Ties with China and tobacco exports are among the country’s assets – but corruption and disastrous policies have taken their toll.
\nBy John-Paul Ford Rojas, Business Reporter<\/p>\n
Zimbabwe was once known as the bread-basket of Africa thanks to its abundant agriculture, but the economy has deteriorated disastrously under Robert Mugabe.<\/p>\n
Crippled by hyperinflation, it turned to the dollar after its own currency became almost worthless, though it has a growing “informal” economy.<\/p>\n
So what’s left, and where does it go from here?<\/p>\n
AGRICULTURE<\/strong><\/span><\/p>\n The scale of Zimbabwe’s economic disaster can be measured in wheat production – which fell from 320,000 tons in 1990 to 20,000 last year.<\/p>\n Prodigious exports of this product, as well as maize, the country’s other staple, have collapsed after the seizure of land from white farmers starting in the 1990s.<\/p>\n In many cases this left crops in the hands of people who had no farming experience – and overall, food production halved.<\/p>\n Zimbabwe, once a net food exporter, last month took action to ban the import of fruit and vegetables in order to save foreign currency. Tobacco exports now form a major part of the economy, with China and South Africa the biggest customers.<\/p>\n Last year it earned $589m from sales of the product, but income has been lower in 2017.<\/p>\n The 2016 figure was lower than the year before after the crop was hit by a drought.<\/p>\n MINING<\/span><\/strong><\/p>\n Zimbabwe generates half of its export earnings from mining, particularly gold and platinum, but these industries have also been hobbled by intervention.<\/p>\n Diamonds saw production fall to 961,000 carats last year, down from 3.5 million the year before, after the government seized all gem mining in the east of the country.<\/p>\n In August, the country’s central bank ordered platinum and chrome miners – Zimbabwe’s main foreign currency earners – to surrender 80% of their exports, up from 50%, to help contain a shortage of dollars.<\/p>\n CHINA<\/strong><\/span><\/p>\n China, the world’s second biggest economy, now accounts for more than half of all foreign direct investment in Zimbabwe.<\/p>\n It has helped revived tobacco exports, patched up the country’s energy infrastructure and built its first solar power plants, as well as putting up a $200m shopping mall in the west of Harare.<\/p>\n China has signalled since the army takeover that its “friendly policy” would not change.<\/p>\n Beijing has stood by Mr Mugabe in the face of Western economic sanctions and in 2008 vetoed a proposal at the UN to impose an arms embargo as well as travel and financial restrictions on the president and other officials.<\/p>\n SANCTIONS<\/p>\n The US in 2003 imposed targeted sanctions, a travel ban and an asset freeze against Mr Mugabe and his close associates – pointing to his government’s human rights abuses and evidence of electoral fraud.<\/p>\n Britain also has financial sanctions in place on Zimbabwe.<\/p>\n CORRUPTION<\/span><\/strong><\/p>\n Transparency International last month estimated that the country was losing at least $1bn a year to corruption.<\/p>\n It pointed to police, local councils and the driving licence authorities as being among the worst offenders, but critics point to high-level graft.<\/p>\n The lavish lifestyle of Mr Mugabe’s wife has earned her the nickname “Gucci Grace” – after she purchased mansions in South Africa, rare diamond jewellery and Rolls-Royce limousines for her playboy sons.<\/p>\n THE FUTURE<\/span><\/strong><\/p>\n After decades of economic contraction, Zimbabwe has seen something of a recovery over the last decade, though this has since stalled.<\/p>\n The World Bank, in a report earlier this year, judged that its fundamentals for economic growth and reduction in poverty remained strong, provided it could resolve “political fragilities” and introduce investment and fiscal reforms.<\/p>\n It concluded that Zimbabwe had “enormous potential” given its generous endowment of natural resources as well as existing public infrastructure and skills base.<\/p>\n A report from the International Monetary Fund made similar findings while also highlighting Zimbabwe’s difficulties.<\/p>\n “Despite the challenges, a vibrant private sector and a growing informal economy have demonstrated surprising resilience,” it said.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Ties with China and tobacco exports are among the country’s assets – but corruption and disastrous policies have taken their toll. By John-Paul Ford Rojas, Business Reporter Zimbabwe was once known as the bread-basket of Africa thanks to its abundant agriculture, but the economy has deteriorated disastrously under Robert Mugabe. Crippled by hyperinflation, it turned […]<\/p>\n","protected":false},"author":30,"featured_media":72,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,7],"tags":[],"class_list":{"0":"post-71","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-files"},"yoast_head":"\n
\nTOBACCO<\/p>\n