About Zimbabwe Country Profile Zimbabwe is a landlocked country, centrally situated in Southern Africa and sharing borders with Mozambique (to the East), South Africa (to the South), Botswana (to the West) and Zambia (to the North). It has a surface area of 390 757 square kilometres with approximately 1% being water. The country has a sub-tropical climate which supports a wide range of agricultural activities. Although Zimbabwe is landlocked, the country enjoys access to the sea ports of Beira and Maputo in Mozambique; Durban, Port Elizabeth and East London in South Africa; and Walvis Bay in Namibia. With a population of about 12 million people, the country’s literacy rate is over 90%, one of the highest in Africa. The country was a former colony of Britain and was granted independence in 1980.
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About Zimbabwe
Country Profile
Zimbabwe is a landlocked country, centrally situated in Southern Africa and sharing borders
with Mozambique (to the East), South Africa (to the South), Botswana (to the West) and Zambia
(to the North). It has a surface area of 390 757 square kilometres with approximately 1% being
water. The country has a sub-tropical climate which supports a wide range of agricultural
activities. Although Zimbabwe is landlocked, the country enjoys access to the sea ports of Beira
and Maputo in Mozambique; Durban, Port Elizabeth and East London in South Africa; and
Walvis Bay in Namibia. With a population of about 12 million people, the country’s literacy rate
is over 90%, one of the highest in Africa. The country was a former colony of Britain and was
granted independence in 1980.
Zimbabwe: Leading Urban Centres
Harare is the capital and leading city in Zimbabwe while Bulawayo, once the country’s most
important city, is now Zimbabwe’s second city and has been a centre of anti-government
movements.
Key Facts and Data
Official Name Republic of Zimbabwe
Capital Harare
Government Type Parliamentary democracy
Head of State President Robert Mugabe (since 1987)
Head of Government Prime Minister Morgan Tsvangirai (since 2009)
Population 12,084,000
Land Area 386,670 sq. km
Total GDP (US$) $7.5 billion
Per Capita GDP at PPP (US$) $1,500
Currency Zimbabwean dollar
Source: ISA - Country Report Zimbabwe, 2013
Economic Environment
Zimbabwe maintained a positive economic growth throughout the 1980’s and 1990’s but
declined from 2000 onwards where it experienced hyperinflation. The economy experienced
severe challenges over the decade, reaching crisis proportions in 2007 and 2008. According to
the draft Medium Term Plan (MTP), 2010, Gross Domestic Product (GDP) estimated to have
contracted by a cumulative 50.3 percent, official inflation peaked at 231 million percent in July
2008 and capacity utilisation in industry fell below 10 percent by January 2009.
The major factors that contributed to Zimbabwe’s poor economic performance during that period
include:
a) Unstable macroeconomic environment;
b) Hyperinflation leading to cost pressures and high interest rates;
c) Low and unstable commodity prices on the international market for primary exports such as
gold, tobacco, cotton;
d) Tight foreign exchange control policy characterised by unofficial multiple currencies
(parallel foreign exchange market) and fixed exchange rate policy used for surrender of
export earnings;
e) Foreign exchange shortages hindering the economy’s capacity to import essential inputs for
industrial production (Source: Zimbabwe National Trade Policy 2012-2016)
Source: ISA Economic Forecasts, national statistics, 2013
However, after embracing the Short Term Emergency Recovery Programme (STERP) and the
multi-currency system in 2009, the economy has been on a recovery path. The introduction of
the US dollar as the national currency has eliminated the exchange rate risk and the conditions
for doing business are better than in many neighbouring countries.
The below diagram shows that Zimbabwe's economy recorded real Gross Domestic Product
(GDP) growth of 9.4% in 2011 before decelerating to 5.0% in 2012. However, according to the
African Economic Outlook (2012), GDP growth is projected to improve to 5.5% in 2013.
Zimbabwe’s Economy
The country is endowed with rich natural resources including minerals, energy, popular tourist
attractions, as well as an excellent climate for agriculture. In the mining sector, Zimbabwe has
huge reserves of over forty different types of minerals that include gold, chrome, nickel, granite,
chrysotile asbestos, coal, copper, lithium, platinum and diamonds. The country is among the low-
cost producers of minerals due to abundant shallow deposits.
In the agricultural sector, the country produces high quality maize, tobacco, cotton, beef, sugar,
tea, coffee, wheat, soya beans, fruits, timber, floriculture and horticulture products, livestock and
dairy. The country also has a manufacturing industry base. The major industries include metals,
leather and leather products, wood and furniture, clothing and textiles, chemicals, paper and
Source: ISA Economic Forecasts, national statistics, 2013
plastic, among others. Most of these manufacturing industries make use of the agricultural and
mining output as their raw materials.
Real GDP growth is driven by growth in the above mentioned sectors such as agriculture.
Growth in agriculture is mainly driven by tobacco, maize, sugar and cotton. However, for 2012,
agricultural output was weighed down by the late onset of rains, and delays in the distribution of
inputs. On the other hand capacity utilisation in the manufacturing sector at the end of the first
half of 2011 was estimated at 57.2%, an improvement from 43.7% in 2010. However, capacity
utilisation in the manufacturing sector is constrained by the limited and high cost of capital,
erratic power and water supplies, the high cost of utilities, dilapidated infrastructure, obsolete
technologies and frequent machinery breakdown (Source: African Economic Outlook, 2012).
Zimbabwe – Regional Economies
The temperate highlands of central Zimbabwe have long attracted people for their good soil and
mild climate. As a result, this region which stretches from Harare to Bulawayo is the centre of
Zimbabwe’s industrial and agricultural sectors.
Zimbabwe: Economic Risk Outlook
The below diagram shows the challenges facing the economy including limited resources and the
lack of investment, inconsistencies, especially with respect to currency fluctuations and inflation.
These downside risks are further exacerbated by the disputes among the government and pending
national elections.
Source: ISA Economic Forecasts, national statistics, 2013
Global Economy
Budgetary Risk
Key Sector Risk
Investment
Labor
Currency Fluctua-tions
Inflation/Deflation
Recession
0 1 2 3 4 5 6 7 8 9 10
Risk Measurements
Source: ISA Economic Forecasts, national statistics, 2013
Political Environment During the period 1990 to 2008, the Republic of Zimbabwe experienced a political crisis that
negatively impacted the economy of the country. President Mugabe has dominated politics in
Zimbabwe since independence in 1980. In the past the opposition was ineffective but this has
changed with the formation of the Movement for Democratic Change (MDC). Zimbabwe politics
seem to revolve around land reform. President Mugabe’s policies have increasing met with vocal
opposition from the international community. The government’s decision to go ahead with land
redistribution schemes has thrown the country’s agricultural sector into chaos. While many in
Africa see him as a champion of black empowerment, others see him as the man responsible for
the economic collapse of what was once one of the continent’s richest countries. The major
problem with Zimbabwe’s politics to date has been the concentration of power in the presidency.
Zimbabwe Political Risk Outlook
Political risk levels have soared since President Mugabe began his campaign of intimidation
against the opposition and the country’s white population. The political risk levels have soared to
some of the highest levels in Sub-Saharan Africa.
Zimbabwe’s risk measurements
Terrorism
Global Conflict
Regional Conflict
Less Central Au-thority
Extremist Influence
Internal Conflict
0 1 2 3 4 5 6 7 8 9 10
ISA Risk Ratings– 0.0 to 1.9 = Low Risk– 2.0 to 3.9 = Low to
Moderate Risk– 4.0 to 5.9 = Moderate Risk– 6.0 to 7.9 = Moderate to
High Risk– 8.0 to 10 = High Risk
Source: ISA Economic Forecasts, national statistics, 2013
Zimbabwe’s Leading Political Forces
Zimbabwe African National Union - Patriotic Front (ZANU-PF)
The ZANU-PF party has ruled Zimbabwe since its independence in 1980 and is dominated by its
leader Robert Mugabe. The party is facing its biggest challenge with the rise of the opposition
MDC. The party originally followed a Marxist-Leninist line with regards to economic issues.
However, in recent years, the ZANU-PF has become a party of patronage, trying to balance a
wide-range of support groups. For many in the country and throughout Africa, the ZANU-PF
represents the fight for freedom against white rule.
Movement for Democratic Change (MDC)
The MDC has become the first serious threat to the ZANU-PF’s hold on power. After losing
2002’s controversial election, MDC leader Morgan Tsvangirai has been put on trial for treason.
The charges were only dropped in 2005. The MDC’s roots are among the black working class in
Zimbabwe, with its leader being a former miner. The MDC has become the party of people
opposed to the ZANU-PF, which includes the unemployed as well as whites. The MDC has been
dealt with a series of defeat’s by the ZANU-PF government in recent years. Nevertheless, the
party will retain its core of supporters but is unlikely to receive a fair chance at unseating the
ZANU-PF at any time in the near future.
The Structure of Zimbabwe’s Government
Zimbabwe is a Semi-Presidential Republic. The structure of the Zimbabwean Government
separates power between the executive branch, the legislative branch and the judicial branch.
The Executive Branch
The executive branch currently consists of two executives, the President and the Prime Minister,
both of which serve 5-year terms. Robert Mugabe holds the Presidential seat while Morgan
Tsvangirai holds the Prime Minister seat. The President is the head of the state and is in charge
of the Cabinet. The Prime Minister, on the other hand, is head of government and oversees the
Council of Ministers. There are two vice presidents and two deputy prime ministers. Joseph
Msika and Joice Mujuru hold the vice presidential positions, and Thokozani Khuphe and Arthur
Mutambara hold the deputy prime minister positions.
The Legislative Branch
Legislative power is vested in both government and parliament. The Cabinet and the Council of
Ministers hold legislative power along with the elected Parliament. The Cabinet, overseen by the
president, is the policy decision-making body. The Council of Ministers headed by the prime
minister functions as a liaison office. The parliament is divided between the Senate and the
House of Assembly. The House of Assembly consists of 120 members elected by the common-
roll electorate, 10 tribal chiefs, 12 presidential appointees, 8 presidentially appointed provincial
governors, a speaker and an attorney general. Sixty-six members make up the Senate; five
representatives from each province constitute 50 of these members.
The Judicial Branch
The Zimbabwean judicial branch function consists of a Supreme Court and local court system.
A Chief Justice is appointed by the president to direct the judicial system in Zimbabwe.
Social Environment
Population
The population of Zimbabwe on 18 August 2012 was 12,973,808 and it is to be noted that the
number of estimated Zimbabweans living abroad range between 3 million and 5 million,
following the country's economic collapse. Of this population 6 234 931 were males and 6 738
877 were females. This means that the overall sex ratio was 93 males per every 100 females. The
population constituted 3 076 222 households, leading to an average of 4.2 persons per household.
With an area of 390 757 square kilometres, Zimbabwe has a population density of 33 persons per
square kilometre.
Source: Zimstat, 2012
Distribution of Population by Province
The distribution of the population by province for 2012 indicates that Harare with 16 percent of
the total population is the most populous province. Manicaland Province is next with 14 percent,
followed by Midlands (13%), Masvingo (11%), Mashonaland West (11%), Mashonaland Central
(9%), Matabeleland North (6%), Bulawayo and Matabeleland South with (5%) each (Source:
ZimStat, 2012).
Total Population by Age Group
Ethnic groups
The major ethnic groups are the Shona, the Karanga and Ndebele. 71% of the population
belongs to the Shona ethnic group while 16% are Ndebele. The Shona are the main ethnic group
of northern Zimbabwe. The white minority are less than 2% of the population. There are small
minorities of mixed and Asian descent.
Source: ISA Economic Forecasts, national statistics, 2013
Languages
The official Zimbabwe languages are English, Shona and Ndebele. English is mostly solely used
in all business private and government. Local languages, led by Shona, are the dominant
languages of everyday use.
71.0%
16.0%
11.0%
2.0% Ethnic Groups
Shona
Ndebele
Other African
Others
Source: ISA Economic Forecasts, national statistics, 2013
Source: ISA Economic Forecasts, national statistics, 2013
71.0%
16.0%
13.0%
Languages
Shona Ndebele
Others
Literacy
Zimbabwe has an adult literacy rate of approximately 90% which is amongst the highest in
Africa.
Religions
Zimbabwe religion plays an important role in the day-to-day life of the Zimbabwean people. The
majority of Zimbabweans are of Christian faith, often mixing their beliefs and practices with
those of local religions.
50.0%
25.0%
24.0%
1.0%
ReligionsMixed
Christian
Indigenous Be-liefs
Others
Source: ISA Economic Forecasts, national statistics, 2013
Business Hours
Business- 8.00 am - 4.30/5.00 pm
Lunch Breaks - Between 12.00 and 2.00 pm
Note: Saturday: Government offices are closed but the commercial sector opens in the morning
until noon.
Banking Hours
Monday to Friday: 8.00 am - 3.00 pm
Wednesday: 8.00 am - 1 pm
Saturday: 8.00 am - 11.30 am
Media and Marketing Channels
The rapid adoption of technology is redefining the way Zimbabweans communicate. In the
decade ending 2009, the number of mobile subscribers grew tenfold, while the number of
internet users grew at nearly three times that rate. In urban and peri-urban areas, 88% of
Zimbabweans use mobile phones than watch TV (74%) or listen to the radio (59%). The mobile
phone as an internet device is popular with 26% of mobile phone owners (comprised mainly of
trendy Aspirants, progressive affluent and evolving Juniors) use their mobiles to go online and
visit social networking websites such as Facebook.
Newspapers are also widely read in Zimbabwe’s main urban centres, particularly Harare and
Bulawayo. They are mostly bought by relatively affluent people who can afford to buy them.
However, each copy sold passes through the hands of many readers.
Climate
Most of Zimbabwe is a highland plateau. In the east, the land slopes downwards toward the
border with Mozambique. Zimbabwe has a moderate climate due to its higher altitude. In
Zimbabwe, rains come principally in December, January, February and March. Zimbabwe's
higher eastern areas usually receive more rainfall than the lower-lying western ones.
By April and May most of the rain is gone, leaving a verdant setting. The nights in June, July and
August are much cooler while the days are still clear and warm. During the month September
and October the temperatures start rising once again. The month November is quite
unpredictable in the sense that it can be hot and dry.
Transportation in Zimbabwe
Road Transportation
There are 88,100 km of classified roads in Zimbabwe, 17,400 km of which are paved. About 5
percent of the network is classified as primary roads and has some of the most trafficked arterials
that link Zimbabwe with its neighbours. A portion of the Pan-Africa highway passes through
Zimbabwe. This part of the road network plays a major role in the movement of the country’s
imports and exports as well as transit freight. Some 14 percent of the network is classified as
secondary roads that link the main economic centres within the country, enabling internal
movement of people and goods.
In general, Zimbabwe has a good network of tarred roads which are lacking maintenance, but are
fit for use. On the major road route from Beira to Mutare, the first 170 km of road after crossing
the border of Zimbabwe is in relatively good condition.
Rail Transportation
Rail transport from either Beira or Durban into Zimbabwe has been a challenge, mainly due to
the fact that National Railways of Zimbabwe (NRZ) has experienced significant cash flow
constraints. Exclusive rail routes from both ports to Harare would eventually have to rely on
NRZ, and its limited resources have impacted the operational viability of the system to deliver an
efficient service at minimal risk. As a result, commercial businesses have resorted to road
transport. Although rail costs are lower from either port to Zimbabwe, commercial businesses
currently prefer road because it is viewed as more efficient and less risky.
Source: Zimbabwe USAID – Best Analysis, 2012
Airports
There are three main airports in Zimbabwe namely; Harare International Airport, Bulawayo
Joshua Mqabuko Nkomo Airport and Victoria Falls Airport. Harare is the main hub, but its
operations and that of the other major airports have been affected by the poor performance of the
economy. During 1997-2007 more than twenty scheduled airlines discontinued services in
Zimbabwe, including major carriers such as Air France (1997), KLM (1998), Lufthansa (2000),
Swiss Air (2000), and British Airways (2007). At present, 12 airlines operate services to and
from Zimbabwe. These include Air Zimbabwe, which is the primary domestic carrier owned by
the Government, Kenya Airways, Air Malawi, Botswana Airline, South African Airways, South
African Airlink, Comair (which is a franchise partner with British Airways), Air Namibia, Fly
Kumba, Zambezi Airline, Ethiopian Airlines and Angola Airlines.
Seaports
Zimbabwe is landlocked. Currently, the ports of Durban in South Africa, and Beira in
Mozambique, are mostly used for trading of goods.
Port of Beira, Mozambique
The Port of Beira, Mozambique is located on the east African coast, 20 km from the open sea
and at the mouth of the Pungwe River at Longitude 34º 50’ E and Latitude 19º 51’ S. It is the
second largest port in Mozambique, and is considered one of Africa’s most modern ports in
terms of equipment. The port has served primarily as a transit gateway, handling import and
export cargo from Zimbabwe and other countries in the region. The Port of Beira handles a wide
variety of traffic, including containers, break bulk, general (bulk) cargo (wet and dry), and roll
on-roll off cargo. The port handled nearly 160,000 twenty-foot equivalent units (TEUs) in 2011,
approximately 2.15 million MT. Port authorities expect this figure to increase by about 50
percent, to 239,000 TEUs, by 2015, based on anticipated future increased capacity. However,
congestion is a major challenge at the Port of Beira. This congestion is mostly due to large
amounts of silt deposited annually from the two rivers that serve the channel.
Port of Durban, South Africa
Africa’s largest port, the Port of Durban, is situated at longitude 31º 02’E and latitude 29º 52’S,
680 nautical miles northeast of Cape Agulhas, the southernmost tip of continental Africa. The
port handles approximately 4,550 vessels, 42.6 million MT of bulk cargo, and 2.5 million TEUs
(approximately 34.5 million MT) annually. In comparison, the Port of Beira handled 160,000
TEUs in 2011, only 6 percent of Durban’s annual quantity. The container terminal can handle
vessels with a draft of up to 12 metres, and has 2,128 metres of quayside divided into seven
berths. The Port of Durban would be the recommended port of entry for goods, largely due to the
fact that ocean freight costs to Durban are less expensive than to Beira. And, also transport from
Beira to Zimbabwe is also viewed as riskier than transport from Durban to Zimbabwe due to
long transit times, breakdowns, and theft along the route.
Sea-Rail Freight Rates from Mauritius to Harare
The sea freight applicable from Mauritius to Zimbabwe, are as follows:
Description
Destination
Currency
20 FT 40 FT FAS CSF Carrier
T/Time
OCEAN SA
(Durban)
USD 600 1100 80/160 11 MSC 5
days
Description
Destination
Currency
20 DV (22000kg)
40 DV (26000kg)
THC ISPS Carrier
T/Time
RAIL ZIMBABW
E (Harare)
ZAR 39575 55775 1229/181
6
12
USD
MSC 21
days
Notes:
Local charges upon departure
Description 20 FT 40 FT
Loading MUR 2247 MUR 4494
Marine USD 50 USD 100
Handling USD 33 USD 66
B/L USD 65 USD 65
Dossier Fee MUR 500 MUR 500
Agency Fee MUR 500 MUR 500
Customs Fee MUR 850 MUR 850
Fowarding Fee MUR 300 MUR 300
Air Cargo rates from Mauritius to Zimbabwe
Cargo service by Air Mauritius is as follows:
Destination Airpor
t
Routing Airlin
e
MIN -45K +45K +100K +200
K
+300K +500
K
+1000K
Zimbabwe Harar
e
Via JNB 350
0.00
255.
30
99.7
5
94.50 87.1
5
86.15 74.0
5
73.00
Via JNB EB/
4Z
350
0.00
255.
30
79.3
0
74.05 66.7
0
65.70 64.6
0
63.55
The Zimbabwean Market Context
Understanding and targeting consumers groups in ZimbabweThe Nielsen Emerging Market Insights Study, 2012 provides an in-depth understanding of the
Zimbabwean market segments and consumers behaviour. The study is based on face-to-face
surveys from a sample of 5,000 urban and peri-urban residents between the ages of 15 and 45
across around key cities The study provide vital information into growth opportunities within the
marketplace, insight into consumer attitudes that drive decisions on what Zimbabwean
consumers watch and buy.
The Zimbabwean economy is fast recuperating after a decade of economic contraction. This has
resulted in greater confidence across all consumer groups. Mauritian companies eager to
participate in Zimbabwe’s growth story will have to consider strategies that target both the low
income and affluent consumer segments. The high literacy combined with high penetration of
mobile and print media makes it convenient for companies to communicate to consumers their
new product offerings.
It is important to note that despite the recent growth, the wide income disparity between
consumer segments still exists. Nielsen’s Emerging Markets Insight Survey, conducted in
different cities in Zimbabwe stated that at the lower end of the income scale, Struggling
Traditional and Female Conservatives made up of 52% of respondents, but accounted for just
35% of the total income. Though they have high usage of mobile phones, TVs and radios, these
segments are underdeveloped for print and internet and display lower consumer packaged goods
(CPGs) consumption than other Zimbabweans.
In sharp contrast, Trendy Aspirants and Progressive Affluents comprised just 11% of the
population, but accounted for 28% of the total income. These consumer segments are more likely
than the general population to own consumer durables such as TVs, DVD players, satellite
dishes, refrigerators, and personal computers/laptops. They are also more likely to read
newspapers and magazines and tend to use their mobile phones to connect to the internet. Trendy
Aspirants like to spend time with friends and are willing to pay more for products that are
tailored specifically to their needs.
Source: (Emerging Markets Insight Survey- 2012)
Overall, Zimbabweans are family oriented, but traditional values do not limit a free lifestyle.
Though affordability, familiarity and availability are the top drivers of Consumer Packaged
Goods category purchasing, Zimbabweans also continuously express an interest in trying many
newer categories like air fresheners.
Consumers’ attitude to price
Zimbabweans are very conscious and sensitive to price to the extent that they will buy a product
which is a cent less from one shop to another. It is generally noted that 60 percent of high income
earners, 88 percent of middle income earners and 90 percent of low income earners place price
ahead of product quality, personal needs and preferences, brands, shop reputation, displays, and
family size in determining quantity of goods purchased, because Zimbabwe is just recovering
from a depressed economy.
Consumer Spending
Consumer behaviour focused on how individuals make decisions to spend their available
resources (time, money, effort) on consumption-related items. This includes what they buy, why
they buy it, when they buy it, where they buy it, how often they buy it, and how often they use it.
Consumer Packaged Goods (CPG) categories account for 31% of Zimbabwean monthly
household expenditure. An organised retail landscape is popular in Zimbabwe as almost over
78% of the people buy their groceries mainly from supermarkets. Traditional trade outlets, such
as tuck shops (small shops selling mostly food items) or kiosks, are less important in Zimbabwe,
with only one in four of consumers likely to shop at them.
Affluent consumer segments, such as Trendy Aspirants and Progressive Affluents, showed a
tendency towards buying value-added products like breakfast cereals, energy drinks and air
fresheners. In contrast, lower income consumer segments, such as Female Conservatives and
Struggling Traditionals, have low to average consumption of most CPG categories, yet they
embrace a desire to try products like packaged juices, which are higher on the value chain. It has
been noted that across all segments, affordability, familiarity and availability are the top
purchase drivers.
Consumers’ attitude to quality and brand
The important product decisions by Zimbabweans are variety, product performance, product
features, product design, product presentation, sizes and brand name. Quality is a critical
purchase criterion for Zimbabwean high income earners. Although the middle and the low
income earners appreciate quality they are limited by their disposable income. Brands also play
an important role in Zimbabwean purchase decisions. The research indicates that Zimbabweans
are loyal to their long tasted brands and the majority of consumers have a tendency to equate
popular brands with quality. For example Mazoe drink is popular to Zimbabweans because of its
quality and the brand has stood because of its taste giving it an advantage over other drinks.
