Zimbabwe
Out of all African countries, the economy of Zimbabwe fares the worst in many areas, a lot of their issues being the result of the hyper-inflation issue that they have had in the past. A study conducted by the Africa Progress Panel found that Zimbabwe would take around 190 years to double their GDP income if they were to continue at this rate, while for other African countries like Uganda, Lesotho, and Sudan (to name a few), it would only take around 22 years to double their GDP. That’s more than eight times less than the years it would take for Zimbabwe.
Country Statistics:
Gross Domestic Product (GDP): 13.49 Billion US Dollars
Growth Rate: 4.5%
GDP Per Capita: 1690 PPP Dollars
Money Made From Imports (2015): 5.87 Billion US Dollars
Money Made From Exports (2015): 2.72 Billion US Dollars
Country Statistics:
Gross Domestic Product (GDP): 13.49 Billion US Dollars
Growth Rate: 4.5%
GDP Per Capita: 1690 PPP Dollars
Money Made From Imports (2015): 5.87 Billion US Dollars
Money Made From Exports (2015): 2.72 Billion US Dollars
International Trade
Zimbabwe’s main trade partner is South Africa, which is the country they do the most importing and exporting with. This is probably because the two countries are right next to each other, making it easy to send goods to each other. They also do a fair amount of trading with other African countries like Mozambique and Zambia. See the pie charts below on Zimbabwe’s import origins and export destinations for more information. Zimbabwe makes most of their money off of metals, raw sugar and raw tobacco, and mineral products, so most of what they export is natural material. To see more about their trade products, see the pie charts below.
Currently, there are several trade sanctions and embargoes imposed on Zimbabwe by other nations. The most notable out of all of these is the arms embargo, imposed on Zimbabwe by the United Kingdom, European Union, and the United Nations (Who have imposed 15 arms embargoes on Zimbabwe since 1992). This means that companies inside the UK, EU, and UN cannot send arms to Zimbabwe. They have imposed this arms embargo because the government of Zimbabwe has been accused by many of abusing humans rights and using violence against its own people. An arms embargo has the potential to restrict the flow of arms, military equipment, and ammunition to the government. As a result, arms embargoes could help reduce the incidents of politically motivated murders, human rights abuses, and the intensity of the violence in the country. Some have claimed that an arms embargo would result in a black market in arms, but studies have shown that arms embargoes do make it more difficult for violent states and rebel groups to acquire weaponry. Aside from arms, most developed countries are very strict about what goods they export into Zimbabwe. In the United Kingdom, for example, you need a special export license if you wish to export any controlled strategic goods (such as radioactive sources, dual-use goods, military goods, and products that can be used for repression and torture) from the UK to Zimbabwe. Aside from trade, Zimbabwe is also subject to other sanctions, such as financial and travel sanctions.
Hyperinflation & Unemployment
The reason that the economy of Zimbabwe is doing so badly may have something to do with the fact that the controlled system makes it difficult for people to start businesses. Because of the government control, starting a business is slow and costly due to the high taxes and tariffs. On top of that, the labour market is highly regulated, making it difficult to fire or hire workers, and in 2008 the unemployment rate was at a shocking 94%, the highest unemployment rate in the world at the time. The unemployment rate in Zimbabwe today isn't really known, and any data on it is not very reliable. Currently, most websites will tell you that the formal unemployment rate is 84%, but the reason that this isn't reliable is because most people in Zimbabwe are working informally, or they may be self-employed, such as the people that own their own farms. Most Zimbabweans prefer to work informally because of the government's strict policies on hiring and firing workers.
Even now, unemployment is still quite high in Zimbabwe, along with poverty. The main cause of this is the shrinking economy and hyperinflation that began in the late 1990’s, which only started to even out in 2009. The inflation rates were at their peak in 2008, and as you can see in Table 1, the inflation rate went up the highest in October and November of that year. The cause of this hyperinflation was mainly because of poor and corrupted government decisions. As the unemployment rates got higher, the large amounts of money were printed so that they could raise the salaries for the military and government, destroying all faith in the currency and triggering hyperinflation as a result. It was disastrous for the economy, and by the mid 2000’s inflation had risen so high that more than 100,000,000 Zimbabwean dollars were needed for simple daily transactions. As an attempt to solve the problem, the government stopped printing Zimbabwean dollars in 2009, and starting using currencies from other countries as a replacement. One of these currencies was the US dollar. But trading in one of the weakest currencies in the world for one of the strongest wasn’t a good decision, because soon afterwards the country started suffering a major deflation, damaging the already unstable economy even further.
Even now, unemployment is still quite high in Zimbabwe, along with poverty. The main cause of this is the shrinking economy and hyperinflation that began in the late 1990’s, which only started to even out in 2009. The inflation rates were at their peak in 2008, and as you can see in Table 1, the inflation rate went up the highest in October and November of that year. The cause of this hyperinflation was mainly because of poor and corrupted government decisions. As the unemployment rates got higher, the large amounts of money were printed so that they could raise the salaries for the military and government, destroying all faith in the currency and triggering hyperinflation as a result. It was disastrous for the economy, and by the mid 2000’s inflation had risen so high that more than 100,000,000 Zimbabwean dollars were needed for simple daily transactions. As an attempt to solve the problem, the government stopped printing Zimbabwean dollars in 2009, and starting using currencies from other countries as a replacement. One of these currencies was the US dollar. But trading in one of the weakest currencies in the world for one of the strongest wasn’t a good decision, because soon afterwards the country started suffering a major deflation, damaging the already unstable economy even further.
Poverty & Wealth Distribution
Poverty rates in 2007 went up to 80%. The people that did do work were barely paid, with most general workers in 2006 only getting 200 Billion Zimbabwean dollars per month. While that may sound like a lot, it’s only equivalent to one US dollar. To make things even worse, the wealth distribution in Zimbabwe is hugely unequal, with the poorest 10% of the population only making 1.9% of the economy, and the richest 10% making 40.4% of the economy. The salaries and wages in the country are also highly skewed in terms of group, class, sex, and race. As you can see in the table above, Africans account for 97.6% of the population in Zimbabwe, but only have a 60% share of the wages and salaries, while Europeans only make up 2% of the population, yet have a disproportionate 37% share. It is also observed that even though the white population is so small, they control over two thirds of the country's GNI. "In the agriculture, manufacturing and financial sectors, whites earned 2.4, 7.3 and 3.5 times more than their black counterparts, respectively." (OSISA) The reason for this is that the Europeans are usually educated and more skilled than the majority of the African population, so they take up more of the jobs. Studies carried out by the Open Society Initiative of Southern Africa (OSISA) show that in Zimbabwe African women earn half of what their male counterparts do. Many black women do not work, because they are not entitled to paid maternity leave, and they also must seek consent from their husband, or, if they are not married, a male family member, if they wish to enter employment. Many countries have announced that they will not lift these sanctions and embargoes until the "progress has been made on democracy, human rights and the rule of law." (Government of the UK).