Zimbabwe - Economy

Zimbabwe has developed one of the most diverse economies in Africa. It has abundant agricultural and mineral resources and a well-developed industrial sector and infrastructure. Average annual growth during the first post-independence decade was2.9%, but declined by 6.5% in 2001. Problems abound, with an inflation rate of over 100% and the unemployment rate above 60% in 2001. A small white elite continues to dominate economic resources, but repatriation of white farms caused the flight of white capital in 2000, and by 2003, the land reform program had created chaos and violence. Inflation seriously threatened the gold mining and tobacco industries.

The government remained committed to the 1991–95 Economic Structural Adjustment Program (ESAP), despite severe hardships the Program caused average Zimbabweans. Central to this program was the reduction of the civil service by 25% with some 32,000 jobs to be eliminated by 1994. Although Zimbabwe recovered from the effects of the devastating 1991–92 drought, which caused a decline of between 8% and 9% in the GDP, thousands remained chronically dependent on food support. During 2003, many of Zimbabwe's population struggled to afford basic commodities as inflation rose. The African Development Bank and the IMF granted loans to Zimbabwe in 1999 and 2000, but Zimbabwe's external debt had already risen to $5 billion in 2001, and civil unrest threatened the ruling government of Robert Mugabe. High budget deficits, inflation, and the HIV/AIDS pandemic prevent economic stability. As of 2002, the IMF's program with Zimbabwe remained suspended because the country was not complying with the IMF's conditions, and Zimbabwe had not made payments to the IMF since 2001. The World Bank also suspended programs in 2000 due to Zimbabwe's falling into arrears on payments. Mugabe's greater exercise of control over the economy did not portend well for the future in 2003.