Economy of Zimbabwe - AbsoluteAstronomy.com

The economy of Zimbabwe
Zimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...

has shrunk significantly after 2000, resulting in a desperate situation for the country and widespread poverty from among others 94% unemployment

Unemployment

Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...

. The participation from 1998 to 2002 in the war in the Democratic Republic of the Congo set the stage for this deterioration by draining the country for hundreds of millions of dollars. Hyperinflation

Hyperinflation

In economics, hyperinflation is inflation that is very high or out of control. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases...

has been a major problem from about 2003 to April 2009, when the country suspended its own currency. The economy deteriorated from one of Africa's strongest economies to the world's worst.

The country has reserves of metallurgical-grade chromite

Chromite

Chromite is an iron chromium oxide: FeCr2O4. It is an oxide mineral belonging to the spinel group. Magnesium can substitute for iron in variable amounts as it forms a solid solution with magnesiochromite ; substitution of aluminium occurs leading to hercynite .-Occurrence:Chromite is found in...

. Other commercial mineral deposits include coal

Coal

Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...

, asbestos

Asbestos

Asbestos is a set of six naturally occurring silicate minerals used commercially for their desirable physical properties. They all have in common their eponymous, asbestiform habit: long, thin fibrous crystals...

, copper

Copper

Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...

, nickel

Nickel

Nickel is a chemical element with the chemical symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel belongs to the transition metals and is hard and ductile...

, gold

Gold

Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. Chemically, gold is a...

, platinum

Platinum

Platinum is a chemical element with the chemical symbol Pt and an atomic number of 78. Its name is derived from the Spanish term platina del Pinto, which is literally translated into "little silver of the Pinto River." It is a dense, malleable, ductile, precious, gray-white transition metal...

and iron ore. Historically the country had farming and tourism as its other main industries.

Current economic conditions

Since 2000 the Zimbabwean government has taken most of the farmland previously used by commercial farmers (mostly white) and reallocated it. Due to bad publicity claiming that most of this land reform happened in a corrupt way and land went to politicians from ZANU-PF, military leaders or leaders in the police forces who account to less than 1,000 individuals, actually more than 100,000 blacks were resettled on land which was previously owned by few whites. These new farmers were usually inexperienced or uninterested in farming, and could not maintain the intensive, industrialized farming of the previous owners. Short term gains were often made by selling the farms equipment. The loss of agricultural expertise also triggered a loss of agricultural financing and market confidence which made recovery almost impossible. A considerable amount of this land has however gone to local people who use it mainly for subsistence farming

Subsistence agriculture

Subsistence agriculture is self-sufficiency farming in which the farmers focus on growing enough food to feed their families. The typical subsistence farm has a range of crops and animals needed by the family to eat and clothe themselves during the year. Planting decisions are made with an eye...

. Therefore production of staple food, such as maize has not suffered as much as typical export crops, such as tobacco or coffee. The previously large exports of tobacco, cotton, soya and horticultural produce have consequently reduced dramatically and the income derived from them lost to the national economy.

Government spending is 97.8% of GDP. It has partly been financed by printing money, which has led to hyperinflation

Hyperinflation

. State enterprises are strongly subsidized, taxes and tariffs are high. State regulation is costly to companies, starting or closing a business is slow and costly. Labor market is highly regulated, hiring a worker is cumbersome, firing a worker is difficult and unemployment has risen to 94% (at the end of 2008; the figure was 80% in 2005).

(See Heritage: Zimbabwe.)

Transportation

Zimbabwe has adequate internal transportation and electrical power networks, however maintenance has been neglected over several years. Paved roads link the major urban and industrial centers, and rail lines managed by the National Railways of Zimbabwe

National Railways of Zimbabwe

The National Railways of Zimbabwe is the parastatal railway of Zimbabwe. The Zimbabwe railway system was largely constructed during the time of British colonial rule, and part of it represents a segment of the Cape-Cairo railway...

tie it into an extensive central African railroad network with all its neighbours.

Energy

The Zimbabwe Electricity Supply Authority

Zimbabwe Electricity Supply Authority

Zimbabwe Electricity Supply Authority, officially called ZESA Holdings LTD., is a state-owned company whose task is to generate, transmit, and distribute electricity in Zimbabwe...

is responsible for providing the country with electrical energy. Zimbabwe has two larger facilities for the generation of electrical power, the Kariba Dam

Kariba Dam

The Kariba Dam is a hydroelectric dam in the Kariba Gorge of the Zambezi river basin between Zambia and Zimbabwe. It is one of the largest dams in the world, standing tall and long.- Construction :...

(owned together with Zambia) and since 1983 by large Hwange Thermal Power Station

Hwange Thermal Power Station

The Hwange Thermal Power Station is the biggest power plant in Zimbabwe with an installed capacity of 920 MW. The plant was built during the 1980s, its location was chosen because of its proximity to coal fields...

adjacent to the Hwange

Hwange

Hwange is a town in western Zimbabwe, in the province of Matabeleland North. It is named after the chieftain of Zwange, who is now called Chief Hwange. The town was known as Wankie until 1982. According to the 1992 Population Census, the town had a population of 42,581...

coal field. However, total generation capacity does not meet the demand leading to rolling blackout

Rolling blackout

A rolling blackout, also referred to as load shedding, is an intentionally-engineered electrical power outage where electricity delivery is stopped for non-overlapping periods of time over geographical regions. Rolling blackouts are a last-resort measure used by an electric utility company in order...

s. The Hwange station is not capable of using its full capacity due to old age and maintenance neglect. In 2006, crumbling infrastructure and lack of spare parts for generators and coal mining lead to Zimbabwe importing 40% of its power - 100 megawatts from the Democratic Republic of Congo, 200 megawatts from Mozambique

Mozambique

Mozambique, officially the Republic of Mozambique , is a country in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west and Swaziland and South Africa to the southwest...

, up to 450 from South Africa, and 300 megawatts from Zambia

Zambia

Zambia , officially the Republic of Zambia, is a landlocked country in Southern Africa. The neighbouring countries are the Democratic Republic of the Congo to the north, Tanzania to the north-east, Malawi to the east, Mozambique, Zimbabwe, Botswana and Namibia to the south, and Angola to the west....

. In May 2010 the country's generation power was an estimated 940MW against a peak demand of 2500MW. Use of local small scale generators

Engine-generator

An engine-generator is the combination of an electrical generator and an engine mounted together to form a single piece of equipment. This combination is also called an engine-generator set or a gen-set...

is widespread.

Telephone

The telephone service is problematic, and new lines are difficult to obtain. Cellular phone networks are an alternative. Principal mobile phone operators are Telecel

Orascom Telecom Holding

Orascom Telecom Holding S.A.E. is a leading international telecommunications company operating GSM networks in the Middle East, Africa, Canada and Asia. It started its operations in Egypt by launching the first egyptian mobile operator in 1998, ....

, Net*One and Econet Wireless

Econet Wireless

Econet Wireless is Zimbabwe's principal mobile or cell phone company and was established by the Zimbabwean businessman, Strive Masiyiwa. It is now the nation's largest cell phone network having captured 73.3% of the market share...

Agriculture

Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...

in Zimbawe can be divided into two parts: industrialized farming of crops such as cotton

Cotton

Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....

, tobacco

Tobacco

Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...

, coffee

Coffee

Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...

, peanuts

Peanuts

Peanuts is a syndicated daily and Sunday American comic strip written and illustrated by Charles M. Schulz, which ran from October 2, 1950, to February 13, 2000, continuing in reruns afterward...

and various fruits and subsistence farming with staple crops such as maize

Maize

Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...

or wheat

Wheat

Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...

. The former of the two was almost exclusively in the hands of the white minority until the highly controversial and disastrous land redistribution program

Land reform in Zimbabwe

Land reform in Zimbabwe officially began in 1979 with the signing of the Lancaster House Agreement, an effort to more equitably distribute land between the historically disenfranchised blacks and the minority-whites who ruled Zimbabwe from 1890 to 1979...

that started in 2000. This part of the agricultural economy was highly profitable and large amounts of the produce were exported. Subsistence farming is important for the black majority and has gained importance under the land redistribution program.

Industrialized farming was once the backbone of the domestic Zimbabwean economy and contributed up to 40% of the exported produce. The result of large scale eviction of competent commercial farmers, the government's land reform efforts and the severing of economic ties with Mozambique, means this is no longer the case.
Reliable crop estimates are no longer available since the agricultural marketing system collapsed. The Government banned maize imports, stating record crops for the year of 2004. The University of Zimbabwe estimated in 2008 that between 2000 and 2007 agricultural production decreased by 51%.

Maize

Maize

was the country's largest domestic crop prior to the farm evictions. Tobacco

Tobacco

Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...

was the largest export crop followed by cotton

Cotton

. Poor government has exacerbated meagre harvests caused by drought and floods, resulting in significant food shortfalls beginning in 2001. Land reform has found considerable support in Africa and a few supporters among African-American activists, but Jesse Jackson

Jesse Jackson

Jesse Louis Jackson, Sr. is an African-American civil rights activist and Baptist minister. He was a candidate for the Democratic presidential nomination in 1984 and 1988 and served as shadow senator for the District of Columbia from 1991 to 1997. He was the founder of both entities that merged to...

commented during a visit to South Africa in June 2006, "Land redistribution has long been a noble goal to achieve but it has to be done in a way that minimises trauma. The process has to attract investors rather than scare them away. What is required in Zimbabwe is democratic rule, democracy is lacking in the country and that is the major cause of this economic meltdown."

Mining sector

As other southern African countries, Zimbabwean soil is rich in raw materials. Namely platinum

Platinum

, coal

Coal

, iron ore, gold

Gold

and lately also diamonds have been found in considerable deposits. Also copper

Copper

, chromite

Chromite

and nickel

Nickel

deposits exist, though in lesser amounts. The Marange diamond fields

Marange diamond fields

The Marange diamond fields are an area of widespread small-scale diamond production in Chiadzwa, Mutare West, Zimbabwe. 'The hugely prolific Chiadzwa fields are regarded as the world's biggest diamond find in more than a century'...

, discovered in 2006 are thought to be among the richest in the world.

In March 2011, the government of Zimbabwe implemented laws which required local ownership of mining companies; following this news, there were falls in the share prices of companies with mines in Zimbabwe.

Gold production year	kg
1998	27,114
2007	7,017

Education

Zimbabwe has one of Africa's highest literacy

Literacy

Literacy has traditionally been described as the ability to read for knowledge, write coherently and think critically about printed material.Literacy represents the lifelong, intellectual process of gaining meaning from print...

rates at over 90%. The population is usually better educated than the African average, making the people one of the greatest assets of this country. The crisis since 2000 has however diminished these achievements because of general lack of resources and the exodus of teachers to other countries.

History

1980s

Following the Lancaster House Agreement

Lancaster House Agreement

The negotiations which led to the Lancaster House Agreement brought independence to Rhodesia following Ian Smith’s Unilateral Declaration of Independence in 1965. The Agreement covered the Independence Constitution, pre-independence arrangements, and a ceasefire...

in December 1979, the transition to majority rule in early 1980, and the lifting of sanctions, Zimbabwe enjoyed a brisk economic recovery. Real growth for 1980-1981 exceeded 20%. However, depressed foreign demand for the country's mineral exports and the onset of a drought cut sharply into the growth rate in 1982, 1983, and 1984. In 1985, the economy rebounded strongly due to a 30% jump in agricultural production. However it slumped in 1986 to a zero growth rate and registered negative of about minus 3% in 1987 primarily because of drought and foreign exchange crisis faced by the country. Zimbabwe's GDP grew on average by about 4.5% between 1980 and 1990.

2000–2009

In recent years, there has been considerable economic hardship in Zimbabwe. Many western countries argue that the Government of Zimbabwe's land reform program

Land reform in Zimbabwe

, recurrent interference with, and intimidation of the judiciary, as well as maintenance of unrealistic price controls and exchange rates has led to a sharp drop in investor confidence.

On 1 November 1989 a former government minister in Rhodesia

Rhodesia

Rhodesia , officially the Republic of Rhodesia from 1970, was an unrecognised state located in southern Africa that existed between 1965 and 1979 following its Unilateral Declaration of Independence from the United Kingdom on 11 November 1965...

, Denis Walker

Denis Walker

Wilfrid Denis Walker is a former Rhodesian cabinet minister resident in the United Kingdom. He is known for his monarchist activities and anti-communism and is also the Company Secretary, Director and Treasurer of the International Monarchist League and its UK subsidiary, the Constitutional...

, produced a paper in London for the Conservative Monday Club

Conservative Monday Club

The Conservative Monday Club is a British pressure group "on the right-wing" of the Conservative Party.-Overview:...

's Foreign Affairs Committee on Land Reform in Zimbabwe
Zimbabwe
Zimbabwe is a landlocked country located in the southern part of the African continent, between the Zambezi and Limpopo rivers. It is bordered by South Africa to the south, Botswana to the southwest, Zambia and a tip of Namibia to the northwest and Mozambique to the east. Zimbabwe has three...

. In his last paragraph he stated that "once the land has been redistributed, the commercial farms will be broken up, the remaining white farmers reduced by exile or imprisonment; Zimbabwe's government, already morally bankrupt, will decline towards economic collapse."

Between 2000 and December 2007, the national economy contracted by as much as 40%; inflation vaulted to over 66,000%, and there were persistent shortages of hard currency

Hard currency

Hard currency , in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value...

, fiat currency, fuel, medicine, and food. GDP per capita dropped by 40%, agricultural output dropped by 51% and industrial production dropped by 47%.

Direct foreign investment has all but evaporated however there is renewed activity in indirect investment via international partnerships with South Africa in particular. In 1998, direct foreign investment was US $400 million. In 2007, that number had fallen to US $30 million

How much money was spent in the country's involvement in the war

Second Congo War

The Second Congo War, also known as Coltan War and the Great War of Africa, began in August 1998 in the Democratic Republic of the Congo , and officially ended in July 2003 when the Transitional Government of the Democratic Republic of the Congo took power; however, hostilities continue to this...

in the Democratic Republic of the Congo

Democratic Republic of the Congo

The Democratic Republic of the Congo is a state located in Central Africa. It is the second largest country in Africa by area and the eleventh largest in the world...

has never been reported nor the benefits derived from the military's involvement in commercial mining in that country. Price controls have been imposed on a wide range of products including food (maize

Maize

, bread, steak), fuel, medicines, soap, electrical appliances, yarn, window frames, building sand, agricultural machinery, fertilisers and school textbooks.

The Mugabe Government attribute Zimbabwe's economic difficulties to sanctions imposed by the Western powers. It has been argued that the sanctions imposed by Britain, the US, and the EU have been designed to cripple the economy and the conditions of the Zimbabwean people in an attempt to overthrow President Mugabe's government. These countries on their side argue that the sanctions are tareted against Mugabe and his inner circle and some of the companies they own. Critics point to the so-called "Zimbabwe Democracy and Economic Recovery Act of 2001" ,signed by Bush, as an effort to undermine Zimbabwe's economy. Soon after the bill was signed, IMF cut off its resources to Zimbabwe. Financial institutions began withdrawing support for Zimbabwe. Terms of the sanctions made it such that all economic assistance would be structured in support of "democratisation, respect for human rights and the rule of law." The EU terminated its support for all projects in Zimbabwe. Because of the sanctions and US and EU foreign policy, none of Zimbabwe's debts have been cancelled as in other countries.

Other observers also point out how the asset freezes by the EU on people or companies associated with Zimbabwe's Government have had significant economic and social costs to Zimbabwe.

As of February 2004 Zimbabwe's foreign debt repayments ceased, resulting in compulsory suspension from the International Monetary Fund

International Monetary Fund

The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

(IMF). This, and the United Nations

United Nations

The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

World Food Programme

The World Food Programme is the food aid branch of the United Nations, and the world's largest humanitarian organization addressing hunger worldwide. WFP provides food, on average, to 90 million people per year, 58 million of whom are children...

stopping its food aid due to insufficient donations from the world community, has forced the government into borrowing from local sources.

Hyperinflation 2004-2009

Zimbabwe began experiencing severe foreign exchange shortages, exacerbated by the difference between the official rate and the black market rate in 2000. In 2004 a system of auctioning scarce foreign currency for importers was introduced, which temporarily led to a slight reduction in the foreign currency crisis, but by mid 2005 foreign currency shortages were once again chronic. The currency was devalued by the central bank twice, first to 9,000 to the US$, and then to 17,500 to the US$ on 20 July 2005, but at that date it was reported that that was only half the rate available on the black market.

In July 2005 Zimbabwe was reported to be appealing to the South African government for US$1 billion of emergency loans, but despite regular rumours that the idea was being discussed no substantial financial support has been publicly reported.

The official Zimbabwean dollar

Zimbabwean dollar

The Zimbabwean dollar was the official currency of Zimbabwe from 1980 to 12 April 2009....

exchange rate had been frozen at Z$101,196 per U.S. dollar since early 2006, but as of 27 July 2006 the parallel (black market) rate has reached Z$550,000 per U.S. dollar. By comparison, 10 years earlier, the rate of exchange was only Z$9.13 per USD.

In August 2006 the RBZ revalued the Zimbabwean Dollar by 1000 ZWD to 1 (revalued) dollar. At the same time Zimbabwe devalued the Zim Dollar by 60% against the USD. New official exchange rate revalued ZWD 250 per USD. The parallel market rate was about revalued ZWD 1,200 to 1,500 per USD (28 September 2006).

In November 2006 it was announced that sometime around 1 December there would be a further devaluation and that the official exchange rate would change to revalued ZWD 750 per USD. This never materialized. However, the parallel market immediately reacted to this news with the parallel rate falling to ZWD 2,000 per USD (18 November 2006) and by year end it had fallen to ZWD 3,000 per USD.

On 1 April 2007 the parallel market was asking ZWD 30,000 for $1 USD. By year end, it was down to about ZWD 2,000,000. On 18 January 2008, the Reserve Bank of Zimbabwe

Reserve Bank of Zimbabwe

The Reserve Bank of Zimbabwe is the central bank of Zimbabwe.-History:The bank traces its history to the Bank of Rhodesia and Nyasaland, founded in March 1956, which in turn was the successor to the Central Currency Board....

began to issue higher denomination ZWD bearer cheques (a banknote with an expiry date), including $10 million bearer cheques - each of which was worth less than US $1.35 (70p Sterling; 0.90 Euro) on the parallel market at the time of first issue. On 4 April 2008 the Reserve Bank of Zimbabwe

Reserve Bank of Zimbabwe

introduced new $25 million and $50 million bearer cheques. At the time of first issue they were worth US$0.70 & US$1.40 on the parallel market respectively.

On 1 May 2008, the RBZ announced that the dollar would be allowed to float in value subject to some conditions.

On 6 May 2008, the RBZ issued new $100 million and $250 million bearer cheques. At the date of first issue the $250 million bearer cheque was worth approximately US$1.30 on the parallel market. On 15 May 2008, a new $500 million bearer cheque was issued by the RBZ. At time of first issue it was worth US$1.93. In a widely unreported parallel move, on 15 May 2008, the RBZ issued three "special agro-cheques" with face values $5 billion (at time of first issue - $19.30), $25 billion ($96.50) & $50 billion ($193). It is further reported that the new agro-cheques can be used to buy any goods and services like the bearer cheques.

On 30 July 2008, the Governor of the RBZ, Gideon Gono

Gideon Gono

Gideon Gono is the current Governor of the Reserve Bank of Zimbabwe and former CEO of the Jewel Bank, formerly known as the Commercial Bank of Zimbabwe...

announced that the Zimbabwe dollar would be redenominated by removing 10 zeroes, with effect from 1 August 2008. ZWD10billion became 1 dollar after the redenomination.

More banknotes were issued since Gono vowed to continue printing money: $10,000 and $20,000 (29 September); $50,000(13 October); $100,000, $500,000 and $1 million(3 November); $10 million(2 December); $50 million and $100 million(4 December); $200 million (9 December); $500 million (11 December); $10 billion (19 December); $1 trillion (17 January 2009)

On February 2, 2009 a final denomination was implemented, cutting 12 zeroes, before the Zimbabwe dollar was officially abandoned on April 12, 2009.

Poverty and unemployment

Poverty and unemployment are both endemic in Zimbabwe, driven by the shrinking economy and hyper-inflation. Both unemployment and poverty rates run near 80%.

As of January 2006, the official poverty line was ZWD 17,200 per month (US$202). However, as of July 2008 this had risen to ZWD 13 Trillion per month (US $41.00) . Most general labourers are paid under ZWD 200 Billion (US 60c) per month. A nurse's salary in September was Z$12,542 (12 US cents), less than the cost of a soft drink.

The lowest 10% of Zimbabwe's population represent 1.97% of the economy, while the highest 10% make 40.42%. (1995). The current account balance of the country is negative, standing at around US -$517 million.

Government response

The 2007 Empowerment Bill to increase local ownership of economy was drafted for presentation to parliament in July 2007. It was signed into law by President Mugabe on 7 March 2008. The law requires all White or foreign owned business to hand over 51 percent of their business to indigenous Zimbabweans. Many economists predict this will plunge the country into deeper economic woes.

In response to inflation the government has introduced price controls

Price controls

Price controls are governmental impositions on the prices charged for goods and services in a market, usually intended to maintain the affordability of staple foods and goods, and to prevent price gouging during shortages, or, alternatively, to insure an income for providers of certain goods...

, but enforcement has been largely unsuccessful. Police have been sent in to enforce requirements that shopkeepers sell goods at a loss. This has resulted in hundreds of shop owners being arrested under accusations of not having lowered prices enough. Because of this, basic goods no longer appear on supermarket shelves and the supply of petrol is limited. This has diminished public transport. This has not been a significant problem during the term of Reid. However, goods can usually be purchased for a high rate on the black market.

In January 2010, Finance Minister Tendai Biti

Tendai Biti

Tendai Laxton Biti is a Zimbabwean politician. He is the Secretary-General of the Movement for Democratic Change political party and a member of Parliament for Harare East; currently he is the Minister of Finance of Zimbabwe.-Early life:Biti was born in Dzivarasekwa, Harare...

announced that Zimbabwe would seek highly indebted poor country (HIPC) status in order to cancel the country's $6 billion debt. Despite criticism from some government officials and economists, Biti stated that, among other strategies considered, seeking HIPC status was the best option. In addition to debt forgiveness, HIPC status (which is attained from the International Monetary Fund (IMF) and World Bank) would also allow Zimbabwe access to World Bank resources and loans through the IMF’s Poverty Reduction and Growth Facility.

The Government of National Unity

By the start of the 2009 the situation had been catastrophic for some time. The three parlamental parties agreed on a Government of National Unity. Despite serious internal differences this government made some important decisions that improved the general economic situation, first of all the suspension of the national currency, the Zimbabwean Dollar in April 2009. That stopped hyperinflation and made normal forms of business possible again, by using foreign currency such as the US American Dollar

United States dollar

The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....

, the South African Rand

South African rand

The rand is the currency of South Africa. It takes its name from the Witwatersrand , the ridge upon which Johannesburg is built and where most of South Africa's gold deposits were found. The rand has the symbol "R" and is subdivided into 100 cents, symbol "c"...

, the EUs Euro

Euro

The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

or the Botswana Pula

Botswana pula

The pula is the currency of Botswana. It has the ISO 4217 code BWP and is subdivided into 100 thebe. Pula literally means "rain" in Setswana, because rain is very scarce in Botswana - home to much of the Kalahari Desert - and therefore valuable. Pula also means "blessing" as rain is considered a...

. The finance minister Tendai Biti

Tendai Biti

(MDC-T

Movement for Democratic Change – Tsvangirai

The Movement for Democratic Change Zimbabwe is a political party and the largest party in the House of Assembly of Zimbabwe. It is the main formation formed from the split of the original Movement for Democratic Change in 2005.-Foundation:...

) tries to hold a disciplined budget. Zimbabwe recorded in 2009 an economic growth for the first time in a decade.

External links

https://www.cia.gov/library/publications/the-world-factbook/geos/zi.html

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.

Current economic conditions

Transportation

Energy

Telephone

Agriculture

Mining sector

Education

History

1980s

2000–2009

Hyperinflation 2004-2009

Poverty and unemployment

Government response

The Government of National Unity

See also

External links