The mining sector remains very lucrative, with some of the world’s largest platinum reserves being mined by Anglo American plc and Impala Platinum. The Marange diamond fields, discovered in 2006, are considered the biggest diamond find in over a century. They have the potential to improve the fiscal situation of the country considerably, but almost all revenues from the field have disappeared into the pockets of army officers and ZANU-PF politicians.
In terms of carats produced, the Marange field is one of the largest diamond producing projects in the world, estimated to produce 12 million carats in 2014 worth over $350 million. Zimbabwe is the biggest trading partner of South Africa on the continent.
Taxes and tariffs are high for private enterprises, while state enterprises are strongly subsidised. State regulation is costly to companies; starting or closing a business is slow and costly. Government spending was predicted to reach 67% of GDP in 2007.
Tourism was an important industry for the country, but has been failing in recent years. The Zimbabwe Conservation Task Force released a report in June 2007 estimating 60% of Zimbabwe’s wildlife has died since 2000 due to poaching and deforestation. The report warns that the loss of life combined with widespread deforestation is potentially disastrous for the tourist industry.
The ICT sector of Zimbabwe has been growing at a fast pace. A report by the mobile internet browser company, Opera, in June/July 2011 has ranked Zimbabwe as Africa’s fastest growing market.
Since 1 January 2002, the government of Zimbabwe has had its lines of credit at international financial institutions frozen, through US legislation called the Zimbabwe Democracy and Economic Recovery Act of 2001 (ZDERA). Section 4C instructs the Secretary of the Treasury to direct directors at international financial institutions to veto the extension of loans and credit to the Zimbabwean government. According to the United States, these sanctions target only seven specific businesses owned or controlled by government officials and not ordinary citizens.
Zimbabwe maintained positive economic growth throughout the 1980s (5% GDP growth per year) and 1990s (4.3% GDP growth per year). The economy declined from 2000: 5% decline in 2000, 8% in 2001, 12% in 2002 and 18% in 2003. Zimbabwe’s involvement from 1998 to 2002 in the war in the Democratic Republic of the Congo drained hundreds of millions of dollars from the economy. From 1999–2009, Zimbabwe saw the lowest ever economic growth with an annual GDP decrease of 6.1%.
The downward spiral of the economy has been attributed mainly to mismanagement and corruption by the government and the eviction of more than 4,000 white farmers in the controversial land confiscations of 2000. The Zimbabwean government and its supporters attest that it was Western policies to avenge the expulsion of their kin that sabotaged the economy.
By 2005, the purchasing power of the average Zimbabwean had dropped to the same levels in real terms as 1953. In 2005, the government, led by central bank governor Gideon Gono, started making overtures that white farmers could come back. There were 400 to 500 still left in the country, but much of the land that had been confiscated was no longer productive. By 2016 there were about 300 farms owned by white farmers left out of the original 4,500. The farms left were either too remote or their owners had paid for protection or collaborated with the regime.
In January 2007, the government issued long term leases to some white farmers. At the same time, however, the government also continued to demand that all remaining white farmers, who were given eviction notices earlier, vacate the land or risk being arrested. Mugabe pointed to foreign governments and alleged “sabotage” as the cause of the fall of the Zimbabwean economy, as well as the country’s 80% formal unemployment rate.
Inflation rose from an annual rate of 32% in 1998, to an official estimated high of 11,200,000% in August 2008 according to the country’s Central Statistical Office. This represented a state of hyperinflation, and the central bank introduced a new 100 billion dollar note.
On 29 January 2009, in an effort to counteract runaway inflation, acting Finance Minister Patrick Chinamasa announced that Zimbabweans will be permitted to use other, more stable currencies to do business, alongside the Zimbabwe dollar. In an effort to combat inflation and foster economic growth the Zimbabwean Dollar was suspended indefinitely on 12 April 2009. In 2016 Zimbabwe allowed trade in the United States dollar and various other currencies such as the rand (South Africa), the pula (Botswana), the euro, and the Pound Sterling (UK).
After the formation of the Unity Government and the adoption of several currencies instead of the Zimbabwe dollar in 2009, the Zimbabwean economy rebounded. GDP grew by 8–9% a year between 2009 and 2012. In November 2010, the IMF described the Zimbabwean economy as “completing its second year of buoyant economic growth”. By 2014, Zimbabwe had recovered to levels seen in the 1990s but between 2012 and 2016 growth faltered.
Zimplats, the nation’s largest platinum company, has proceeded with US$500 million in expansions, and is also continuing a separate US$2 billion project, despite threats by Mugabe to nationalise the company. The pan-African investment bank IMARA released a favourable report in February 2011 on investment prospects in Zimbabwe, citing an improved revenue base and higher tax receipts.
In late January 2013, the Zimbabwean finance ministry reported that they had only $217 in their treasury and would apply for donations to finance the coming Elections that is estimated to cost 107 million USD.
As of October 2014, Metallon Corporation was Zimbabwe’s largest gold miner. The group is looking to increase its production to 500,000 ounces per annum by 2019.
