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

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

After two consecutive years of recession brought on by the passage of Cyclone Idai and a harsh drought faced in 2019, followed by the emergence of the COVID-19 pandemic in 2020, activity in Zimbabwe rebounded in 2021, supported by an exceptional agricultural season and a boost in mining activity. Growth reached an estimated 5.1% GDP in 2021, and it is expected to grow 3.1% in 2022 and 3% in 2023, mainly supported by the recovery of the agricultural sector and heightened private consumption as the COVID-19 vaccination campaign progresses.

In 2021, inflation fell from 557.2 % to 92.5%, and it is expected to continue that downward trend in 2022 and 2023, when inflation rates should reach 30.7% and 20.2%, respectively. The current account balance recorded a surplus of 4.9% of GDP in 2021, driven mainly by expatriate remittances, which maintain a positive balance on the transfer account. However, the surplus is expected to narrow to 3.8% in 2022 and 2.2% 2023, mainly due to an increase in imports of goods and services in response to the recovery in domestic demand. Despite Zimbabwe's current account surplus, the country's external position is fragile due to low capital inflows. Zimbabwe's debt remains at an unsustainable level due to the accumulation of external arrears and the expansion of domestic debt. According to the IMF, gross government debt represented 54% of GDP in 2021, but it should increase to 60.3% in 2022 and 62% in 2023. As early as 2018, the authorities had implemented a Transitional Stabilisation Program 2018–20 to restore macroeconomic and monetary balances. Fiscal consolidation measures should contain spending growth and stop the monetisation of the budget deficit. According to the African Development Bank, the country would need 3.4 billion EUR / year for ten years to rebuild its infrastructure, while the arrears held by international organisations limit the country's ability to resort to international aid. One of the country's main challenges is to re-establish a sustainable and credible economic policy in order to reconstruct the country and to offset its high public debt. The banking system is also in need of strengthening. Even though the government implement a series of measures to mitigate the social and economic impact of the pandemic, the COVID-19 crisis put pressure on the country's strained public resources, so recovery has been slow.

The country's social situation is worrying. According to some estimates, the unemployment rate is close to 80%, while other sources state that the actual rate is closer to 15%. Unemployment rate estimates stood at 5.3% in 2020 according to World Bank data (estimate modelled by the ILO). 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. Furthermore, epidemics are worsening, mainly HIV / AIDS and cholera, and life expectancy has been steadily declining in recent years, reaching 58.56 in 2017, making it the third country in the lowest life expectancy in the world. Access to education is declining and the failure of land reform has caused the exodus of many farmers. According to the World Bank, more than 70% of the population still lives below the poverty line and the extreme poverty rate rose from 29% in 2018 to nearly half of  Zimbabweans in 2020, as the pandemic delivered another economic shock to the country.

 
Main Indicators 20202021 (e)2022 (e)2023 (e)2024 (e)
GDP (billions USD) 23.18e32.8738.2837.3038.71
GDP (Constant Prices, Annual % Change) -5.2e7.23.02.82.9
GDP per Capita (USD) 1e2222
General Government Gross Debt (in % of GDP) 102.566.992.664.957.5
Inflation Rate (%) 557.2e98.5284.9204.636.1
Current Account (billions USD) 0.680.350.220.100.15
Current Account (in % of GDP) 2.91.10.60.30.4

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

Note: (e) Estimated Data

Main Sectors of Industry

Zimbabwe has abundant natural resources including diamond, 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% of the land is arable. Agriculture represents 7.6% (2020) of GDP and employs 66.1% (2019) of the population (World Bank). The agricultural sector is dominated by tobacco production, which is the country’s second source of foreign currencies. 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. Despite the negative impacts of the pandemic, the agricultural sector managed to remain stable through 2020 and 2021, mainly due to favourable rainfall. The agricultural sector is expected to spearhead Zimbabwe’s recovery in 2022, but it will remain vulnerable to climate shocks.

The mining industry dominates the industrial sector. In 2013, the EU completely lifted its embargo on Zimbabwe's diamond industry. Other industrial products include steel, wood, chemicals, cement, fertiliser, clothing, footwear, foodstuffs, and beverages. Industry represents 35.8% (2020) of the GDP and employs 6.5% (2019) of the workforce. The overall slow growth of mining and manufacturing sectors reflects a difficult business environment, characterised 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 capitalising on higher global prices for minerals. Industrial sector activity remained subdued in 2021, reflecting gradual stabilisation of the economy following the initial impacts of the pandemic, and weaker global demand.

Services, which represents 49.8% (2020) of the GDP, employs 27.2% (2019) of the workforce and are highly reliant on tourism, given that the country enjoys a number of tourist sites of global significance. The construction and financial sectors also play a role in the Zimbabwe economy. Although the services sector showed a rebound in 2021, the impacts of the pandemic and the country's economic volatility will continue to weigh on its prospects in the short term. Tourism levels saw a slow recover in 2021, and it should continue on a gradual recovery course in 2022. Below-average tourism means that hotels, restaurants, and transportation will remain below capacity, despite experiencing some growth.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 66.2 6.6 27.2
Value Added (in % of GDP) 5.1 12.6 37.4
Value Added (Annual % Change) 18.3 3.2 1.5

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 30.6% 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 labour forces. The country mainly exports nickel (36.3%), gold (22.4%), tobacco (16.9%), diamonds (3.2%), and ferro-alloys (3.2%), while it imports petroleum oils (12.2%), maize (5.9%), electrical electricity (3%), medicaments (2.7%), and soyabean oils (2.5%).

Zimbabwe's main trading partners are South Africa, the United Arab Emirates, Singapore, Mozambique, China, India, Mauritius, Uganda, and Belgium. 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's 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. This trend should continue in the coming years, despite the recovery of gemstone exports and the decline in the global oil prices. The government has reduced certain tariffs to facilitate imports.

In 2020, exports of goods amounted to USD 4.3 billion, while imports reached USD 5 billion, resulting in a trade deficit of USD 860 million. Over that same period, services exports amounted to USD 148 million, while imports reached USD 474 million. Including services, Zimbabwe's trade balance closed 2020 at a deficit of USD 932 million.

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 3,7003,9006,3914,8175,002
Exports of Goods (million USD) 2,8323,8644,0574,2694,396
Imports of Services (million USD) n/a1,072973695474
Exports of Services (million USD) n/a371390394148
Imports of Goods and Services (Annual % Change) -3.33.2-25.3n/an/a
Exports of Goods and Services (Annual % Change) 21.04.8-29.3n/an/a
Imports of Goods and Services (in % of GDP) 31.328.118.9n/an/a
Exports of Goods and Services (in % of GDP) 19.918.211.6n/an/a
Trade Balance (million USD) -1,500-1,170n/an/an/a
Trade Balance (Including Service) (million USD) -2,367-1,844n/an/an/a
Foreign Trade (in % of GDP) 51.246.330.6n/an/a

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

 

Main Partner Countries

Main Customers
(% of Exports)
2020
South Africa 39.4%
United Arab Emirates 20.3%
Mozambique 9.3%
Uganda 2.9%
Belgium 1.7%
See More Countries 26.5%
Main Suppliers
(% of Imports)
2020
South Africa 49.3%
Singapore 10.9%
China 9.3%
India 3.2%
Mauritius 3.2%
See More Countries 24.1%

Source: Comtrade, Latest Available Data

 
 

Main Products

4.4 bn USD of products exported in 2020
Nickel mattes, nickel oxide sinters and other...Nickel mattes, nickel oxide sinters and other intermediate products of nickel metallurgy : 22.4%
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 22.4%
Unmanufactured tobacco; tobacco refuseUnmanufactured tobacco; tobacco refuse 16.9%
Nickel ores and concentratesNickel ores and concentrates 13.9%
Diamonds, whether or not worked, but not mounted...Diamonds, whether or not worked, but not mounted or set (excl. unmounted stones for pick-up styluses, worked stones, suitable for use as parts of meters, measuring instruments or other articles of chapter 90) 3.2%
See More Products 21.2%
5.1 bn USD of products imported in 2020
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 12.2%
Maize or cornMaize or corn 5.9%
Electrical energyElectrical energy 3.0%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.7%
Soya-bean oil and its fractions, whether or not...Soya-bean oil and its fractions, whether or not refined (excl. chemically modified) 2.5%
See More Products 73.7%

Source: Comtrade, Latest Available Data

 
 

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

 

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Political Outline

Current Political Leaders
President: Emmerson Mnangagwa (since 24 November 2017)
Vice President:
Constantino Chiwenga (since 28 December 2017)
Second Vice-President: Vaccant (since March 1st 2021)
Next Election Dates
General elections: 2023
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
- The Movement for Democratic Change Alliance (MDC Alliance): centre-left, main opposition party, heir to the ZCTU trade union confederation, supported by the urban middle class, led by Nelson Chamisa
- The National Patriotic Front (NPF) (leader: Ambrose Mutinhiri)

Type of State
Zimbabwe is a democratic republic.
Executive Power
Executive power is held by the President, the head of state and 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 (270 seats - 210 members elected by popular vote for a five-year term to represent single-member constituencies and 60 seats reserved for women, who are elected by proportional representation in 10 six-seat constituencies).
 

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

COVID-19 epidemic evolution
To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Zimbabwe, please visit the Ministry of Health and Child Care’s Daily Updates and Worldometer’s Zimbabwe page.
Sanitary measures
To find out about the latest public health situation in Zimbabwe consult the Ministry of Health and Child Care’s COVID-19 Guides and Advice webpages and Covid-19 testing in Zimbabwe.
Travel restrictions
The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions
For information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports), refer to the portal ZimTrade. Zimbabwe has banned exports of medical supplies and suspended import duties on goods and services related to testing, protection, sterilisation and other medical consumables.

For a general overview of trade restrictions due to COVID-19 pandemic, please consult the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan
For  information on the economic recovery scheme put in place by the Zimbabwean government to address the impact of the COVID19 pandemic on the Zimbabwean economy, refer to Resolutions of the Monetary Policy Committee Meeting Held on 24 April 2020 and KPMG’s report Government and institution measures in response to COVID-19.


For a general overview of the key economic policy responses to the COVID-19 outbreak (fiscal monetary and macroeconomic) taken by the Zimbabwean government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Zimbabwe in the IMF’s Policy Tracker platform.

Support plan for businesses
There are no specific support plans for exporters in Zimbabwe so far. For future possible up-to-date information please visit the website of the Ministry of Commerce Trade and Industry.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

There are no specific support plans for exporters in Zimbabwe so far. For future possible up-to-date information please visit the website of Zimtrade, the National Trade Development and Promotion Organisation of Zimbabwe.

 

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Latest Update: November 2022