About Zimbabwe

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With its primary accepted currency as the United States Dollar and its capital city being Harare, Zimbabwe has three official languages: English, Shona and Ndebele.

In the last two years, the economy of Zimbabwe recovered from a hyperinflationary period which threatened to bring the country to its knees. The introduction of the US Dollar (as the primary means of exchange) in February 2009 brought an end to the prevalent hyperinflation. As a result, Zimbabwe offers investors the rare and exciting opportunity of investing in an emerging market, with no exchange rate risk and huge upside potential.

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The endowments

Zimbabwe possesses significant mineral resources, including gold, diamonds, chrome and nickel. Various multi-national mining companies, including Rio Tinto and Impala Platinum, have benefited from Zimbabwe’s favourable mining legislation. They have also contributed to the communities in which they operate, and have installed value-adding equipment such as smelters and refineries.

The country also possesses the second largest resource of platinum in the world, and coal reserves are growing rapidly. Recently, several large deposits have been explored around the country, including the Lubu and Lubimbi coal fields. Also, several companies have shown their willingness to establish power stations in order to help the country deal with its power deficit. Zimbabwe discovered diamonds several years ago in Marange, and initial expectations are that this resource is significant. The Kimberley Process is presently reviewing the Government’s application for certification, which would allow for the export of these precious gems.

Our infrastructure remains relatively good compared to other countries in the region, and our wide-ranging road and rail networks, as well as an established regulatory framework in most facets of business, have fostered a business-friendly environment. Unfortunately, our power generating capacity remains low in relation to the country’s needs – the national power utility can only produce around 60% of the country’s requirements, resulting in frequent power cuts and faults thanks to ageing equipment. In recent years the Zimbabwean Government has licensed private producers in the power sector, which should go a long way towards improving the supply of electricity.
The Victoria Falls, one of the seven natural wonders of the world, helped Zimbabwe to create a vibrant tourism industry and traditionally one of the country’s largest earners of foreign currency. According to the World Travel and Tourism Council, tourism growth is expected to average 8.7% in the next 10 years. Occupancies have improved and many hotels in the country are embarking on large refurbishment exercises in order to regain their reputations as world class locations. Other tourism destinations within Zimbabwe include Lake Kariba, the Eastern Highlands, Great Zimbabwe and the country’s numerous national parks and game farms.
The Zimbabwean climate is suited to various forms of agriculture, and our tobacco is of a very high standard. Known for many years as the ‘breadbasket of Africa,’ agriculture was a cornerstone of the economy. The country has traditionally excelled in the production of tea and coffee in the Eastern Highlands, and sugar in the Lowveld. Maize and wheat are also farmed extensively, and cotton is grown by small-scale farmers under contract. Unfortunately most agricultural sectors have shrunk drastically as a result of a chaotic land reform programme instituted in 2000, which saw the eviction of many of the country’s productive farmers.

Production levels in most industries have decreased, and the country is now import-dependent for food security. However, several agricultural sectors are recovering strongly, including the tobacco industry, which produced over 114 million kilograms in 2010. Timber, horticulture and flowers, as well as pork, poultry and beef are major Zimbabwean industries.

The financial sector in Zimbabwe is regulated by the Ministry of Finance through the Reserve Bank of Zimbabwe (RBZ). On the 6th of April 2010, government signed a new RBZ Bill which outlines the activities and mandates of the RBZ. The new Act also resulted in the establishment of the RBZ Board chaired by the RBZ governor, and a Monetary Policy Committee. The RBZ is also in charge of the Exchange Control Act of 1964 as amended. Other interested ministries are the Ministries of Economic Planning and Development and the Ministry of Industry and International Trade. The country’s financial sector is relatively more developed than other countries’ in the region. The banking sector is highly competitive, and a number of institutional investors are active on the market. Deposits are growing rapidly as confidence returns to the banking sector.
The Government of Zimbabwe encourages the involvement of indigenous citizens in the economy through the Indigenisation Act and Indigenisation Regulations (Amended). These statutory instruments seek to address the imbalances in the economy caused by historical events. As such, indigenous Zimbabweans must own a designated percentage of every company over a certain value threshold, as stipulated by various sector-specific committees. The Amendments to the Regulations have only recently been announced, and as such the exercise is still in its infancy.