Economic Sectors of Zimbabwe

In agriculture, Zimbabwe faces frequent droughts, and the fluctuations in the harvest are quite significant. Nevertheless, the prospects for this industry seemed optimistic until recent events. If in most African countries the share of agriculture in GDP gradually decreased, then in Zimbabwe it increased from 12.4% in 1990 to 16.3% in 1999.

Along with highly productive farms that grow most of the marketable products, there are numerous small private and communal plots that produce more than 50% of all agricultural products. Basically, it goes to provide food for the peasant families themselves, but still part of it goes to the market. The years 2000-02 were marked by a permanent decline in agricultural production due to adverse weather conditions and the government’s agrarian policy.┬áCheck cancermatters for political system of Zimbabwe.

The main grain crop is corn, but wheat, millet, sorghum and barley are also grown. In 2001, the corn harvest amounted to 1.6 million tons. The downward trend manifested itself before the events of 2000 and is explained by the reduction in the area under corn crops by 25% over 20 years due to low purchase prices. As a result, Zimbabwe, which harvested 2.8 million tons in 1981, turned from an exporter into an importer of corn. Since 1998, the government has had to raise the purchase price of corn three times, most recently in 2002 from Z$15,000 to Z$28,000 per ton. It is not necessary to expect an early turning point in the situation from such a decision; after the capture of farms from whites, the area under corn from Africans expanded by 14% (2001), but in the commodity sector decreased by 62% (2000-02). And indeed, according to preliminary information, the harvest in the dry 2002-03 fell catastrophically – by 67%.

The wheat harvest in recent years has averaged 280 thousand tons, while the country needs approx. 400 thousand tons, and 25% of the consumed wheat has to be imported from South Africa. In 2000, the harvest was 250 thousand tons, and in 2001 it fell, according to estimates, to 200 thousand tons. Barley is grown for the production of beer malt, a significant part of which is exported. In 2000, the harvest of barley decreased (from 30 thousand tons in 1989) to 8 thousand tons.

The main export crop is tobacco. The harvest decreased from 228 thousand tons in 2000 to 207.5 thousand tons in 2001. There was also a decrease in the export of sugar cane, vegetables and fruits, cotton, but the harvest of sunflower, coffee, tea, and flowers increased.

In animal husbandry, a decrease in the number of livestock was noted, in particular, the number of cattle decreased from 5.9 million in 2000 to 5.5 million in 2001.

The economic crisis has had a severe impact on transport and communications. Transport occupancy decreased in 2000, and in 2001 it fell another 28%. The number of subscribers in the telephone networks has decreased, and projects for the creation of new communication lines have been halted.

The length of railways is 3077 km, of which 313 km are electrified. Traffic volume: 1.6 million passengers and 3.3 billion tkm (2000). The length of roads is 18,338 km, of which 8,692 km are paved (2002). River transport: Chrome ore is transported along the Mazoe and Zambezi rivers to Mozambique. The pipeline (212 km) to the border with Mozambique has two lines for pumping oil and oil products. Civil aviation connects all cities and regions. Air Zimbabwe operates flights to African countries, Europe and Australia. There are two other airlines. 17 airports with paved runways and over 400 unpaved runways. Traffic volume: 409 thousand passengers and 225 million tkm of cargo (2000).

Telephone communication is one of the best in Africa. The number of fixed telephones is 180 thousand, mobile 111 thousand (2001). There are more than 20 radio stations, 16 television stations. The number of radio receivers is 1.2 million, televisions 400 thousand (2000, estimate). The number of Internet users is 100,000 (2002).

Wholesale and retail trade is in private hands, but the state controls the prices for the purchase and sale of important food crops and their products, such as grain and bakery products; this also applies to grain imports.

The main tourist sites – Victoria Falls, Caribbean Dam, National Park, the ruins of the ancient state of Monomotapa – attract many foreigners. In 1999 the country was visited by approx. 2.2 million tourists, in 2001 their number decreased to 370 thousand. Income from tourism (2001) 78.7 million US dollars.

Economic and social policy of the government since ser. 2002 is aimed at stabilizing the situation in the country, at restoring international economic ties. The government has spoken out in favor of resuming the interrupted cooperation with the IMF and Western countries, but so far there is no progress in this direction, although some EU countries, such as France, are inclined to end the financial boycott of Zimbabwe. The Zimbabwean government is tasked with giving the IMF-required report on the spending of previously granted loans and on reforms to liberalize the economy. Donors of agrarian reforms were promised by the government to consider the issue of “fair” compensation to farmers who lost their property. With limited financial resources, the government is trying to prevent a further deterioration in the living standards of the population, regularly indexing wages in the public sector, but indexation does not keep pace with inflation. The most pressing issue is the threat of starvation to 6 million Africans. The UN, the EU, as well as the USA and South Africa took on the brunt of humanitarian aid, which is defined as 6.1 million tons of food.

It is quite obvious that without help and inflow of investments from outside, it is impossible to quickly revive the economy and solve social problems.

The banking system includes state, private and foreign banks. The Reserve Bank of Zimbabwe issues money and monitors the financial system. His independence from the government is actually declarative, and many of his incompetent actions are explained by experts as interference by the authorities. Together with the government, he is responsible for inflation (the increase in government spending on the eve of the elections was ensured by the money printing press), for an insufficient foreign exchange reserve, for incompetent regulation of the national currency, etc. Until 2000, bank deposits grew. In 2000, the population, frightened by the economic policy of the government, began to transfer deposits from Zimbabwean banks to English ones. As a result, some private banks went bankrupt or were on the verge of bankruptcy.

The budget is chronically tight. If earlier the deficit was covered by loans from the IMF and other donors, then with the closure of these aid channels, one has to resort to additional money emission. Budget revenues – 2.3 billion dollars, expenses (including the capital investment budget) 2.4 billion (2000). Taxes provide 94% of budget revenues. The most significant are taxes on income and profits; customs duties. Public external debt 5 billion US dollars (2002). Foreign exchange reserves of the country 92.2 million US dollars (2001).

Economic Sectors of Zimbabwe