Economic and Political Overview

flag Zimbabwe Zimbabwe: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

Despite currency instability and high inflation, economic activity in Zimbabwe demonstrates resilience. GDP growth was projected at 5.3% in 2023, driven by expansion in agriculture and mining, as well as foreign currency inflows and remittances supporting domestic trade and services. However, growth is anticipated to slow to around 3.25% in 2024, partly due to the effects of drought on agriculture production and decreased commodity prices. These factors are anticipated to impact foreign currency inflows, but remittances should remain robust, and the current account is forecasted to have a small surplus (IMF).

In 2023, local-currency (ZWL) instability escalated: the official exchange rate depreciated by roughly 95%, while the disparity with the parallel market rate remained substantial, exceeding 30%. The 2023 National Budget revealed an overall deficit of ZWL 336.8 billion, equivalent to 1.5% of the gross domestic product, with financing needs totaling ZWL 575.5 billion, covering loan amortization and Government securities at ZWL 248.6 billion. In response to the economy's inflationary pressures, peaking between May and June 2023, adjustments were made to the macroeconomic fiscal framework, resulting in a nominal widening of the budget deficit to ZWL 3.6 trillion and a revision of the borrowing strategy. From January to September 2023, the Government successfully raised ZWL 305.9 billion through the issuance of Treasury bills, surpassing the revised borrowing target of approximately ZWL 276.3 billion (official governmental figures). The Ministry of Finance anticipates that Zimbabwe's budget deficit will conclude the 2024 year at 1.2% of GDP. Concerning public debt, the Public Debt Management Office (PDMO) disclosed that the total public and publicly guaranteed (PPG) debt increased marginally by 0.6% annually, reaching USD 17.7 billion as of the end of September 2023, up from USD 17.6 billion in September 2022. Of the total PPG debt stock in September 2023, 72% (USD 12.7 billion) was acquired externally, while 28% (USD 5 billion) was obtained from the domestic market. The external PPG debt consists of bilateral debt (USD 6 billion), multilateral debt (USD 3.1 billion), and debt from the Reserve Bank of Zimbabwe (RBZ) (USD 3.6 billion). The IMF estimated the debt-to-GDP ratio at 95.4% in 2023. Since June 2023, the Government has taken proactive measures to combat high inflation by tightening monetary policy in efforts to reduce both inflation and the parallel market premium. Additionally, it has extended the utilization of US dollars as legal tender until 2030. The increase in inflation occurs amidst the backdrop of the local currency's depreciation against the U.S. dollar, exacerbated by the ongoing scarcity of foreign currency within the country. This currency volatility has led to escalating prices, as businesses strive to cope with the mounting inflationary pressures.

Unemployment rate estimates stood at 21% in 2023, according to ZimStat, the country's national statistics agency. However, that rate doesn't reflect the income losses from reduced working hours, unpaid leave, and the decrease of opportunities for formal and informal sector activities which was exacerbated by the pandemic, and drove thousands of the poorest people in the country into unemployment, leaving millions Zimbabweans on the brink of starvation. Additionally, the informal economy is widespread and only 5% of workers have formal jobs. According to the World Bank, more than 38.3% of the population still lives below the poverty line and the extreme poverty rate rose in recent years. The country was estimated to have a GDP per capita (PPP) at USD 2,607 in 2022, among the lowest in the world (World Bank).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 31.4932.4247.0849.7350.48
GDP (Constant Prices, Annual % Change) 6.24.13.63.53.3
GDP per Capita (USD) 1,9912,0062,8572,9622,953
General Government Gross Debt (in % of GDP) 98.495.456.952.248.2
Inflation Rate (%) n/a314.5222.4128.172.3
Current Account (billions USD) 0.320.28-0.32-0.41-0.47
Current Account (in % of GDP) 1.00.9-0.7-0.8-0.9

Source: IMF – World Economic Outlook Database , Latest available data

Note: (e) Estimated Data

Main Sectors of Industry

Zimbabwe has abundant natural resources, including diamonds, gold, coal, iron ore, nickel, copper, lithium, tin, and platinum. Diamond, gold, and platinum have been the most economically significant natural resources produced in Zimbabwe. Even though the country is rich in resources, only around 10.3% of the land is arable. Agriculture represents 7.2% of GDP and employs 53% of the population (World Bank). The agricultural sector is dominated by tobacco production, which is the country’s second source of foreign currency. Other agricultural exports include maize, cotton, wheat, coffee, sugarcane, peanuts, sheep, goats, and pigs. Zimbabwe's economy depends heavily on its mining and agriculture sectors. Agriculture remains vulnerable to climate shocks in the country: according to the Finance Minister, Zimbabwe is expected to see a 50% reduction in its staple maize harvest in 2024, dropping to 1.1 million tons due to an El Niño-induced drought. This contrasts with the country's annual requirement of 1.8 million tons of maize for human consumption and the previously projected maize harvest of 2.3 million tons in 2023.

The mining industry dominates the industrial sector. Other industrial products include steel, wood, chemicals, cement, fertilizer, clothing, footwear, foodstuffs, and beverages. Industry represents 40.4% of the GDP and employs 14% of the workforce. The overall slow growth of the mining and manufacturing sectors reflects a difficult business environment, characterized by high inflation, tight financing conditions, and continuation of forex retention policies, which increase the costs of doing business and prevent the mining sector from capitalizing on higher global prices for minerals. In late 2023, the government introduced the Zimbabwe National Industrial Development Policy (ZNIDP) (2024-2030), replacing the National Industrial Development Policy that expired in 2023.

Services, which represent 40.7% of the GDP, employ 34% of the workforce and are highly reliant on tourism, given that the country enjoys a number of tourist sites of global significance. Zimbabwe’s tourism receipt increased 22% y-o-y in 2023, reaching USD 1.1 billion, showing signs of recovery from the pandemic-led crisis. The construction and financial sectors also play a role in the Zimbabwe economy. The country has a banking sector fashioned after the British model, with the Reserve Bank of Zimbabwe (RBZ) acting as the central bank. The sector comprises commercial banks, the largest subset, along with merchant banks, which facilitate trade financing and corporate transactions like mergers and acquisitions. Additionally, there are building societies offering real estate mortgages, the government-owned People’s Own Savings Bank, development financial institutions, and micro-finance entities. The financial landscape also includes insurance firms, pension funds, provident funds, investment trusts, and offshore portfolio investors.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 61.6 11.6 26.7
Value Added (in % of GDP) 8.8 28.8 56.6
Value Added (Annual % Change) 17.5 6.4 7.7

Source: World Bank - Latest available data.

 

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Monetary Indicators 20192020
American Dollar - accepted in the context of the multi-currency framework (USD) - Average Annual Exchange Rate For 1 MUR 0.031.63

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
39,5/100
World Rank:
174
Regional Rank:
46

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

The Zimbabwean Government is generally open to foreign trade, which accounts for 65% of its GDP, according to the latest World Bank estimates. In the context of economic and regional integration, the country has strengthened its ties with the SADC (Southern African Development Community) member countries and levies lower duties on imports from such countries. However, the strict control on trade exercised by the Government and the relatively high customs duties make the country difficult to access. There are other barriers that continue to impact trade such as the lack of long-term economic and political reforms, state control over companies, insecurity, and a lack of skilled labor forces. The country mainly exports gold (30.3%), nickel ores and concentrates (16.7%), nickel mattes (15.6%), tobacco (14.1%), and ferro-alloys (5.5%); whereas imports are led by petroleum oils (3.4%), motor vehicles for the transport of goods (3.0%), mineral or chemical nitrogenous fertilizers (2.8%), and electrical energy (2.4% - data Comtrade 2022).

Zimbabwe's main export partners are South Africa (41.8% of total exports), United Arab Emirates (32.3%), China (8.9%), Belgium (3.3%), and Mozambique (2.9%), with imports coming chiefly from South Africa (40.5%), China (13.9%), Singapore (13.6%), Mozambique (3.8%), and Mauritius (3.7% - data Comtrade 2022). The country was once a major agricultural exporter, but today it imports foodstuffs and manufactured goods in large quantities. This is mainly due to land expropriation and state-owned enterprises distorting the economy, as well as government intervention, inadequate supervision, and political instability that undermine the financial system. This economic change has significantly damaged the country's trade balance, which is now in deficit.

According to data by WTO, in 2022, exports of goods amounted to USD 6.5 billion (+9.1% year-on-year), while imports reached USD 8.6 billion (+14.5%). Over that same period, services exports amounted to USD 447 million, while imports reached USD 1.3 billion. The country’s trade balance for goods and services was negative by 9% of GDP (from 5.3% one year earlier – data World Bank). In 2023, Zimbabwe's total value of exported goods increased by almost 10% to USD 7.2 billion. More than 80% of export earnings originated from the mineral sector (ZimStat).

 
Foreign Trade Indicators 20182019202020212022
Imports of Goods (million USD) 6,3914,8175,0027,5348,628
Exports of Goods (million USD) 4,0574,2694,3966,0356,586
Imports of Services (million USD) 1,0269097709451,322
Exports of Services (million USD) 501603331240447
Imports of Goods and Services (Annual % Change) -12.4-2.1-29.054.8n/a
Exports of Goods and Services (Annual % Change) -2.912.3-39.841.1n/a
Imports of Goods and Services (in % of GDP) 28.425.528.730.9n/a
Exports of Goods and Services (in % of GDP) 26.227.225.925.4n/a
Trade Balance (million USD) -1,938174212n/an/a
Trade Balance (Including Service) (million USD) -2,464-131-226n/an/a
Foreign Trade (in % of GDP) 54.652.754.756.3n/a

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
South Africa 41.8%
United Arab Emirates 32.3%
China 8.9%
Belgium 3.3%
Mozambique 2.9%
See More Countries 10.9%
Main Suppliers
(% of Imports)
2022
South Africa 40.5%
China 13.9%
Singapore 13.6%
Mozambique 3.8%
Mauritius 3.7%
See More Countries 24.6%

Source: Comtrade, Latest Available Data

 
 

Main Products

6.6 bn USD of products exported in 2022
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 30.3%
Nickel ores and concentratesNickel ores and concentrates 16.7%
Nickel mattes, nickel oxide sinters and other...Nickel mattes, nickel oxide sinters and other intermediate products of nickel metallurgy : 15.6%
Unmanufactured tobacco; tobacco refuseUnmanufactured tobacco; tobacco refuse 14.1%
Ferro-alloysFerro-alloys 5.5%
See More Products 17.9%
8.6 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 15.5%
Soya-bean oil and its fractions, whether or not...Soya-bean oil and its fractions, whether or not refined (excl. chemically modified) 3.4%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 3.0%
Mineral or chemical nitrogenous fertilisers (excl....Mineral or chemical nitrogenous fertilisers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 2.8%
Electrical energyElectrical energy 2.4%
See More Products 73.0%

Source: Comtrade, Latest Available Data

 
 

To go further, check out our service Import Export Flows.

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

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Sources of General Economic Information

Ministries
Official list of ministries
Ministry of Finance and Economic Development
Foreign Affairs and International Trade
Ministry of Industry and Commerce
Ministry of Agriculture
Statistical Office
Zimbabwe Statistics Bureau (Zimstat)
Central Bank
Reserve Bank of Zimbabwe
Stock Exchange
Zimbabwe Stock Exchange
Victoria Falls Stock Exchange
Search Engines
Google Zimbabwe
Economic Portals
Zimbabwe Portal

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Political Outline

Current Political Leaders
President: Emmerson Dambudzo MNANGAGWA (since 4 September 2023)
Vice President:
Constantino CHIWENGA (since 4 September 2023)
Second Vice-President: Kembo MOHADI (8 September 2023)
Next Election Dates
General elections: 2028
Main Political Parties
Zimbabwe has a multi-party system, though a handful of larger parties typically dominate politics. The main political parties in the country include:

- The African National Union of Zimbabwe - Patriotic Front (ZANU-PF): left, ruling party, nationalist and populist, heir to the liberation movements that fought the apartheid regime of Ian Smith, led by Emmerson Dambudzo Mnangagwa
- Citizens Coalition for Change (CCC): centre-left, social democracy
- Movement for Democratic Change – Tsvangirai (MDC–T): centre-left, nationalist, social democracy
- National People's Congress (NPC): centrist.

Type of State
Zimbabwe is a presidential republic.
Executive Power
Executive power is held by the President, the head of state and the head of government, who is elected for a five-year term. The President appoints the members of his Cabinet. The President is elected by direct universal suffrage and is assisted by a Vice-President. Under the new constitution, adopted after the presidential elections of 2013, the post of Prime Minister has been abolished.
Legislative Power
The legislative power is vested in a bicameral parliament consisting of a Senate (80 seats - 60 members elected by popular vote for a five-year term, 18 traditional chiefs elected by the Council of Chiefs, and 2 seats for people with disabilities) and an Assembly (280 seats - 210 members elected by popular vote for a five-year term to represent single-member constituencies, 60 seats reserved for women, who are elected by proportional representation in 10 six-seat constituencies, and 10 additional seats reserved for candidates aged between 21 and 35 directly elected by proportional representation).
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
130/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Partly Free
Political Freedom:
6/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Zimbabwe please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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Latest Update: April 2024