Officially known as the Republic of Zimbabwe, the country is a sovereign state that is located in the southern part of the African continent. The nation's economy comprises of the three main sectors of agriculture, industries, and services. The industrial sector is one of the most valuable sectors in the nation after contributing about 25.1% of the total gross domestic product (GDP) of $16.29 billion. Some of the major industries include the likes of mining, cement, clothing and footwear, wood products, and a few others. Agriculture is also a significant contributor with a contribution of around 20.3% of the total GDP.
The economic situation in Zimbabwe is not bright. Some of the reasons why the nation is struggling include lack of substantial foreign investment, inaccessibility of international finances due to huge debt, and a few other reasons. As of 2010, the domestic debt stood at $1 billion while international debt stood at a massive $10.57 billion in 2014. In fact, a survey done on all the African nations showed that Zimbabwe will take the longest time, 190 years, to double its present GDP.
Due to the struggling economy, the country has taken some measures to improve the economic situation. One of the ways the government tried to improve the economy is by seizing commercial farms that were under the ownership of white farmers to be redistributed to black settlers. However, the new owners of the land proved to be inadequate in the ways of large-scale farming and management. Consequently, the new owners failed to live up to the previous levels of produce the farms managed.
Biggest Industries In Zimbabwe
The mining business of Zimbabwe is under the control of the relevant government institutions such as the Ministry of Mines and Mining Development. As is the case with several nations in southern Africa, the nation is endowed with soils that contain materials and minerals such as platinum, iron ore, gold, diamonds, and coal. In fact, the recently discovered Marange diamond fields, which were discovered in 2006, are believed by many to be the richest in the globe. Other deposits also exist, such as copper and nickel, but in considerably smaller amounts.
Looking at the data on gold production, the amount of gold produced was a massive 59,776 pounds. The amount dropped to 15,469 pounds in 2007 then shot back up to about 40,565 pounds in 2015. As of 2014, the largest gold mining group is the Metallon Corporation. The drop in the mining of gold in 2007 can be attributed to the detrimental effects of Zimbabwe’s participation in the war in the Democratic Republic of Congo between 1998 and 2002.
The diamond sector is one that is constantly plagued by corruption. Studies in 2012 have shown that the proceeds from the sector only benefit the elite of the nation. In November 2012, investigations were able to unearth that a whopping $2 billion from the sector had gone missing.
The Marange field produced an estimated 12 million carats of diamond in 2014, which were worth more than $350 million. Fiscal studies into the potential of the field have shown that it has the potential to improve considerably Zimbabwe’s economic situation if the corruption stops. In 2013, the estimated total of all the mineral exports from the nation was $1.8 billion.
Like in most countries, the agriculture in the nation is subdivided into two broad categories namely large-scale or commercial farming and subsistence or small-scale farming. Commercial farming consists of growing cotton coffee, various fruits, peanuts, and tobacco while small-scale farmers mostly grow wheat and maize.
Before the initiative by the government to retake the land in 2000, most of the large swathes of land for commercial farming were well maintained by the white owners. Mugabe’s government used the argument that it was rectifying mistakes that took place during the colonial times when it was pushing out the white owners. Unfortunately, the inexperienced and corrupt black owners who took over ran the sector to the ground. Experts at the University of Zimbabwe estimate that the period between 2000 and 2007 saw the nation’s production decrease by at least 50%. The production of the main crop, tobacco, decreased by at least 79% in the same period.
Fortunately, the tobacco production improved greatly after 2008 due to several interventions. One of the interventions came from international companies such as China Tobacco and British American Tobacco. These two firms gave out plenty of loans, equipment, and expertise to the people of Zimbabwe. The intervention saw the production recover to a colossal 217,000 tonnes, which was the third highest tobacco production of all time. Today, the once-large swathes of land have been replaced by smaller pieces of land that export the biggest percentage of their produce to the Chinese market.
The Zimbabwe Electrical Supply Authority is tasked with regulating and controlling the distribution and supply of power to the nation. The nation’s energy is mainly produced from two large facilities. One of them is at the Kariba Dam along the Zambezi River while the other is the Hwange Thermal Power Station, which is next to the coal field at Hwange. Despite having these massive production stations, the nation does not meet the power demands. Consequently, this means that the nation is prone to power rationing from time to time.
The problems are further compounded by the age and neglect of the Hwange station. As such, it is unable to operate and produce electricity at full capacity. For these reasons, the nation was forced to import about 40% of its power in 2006 from the Democratic Republic of Congo (100 megawatts), Mozambique (200 megawatts), Zambia (300 megawatts), and South Africa (450 megawatts). In addition, the citizens are forced to use small generators all over the country. To put the dire situation in perspective, Zimbabwe was able to produce only 940 MW in May 2010 while the nation’s needs stood at 2500 MW.
Since the program to retake land from white owners was introduced, the tourism sector suffered in Zimbabwe. Figures show that the visitor count dropped by around 75% in 2000. Even most of the major airlines decided to pull out of Zimbabwe. Recently, in 2016, things have started looking better with the sector steadily improving and major airlines starting to return.