Sub Saharan Africa

Zimbabwe

Last updated: 19 June 2009

Country information

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ECONOMY

GDP: 1.96 bn USD (2008 estimate)
GDP growth: -12.6% (2008 estimate)
Inflation: Estimated at 500 billion% in September 2008 but dollarisation of the economy in early 2009 has stemmed inflation.
Major Industries: Agriculture, manufacturing, mining.
Major trading partners: South Africa, China.

In spite of having once had a well-developed infrastructure and financial systems, Zimbabwe's economy has declined rapidly since the late 1990s as a direct result of the poor governance of the Mugabe regime. GDP has fallen by half since 1998. All sectors of the economy have been affected, especially agriculture. According to the IMF, the economy contracted by 14.1% in 2008 but is expected to expand by 2.8% in 2009. Budget revenue in 2008 was $133 million, while donors gave $670 million in aid. Electricity is severely restricted and there are frequent water shortages. Unemployment is reportedly around 94%. Life expectancy – at 37 for men and 34 for women - is the lowest in the world. HIV/AIDS kills an average of 50 people a day. Agriculture is the most important sector of the economy, but has been severely disrupted by land resettlement. This has led to a collapse in investor confidence and the flight of capital. Agricultural production has shrunk by over 50% since 1996 and there will be no commercial grain crop in 2009. Violent farm invasions continue while half the population is now receiving food aid. Zimbabwe was suspended from voting at the IMF as a consequence of its non-compliance with obligations under the Fund’s Articles of Agreement and its failure to co-operate with the Fund on policy advice. This is an issue the international community may review as part of a package of measures to support and encourage economic reform.

Zimbabwe does not receive loans from the IMF or World Bank because of its failure to repay arrears to both institutions. However, an IMF mission recently visited Zimbabwe following the creation of the inclusive government and the appointment of Tendai Biti as Finance Minister. Discussions are continuing, particularly on technical assistance.

The IMF and Zimbabwe