import manufacturer of coal, gold, Ni and other valuable minerals. Possibly reference must be made here that Zimbabwe was besides used as an administrative capital for the federation. This offered Zimbabwe a immense chance to thrive since other states were being used as labour militias for her. Since clip immemorial, commercial agribusiness has been the anchor of Zimbabwe ‘s economic system. Furthermore, the agribusiness sector is the largest employer in Zimbabwe. The state ‘s main agricultural exports include beef, java, tea, flower, veggies, fruits, maize and baccy. It should besides be noted that the fabrication sector in Zimbabwe is amongst Africa ‘s largest ( see figure 4 ) .

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Throughout the 1980s, the economic system performed highly good which led the Central authorities outgo to treble and increase its portion from 32.5 per centum of GDP in 1979 to 44.6 % in 1989. However, this did non last long because the economic system nosedived after 1989 due to a figure of grounds and this led to the acceptance of the Economic Structural Adjustment Programmes ( ESAP ) . By and large, these steps were inter alia intended to better resource allotment, addition efficiency, spread out growing potency and enhance resiliency dazes ( World Bank, 1994:267 ) . However, despite these reforms, the Zimbabwe ‘s economic blues continued during the 1990s. Possibly, this was due to ( 1992, 1993, and 1995 ) drouths which to a great extent impacted on agribusiness. Other factors such as the 1998 Mugabe ‘s intercession in the civil war in the Democratic Republic of the Congo ( Kinshasa ) -purportedly to protect his personal investments-resulted in suspension of international economic assistance for Zimbabwe. This suspension of assistance and the 1000000s of dollars spent to step in in the war farther weakened Zimbabwe ‘s already troubled economic system.

Economic Performance

It is of import to observe that the economic system of Zimbabwe has plummeted over the past old ages. The crisis has been mostly attributed to economic misdirection, hapless administration, and loss of support from the international community, all compounded by periods of drouth. The prostration was triggered by the authorities ‘s determination in 1997 to disregard financial restraints in doing big payments to veterans of the Independence battle. Then, in the aftermath of political reverses in 1998, the authorities announced the ictus of white-owned farms, which exacerbated the instability.

Using the buying power para ( PPP ) method of ciphering the GDP, Zimbabwe ‘s per capita income in 2006 was $ 2, 437-a bead of more than 23 per cent since 1998. Furthermore, the GDP declined by 30 % from 1998 through 2003, and fell another 5.2 % in 2004 ( Townsend and Copson, 2005:1 ) ( See figure 1 ) . In an economic system characterized by worsening per capita income, hyperinflation, high unemployment, deficits of nutrient, fuel and foreign currency, it is non a surprise that poorness degrees are highly dismaying. For illustration, the 2003 Zimbabwe ‘s Poverty Assessment estimated that 72 per cent of the population lives below the poorness line. This is 17 per cent point higher than the figure of 1995 which was at 55 per cent. As a point of involvement, this was worse than the highly highest rate of Zambia which was at 68.0 in 2004.

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The economic crisis has brought with it terrible deficits in nutrient and other necessities. Between 2002 and 2004, an norm of 47.0 per cent of the population could non make full their minimal dietetic ingestion demands. This is due to a combination of an inauspicious conditions conditions, deteriorating irrigation system, and the loss of service sector support in rural countries due to the closing of large-scale commercial farms. Harmonizing to World Food Programme, more than 4 million Zimbabweans face nutrient deficits today ( hypertext transfer protocol: / country=716 ) .

Zimbabwe ‘s Challenges and Opportunities

Possibly, one major challenge stultifying Zimbabwe is political instability. It does non necessitate deep cognition to feel the nexus between political stableness and economic development. There can ne’er be development in a state where there is political agitation. Sadly, in Zimbabwe, there has been political instability in the state marked by political force, apprehension of resistance politicians, human rights militants, journalists and university pupils. Furthermore, the elections that have happened in Zimbabwe in recent old ages have ever been disputed as the resistance parties have claimed that they have been rigged. A instance in point being the late conducted elections where the resistance leader Morgan Tsvangirai refused to contend reasoning that the elections were marred by force and bullying ( BBC News, 2009 ) .

There is an undemocratic statute law called the Non Governmental Organisation Bill which was passed in July 2004 ( Townsend and Copson, 2005:4 ) . The measure prohibits foreign non authorities organisations ( NGOs ) from operating in Zimbabwe if their chief aims include issues of administration, which in bend include the publicity and protection of human rights. Domestic NGOs are prohibited from accepting foreign financess for transporting out activities affecting issues of administration. All NGOs are required to register with the authorities, and a council is established with broad powers to look into and modulate NGOs.

Another major challenge being faced by Zimbabwe is the suspension of foreign developmental assistance by the international community. Several international fiscal establishments such as the International Monetary Fund, World Bank and major givers such as United States of America and the United Kingdom suspended their assistance as a consequence of hapless administration and Zimbabwe ‘s disrespectful of human rights.

Furthermore, HIV/AIDS is besides another serious and turning challenge that has beset Zimbabwe. For illustration, about 25 per cent of the Zimbabwean grownup population is HIV positive ( Townsend and Copson, 2005:3 ) . This has resulted in the decrease of life anticipation as several Zimbabweans have been shoved to the grave. Other challenges as already stated in this essay include macro-economic instability, hyperinflation, deficit of fuel and turning poorness and increased inequality.

However, all is non lost. Despite these challenges, the chances for an economic recovery seem to be at that place. The economic system has late stabilized possibly thanks to the formation of the authorities of national integrity between two political challengers, Mugabe and Tsvangirai. Additionally, the pursuit of other new economic policies, such as the backdown of the worthless Zimbabwean Dollar from circulation early this twelvemonth, is besides take a breathing a new life into the economic system which had battled the universe ‘s record whipping rising prices ( usage of foreign currency was besides legalized ) ( BBC News, 2009 ) .

Finally, it should be noted that late the Zimbabwean economic system has been projected to turn by 3.7 per cent this twelvemonth, harmonizing to the IMF in its latest edition of the World Economic Outlook published in September 2009 ( BBC News, 2009 ) . The study forecast that growing in the Southern African state ‘s GDP would speed up to 6 per cent in 2010. Furthermore, consumer rising prices would average 9 per cent this twelvemonth entirely and lift to an norm of 12 per cent in 2010. The fund farther estimates that the state ‘s current history shortage which is at 21.4 per cent would contract to 19.9 per cent come following twelvemonth.


Zimbabwe ‘s economic construction is one in which they are basically self-sufficing and trade merely for net income or for consumer goods. Besides they perform trade with many spouses with no individual spouse consisting earning more than 15 % of import or export goods. By structuring the Zimbabwe ‘s economic system in a manner that keeps its spouses diversified and its imports non-strategic, Mugabe has successfully led his state to the way of development. The barriers left to full development are rather minimum compared to the 1s already dominated ; the construction of Zimbabwe ‘s economic system is genuinely a theoretical account of economic development.