In the early 1970s, the economy experienced a modest boom. Real per capita earnings for blacks and whites reached record highs, although the disparity in incomes between blacks and whites remained, with blacks earning only about one-tenth as much as whites. After 1975, however, Rhodesia's economy was undermined by the cumulative effects of sanctions, declining earnings from commodity exports, worsening guerilla conflict, and increasing white emigration. When Mozambique severed economic ties, the Smith regime was forced to depend on South Africa for access to the outside world. Real gross domestic product (GDP) declined between 1974 and 1979. An increasing proportion of the national budget (an estimated 30%-40% per year) was allocated to defense, and a large budget deficit raised the public debt burden substantially.
Following the Lancaster House settlement in December 1979, Zimbabwe enjoyed a brisk economic recovery. Real growth for 1980-81 exceeded 20%. However, depressed foreign demand for the country's mineral exports and the onset of a drought cut sharply into the growth rate in 1982, 1983, and 1984. In 1985, the economy rebounded strongly due to a 30% jump in agricultural production. However it slumped in 1986 to a zero growth rate and registered negative of about minus 3% in 1987 due primarily to drought and foreign exchange crisis faced by the country. Growth in 1988-90 averaged about 4.5%.
In recent years, poor management of the economy and political turmoil has led to considerable economic hardship. The Government of Zimbabwe's chaotic land reform program, recurrent interference with and intimidation of the judiciary, and maintenance of unrealistic price controls and exchange rates has led to a sharp drop in investor confidence. Since 2000, the national economy has contracted by as much as 25%; inflation has vaulted over 400%; and there have been persistent shortages of foreign exchange, local currency, fuel, and food. Direct foreign investment has all but evaporated.
Zimbabwe has adequate internal transportation and electrical power networks. Paved roads link the major urban and industrial centers, and rail lines tie it into an extensive central African railroad network with all its neighbors. In nondrought years, it has adequate electrical power, mainly generated by the Kariba Dam on the Zambezi River but augmented since 1983 by large thermal plants adjacent to the Wankie coal field. Telephone service is problematic, and new lines are difficult of obtain.
The manufacturing sector, already well-developed before UDI in 1965, was given a major stimulus by the imposition of UN sanctions. The sanctions obliged Rhodesian industry to diversify and create many import-substitution undertakings to compensate for loss of traditional sources of imports. Rhodesian processing of local raw materials also grew rapidly. Major growth industries include steel and steel products, heavy equipment, transportation equipment, ferrochrome, textiles, and food processing.
Agriculture is the backbone of the Zimbabwean economy. Corn is the largest crop. Tobacco is the largest export crop followed by cotton. The government's controversial land reform efforts starting in 2000 have disrupted a significant portion of the commercial farm economy, leading to a sharp drop in tobacco, corn, and cotton production. Poor government management has exacerbated meager harvests caused by drought and floods, resulting in significant food shortfalls beginning in 2001.
GDP - real growth rate: -12.1% (2002 est.), 0% (1999 est.)
GDP - per capita: purchasing power parity - $2,400 (2002 est.), $2,400 (1999 est.)
GDP - composition by sector:
agriculture: 18% (2001), 28% (1997 est.)
industry: 24% (2001), 32% (1997 est.)
services: 58% (2001), 40% (1997 est.)
Population below poverty line: 70% (2002 est.), 60% (1999 est.)
Household income or consumption by percentage share:
lowest 10%: 1.97% (1995), 1.8% (1990)
highest 10%: 40.42%(1990), 46.9% (1990)
Distribution of family income - Gini index: 50.1 (1995)
Inflation rate (consumer prices): 134.5% (2002 est.), 159% (2002 est.)
Labor force: 5.8 million (2000 est.), 5 million (1997 est.)
Labor force - by occupation: agriculture 66%, services 24%, industry 10% (1996 est.)
Unemployment rate: 70% (2002 est.), 50% (1999 est.)
Budget:
revenues: $2.5 billion (2000, FY96/97 est.)
expenditures: $2.6 billion (2000), $2.9 billion, including capital expenditures of $279 million (FY96/97 est.)
Industries: mining (coal, gold, copper, nickel, tin, clay, numerous metallic and nonmetallic ores), steel, wood products, cement,
chemicals, fertilizer, clothing and footwear, foodstuffs, beverages
Industrial production growth rate: -3.1% (2002 est.)
Electricity - production: 6.735 billion kWh (2001), 6.97 TWh (1998)
Electricity - production by source:
fossil fuel: 47% (2001) 78.19% (1998)
hydro: 53% (2001), 21.81% (1998)
nuclear: 0%
other: 0%
Electricity - consumption: 9.813 billion kWh (2001), 8.403 TWh (1998)
Electricity - exports: 0 TWh (2001,1998)
Electricity - imports: 3.55 billion kWh (2001), 1.921 TWh (1998)
Oil - production: 0 bbl/day (2001 est.)
Oil - consumption: 23,000 bbl/day (2001 est.)
Agriculture - products: maize, cotton, tobacco, wheat, coffee, sugarcane, peanuts; cattle, sheep, goats, pigs
Exports: $1.57 billion f.o.b. (2001 est.), $2 billion (f.o.b., 1999 est.)
Exports - commodities: tobacco 23%, gold 14%, ferroalloys 7%, cotton 6% (1997 est.)
Exports - partners: EU 44%, South Africa 15%, Japan 7.3%, US 6% (2001)
Imports: $1.739 billion f.o.b. (2001 est.), $2 billion (f.o.b., 1998 est.)
Imports - commodities: machinery and transport equipment 39%, other manufactures 18%, chemicals 15%, fuels 10% (1997 est.)
Imports - partners: South Africa 43.7%, EU 11%, US 2% (2001 est.)
Debt - external: $3.9 billion (2002 est.), $5 billion (1998)
Economic aid - recipient: $178 million (2000 est.), $437.6 million (1995)
Currency: 1 Zimbabwean dollar (Z$) = 100 cents
Official exchange rates: Zimbabwean dollars (Z$) per US$1 - 55 (February 2003), 55 (2002), 55.0521 (2001), 44.4179 (2000), 38.3142 (1999), 21.4133 (1998), 11.8906 (1997), 9.9206 (1996), 8.6580 (1995).
As of February 2003, the black market rate was 1600 to the dollar.
Fiscal year: 1 July - 30 JuneEnergy Resources
With considerable hydroelectric power and plentiful coal deposits for thermal power station, Zimbabwe is less dependent on oil as an energy source than most other comparably industrialized countries. Only about 15% of Zimbabwe's total energy consumption is accounted for by oil, all of which is imported. Zimbabwe imports about 1.2 billion liters per year. Dependence on petroleum is managed through the price controls for vehicle fuels, the use of gasohol, and the substitution of diesel-electric locomotives on the railway system. Zimbabwe also has substantial coal reserves that are utilized for power generation, and recently discovered in Matabeleland province are coalbed methane deposits greater than any known natural gas field in Southern or Eastern Africa. In recent years, poor economic management and low foreign currency reserves have led to serious fuel shortages.Miscellaneous data
GDP: purchasing power parity - $27 billion (2002 est.), $26.5 billion (1999 est.)
South Africa 12%, UK 11%, Germany 8%, Japan 6%, US 6% (1997 est.)
South Africa 37%, UK 7%, US 6%, Japan 6%, Germany 5% (1997 est.)