The Economic Activity of Zimbabwe

The economy of the Republic of Zimbabwe was once the richest and freest in Africa. However, in the past decades, the country’s economic status has worsened and lead to an epic economic downfall that the country has been experiencing up until today. Several factors have caused this happening, but facts and figures as well as the people point the finger to the government.

The economy of Zimbabwe now suffers from high unemployment rate (95%), poverty (almost 70% of the population below poverty line), hyperinflation (14% inflation rate) and corruption in the government. This has started when the country was involved in the war in the Democratic Republic of Congo which cost their economy hundreds of millions of US dollars. Due to the huge budget deficit that the country faces, the Reserve Bank of Zimbabwe has routinely printed money to fund the said deficit leading to hyperinflation. At that, Zimbabwe’s own currency was suspended and the country has adapted the US dollars as the main medium of business; having said that it has been recorded in the year 2007 that one US dollar has been equivalent to 30,000 Zimbabwean dollars. Now, the country is listed as the world’s 2nd least economically free country, and is last among all South African countries.

About 66% of the work force belongs to the agricultural sector. It has declined at the start of the 21st century, but still generates a significant rate of 15% to the country’s GDP. Agricultural products include corn (primary product), tobacco, cotton, coffee, sugarcane, wheat, and peanuts. Zimbabwe’s industries have generated the most compared to other sectors, and these industries include mining – coal, gold, copper, platinum, tin, nickel – steel, wood such as teak and mahogany, cement, textile and food processing.