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COUNTRY PROFILE

ZimbabweOur quarterly Country Report on Zimbabwe analyses currenttrends. This annual Country Profile provides backgroundpolitical and economic information.

1998-99The Economist Intelligence Unit15 Regent Street, London SW1Y 4LRUnited Kingdom

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Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK

ISSN 0269-4360

Comparative economic indicators, 1997

0 2 4 6 8 10 12

South Africa

Angola

Zimbabwe

Tanzania

Botswana

Mauritius

Zambia

Namibia

Malawi

Mozambique

Swaziland

Lesotho

Gross domestic product$ bn

Sources: EIU estimates; national sources.

129.2129.2129.2129.2129.2129.2129.2129.2129.2

0 1,000 2,000 3,000 4,000

Mauritius

South Africa

Botswana

Namibia

Swaziland

Angola

Zimbabwe

Lesotho

Zambia

Tanzania

Malawi

Mozambique

Gross domestic product per head$


0 2 4 6 8 10

Lesotho

Angola

Botswana

Mozambique

Malawi

Mauritius

Zimbabwe

Tanzania

Swaziland

Zambia

South Africa

Namibia

Gross domestic product% real change, year on year


0 10 20 30

Angola

Zambia

Zimbabwe

Tanzania

Swaziland

Lesotho

Malawi

Mozambique

Botswana

Namibia

South Africa

Mauritius

Consumer prices% change, year on year


1,7001,7001,7001,7001,7001,7001,7001,7001,7001,700

EIU Country Profile 1998-99 © The Economist Intelligence Unit Limited 1998

July 1st 1998 Contents

3 Basic data

4 Political background4 Historical background6 Constitution and institutions6 Political forces8 International relations and defence

9 The economy9 Economic structure

10 Economic policy12 Economic performance14 Regional trends

14 Resources14 Population15 Education15 Health16 Natural resources and the environment

16 Economic infrastructure16 Transport and communications17 Energy provision18 Financial services19 Other services

20 Production20 Manufacturing21 Mining and semi-processing21 Agriculture24 Construction

24 The external sector24 Merchandise trade26 Invisibles and the current account26 Capital flows and foreign debt27 Foreign reserves and the exchange rate

29 Appendices29 Regional organisations33 Sources of information35 Reference tables35 Defence expenditure35 Central government finances36 Budget account expenditure36 Money supply36 Interest rates

1

© The Economist Intelligence Unit Limited 1998 EIU Country Profile 1998-99

37 Gross domestic product37 Gross national product by expenditure38 Gross domestic product by sector38 Employment and earnings by industrial sector and area39 Prices39 Enrolments at educational institutions39 Railways finance and traffic40 Airport traffic40 National energy statistics40 Assets of financial institutions41 Stock-exchange indicators41 Retail trade41 Foreign visitors42 Manufacturing production by value42 Manufacturing production by volume43 Minerals production by value43 Minerals production by volume44 Crop sales to/through marketing authorities44 Sales of livestock products45 Construction statistics45 Foreign trade by value46 Exports by volume46 Main trading partners48 Balance of payments, IMF estimates48 Balance of payments on current account49 Balance of payments on capital account49 Net official development assistance from OECD and OPEC areas50 External debt50 Net resource flows51 Foreign reserves51 Exchange rates

2


Zimbabwe

Basic data

Land area 390,580 sq km

Population 11.9m (mid-1998 EIU estimate)

Main towns Population in ’000, 1998 (EIU estimates)

Harare (capital) 1,500Bulawayo 800Chitungwiza 600Gweru 170Mutare 165Kwekwe 100Kadoma 90Masvingo 70

Climate Subtropical

Weather in Harare(altitude 1,472 metres)

Hottest months, October and November, 16-27°C; coldest months, June andJuly, 7-21°C (average daily minimum and maximum); driest month, July,1 mm average rainfall; wettest month, January, 196 mm average rainfall

Languages English (official), Shona, Ndebele and local dialects

Measures Metric system

Currency Zimbabwe dollar (Z$)=100 cents. Average exchange rate in 1997: Z$11.89:US$1.Rate on June 26th 1998: Z$17.98:US$1

Time 2 hours ahead of GMT

Public holidays in 1998 January 1st, Good Friday, Easter Monday, April 18th and 19th (IndependenceDay and Defence Forces’ National Day), May 1st (Workers’ Day), May 25th(Africa Day), August 11th and 12th (Heroes’ Days), December 25th and 26th(Christmas and Boxing Day). Many firms close for one to two weeks over theChristmas and New Year period

Zimbabwe: Basic data 3


Political background

Zimbabwe became independent in 1980, after decades of white minority rule.The country is a de jure democracy but has been governed since independenceby the Zimbabwe African National Union-Patriotic Front (ZANU-PF) under thecurrent president, Robert Mugabe. After proclaiming its socialist orientation inthe 1980s, the government has been pursuing economic reforms since 1990.However, economic conditions have failed to improve, in part because ofsustained mismanagement, and popular opposition to the president hasbeen rising.

Historical background

The early years The Shona, the largest ethnic group in Zimbabwe, settled the area now knownas Zimbabwe over 1,000 years ago. They were primarily agriculturalists andhunters. The Ndebele, the other main ethnic group, are related to the Zulus andarrived in the area from what is now South Africa in the mid-19th century. TheNdebele established a kingdom in the Bulawayo area, dominating the peoplesin their immediate vicinity. Unlike the Shona, the Ndebele were primarilypastoralists, allowing the two to co-exist, albeit in an uneasy relationship. Thewhites, now a small minority, arrived in 1890 in the “Pioneer Column”, amovement organised by Cecil Rhodes in search of mineral wealth. Their arrivalwas much more disruptive, particularly after the relative failure of miningexploitation, as whites began to take over large tracts of land for their own use,an issue which remains contentious in present-day Zimbabwe.

Rhodesia Southern Rhodesia, as the country came to be known, never experienced directcolonial rule and was governed by Mr Rhodes’s British South Africa Companyuntil 1923, when the white electorate voted narrowly against incorporationinto the Union of South Africa, choosing the status of “self-governing colony”instead. In 1953 Southern Rhodesia merged with Northern Rhodesia (nowZambia) and Nyasaland (now Malawi) in the Central African Federation, andSalisbury (now Harare) became the capital city. Increasing opposition from theAfrican population, and the subsequent independence of Zambia and Malawi,led to the demise of the federation in 1963.

White voters in Southern Rhodesia brought the Rhodesian Front (RF) to powerin 1962. Determined to prevent black rule, the whites opted for a UnilateralDeclaration of Independence (UDI) in 1965 under the premiership of IanSmith, and the country changed its name to Rhodesia. The UK reacted byimposing bilateral economic sanctions and sponsoring UN Security Councilmandatory economic sanctions in 1966. Initially selective, sanctions weremade comprehensive in 1968. However, South Africa and Portugal openlyignored the sanctions, while others failed to prosecute companies that wereviolating them.

The African challenge The main challenge to white rule came from increasingly militant nationalistorganisations, which represented the disenfranchised African majority. Thefirst major organisation was the Zimbabwe African People’s Union (ZAPU), led

4 Zimbabwe: Historical background


by Joshua Nkomo, which was banned in 1962. The Zimbabwe African NationalUnion (ZANU), later led by Robert Mugabe, split from ZAPU in 1963. ZANUincreasingly became the focus of the Shona majority’s aspirations, while ZAPUretained the loyalty of most Ndebele. Limited guerrilla activity began in 1966,but in 1972 ZANU’s military campaign in the north-east marked the beginningof an increasingly successful challenge to the Smith regime. While there waslittle military co-ordination between the two organisations, ZAPU and ZANUlinked up in the Patriotic Front (PF) alliance in 1976, presenting a united frontin the subsequent negotiations for independence.

Independence In 1978 the embattled white government accepted an “internal settlement”,mainly with Bishop Abel Muzorewa’s United African National Council(UANC). The resulting “Zimbabwe-Rhodesia”, nominally led by BishopMuzorewa, was never recognised by the international community, and warcontinued. In 1979, however, the UK government convened a conference atLancaster House in London and all parties made concessions. An interim UKadministration took over in 1980 to supervise “free and fair” elections andMr Mugabe’s ZANU-PF won power in February 1980, garnering 57 of the 80African seats, while Mr Nkomo’s ZAPU won 20 seats. ZANU-PF has ruled thecountry ever since, winning subsequent elections in 1985, 1990 and 1995.

In 1980, as part of the policy of national reconciliation, Mr Mugabe formed abroad-based cabinet, which included Mr Nkomo and two RF members. How-ever, Mr Nkomo and the other ZAPU members were dismissed from cabinetwhen relations between the two parties deteriorated in the mid-1980s. A dissi-dent movement in Matabeleland was ruthlessly suppressed by the army butremained active until 1988. Although Mr Nkomo denied that ZAPU played anypart in events in Matabeleland, the government held ZAPU largely responsiblefor the movement, complicating unity talks between ZANU-PF and ZAPU.Negotiations eventually succeeded in 1987, leading to the creation in 1989 ofa single ZANU-PF party, with Mr Mugabe as its leader and Mr Nkomo as one ofthe country’s two vice-presidents.

Important recent events

1995: ZANU-PF wins almost all seats in the general election. A drought hits theeconomy. The IMF programme is curtailed.1996: Robert Mugabe is re-elected president, in the absence of candidates from theopposition. Major strikes paralyse health and other services.1997: Protests by war veterans force the government to pay gratuities. The resultingtax increases spark widespread strikes by the Zimbabwe Congress of Trade Unions(ZCTU). Seeking to deflect the growing dissatisfaction, Mr Mugabe announceslarge-scale expropriation of white-owned land. Economic conditions worsen and thecurrency comes under attack.1998: Food price increases spark the worst riots in Harare since independence.Opposition to the government continues in the form of ZCTU-organised strikes anddemonstrations by students, and there are signs that Mr Mugabe is losing supportfrom ZANU-PF. The government backs down on the land issue and the IMF agreesto release vital balance-of-payments support, but general unease continues.

Zimbabwe: Historical background 5


Rising opposition Although the government has embarked on economic reforms since 1990, thishas failed to bring about an improvement in living standards, and popularopposition to the government has been rising. Since 1997 the country has beenin a state of turmoil, and several important sectors of society, including theindependent press and, increasingly, the main trade union, the ZimbabweCongress of Trade Unions (ZCTU), are now actively pushing for Mr Mugabe’sretirement. More immediately worrying for Mr Mugabe, however, is that evensenior members of his own party are questioning whether he should continueto lead the country until the end of his current term in 2002.

Constitution and institutions

A revised constitution The constitution agreed at Lancaster House provided for a Westminster-styleparliament, with a prime minister heading the executive. Zimbabwe became arepublic within the British Commonwealth at independence, with a presidentas titular head. The constitution also provided for an independent judiciary,which has subsequently sought to defend its independence against politicalinterference.

In 1987 parliament revised the constitution, replacing the office of primeminister with an executive presidency, and providing for two vice-presidents.A provision reserving 20 parliamentary seats for the white minority was alsoabolished. In 1989 the Senate was abolished and the remaining House ofAssembly was enlarged to 150 seats (comprising 8 provincial governors,10 chiefs, 12 members appointed by the president and 120 elected members).

In 1990, in line with the terms of the Lancaster House agreement, the govern-ment of Zimbabwe amended the constitution so that changes to its provisionsrequired only a two-thirds majority—instead of the previous 100%. The state ofemergency, introduced in 1966, finally lapsed in 1990.

Political forces

Main political figures

Robert Mugabe: presidentEmmerson Mnangagwa: minister of justiceLeonard Tsumba: governor of Reserve Bank of Zimbabwe (RBZ, the central bank)Dumiso Dabengwa: minister of home affairsKumbirai Kangai: minister of land and agricultureHerbert Murerwa: minister of financeEddison Zvobgo: minister without portfolioMorgan Tsvangirai: secretary-general of the Zimbabwe Congress of Trade Unions (ZCTU)Margaret Dongo: independent MP for Harare-SouthNick Swanepoel: president of the Commercial Farmers’ Union (CFU)

6 Zimbabwe: Constitution and institutions


ZANU-PF remainsdominant

ZANU-PF and its leader, Mr Mugabe, have dominated the country since inde-pendence. The party’s ideology used to be broadly Marxist-Leninist, and itsleaders—in particular Mr Mugabe—were committed to socialism. However, thefall of communism in eastern Europe and the former Soviet Union led to somebelated re-evaluation of political principles and economic policies and in 1996adherence to Marxism was officially abandoned.

In the absence of any official ideology, ZANU-PF has increasingly developedinto a patronage-based organisation. As a result, government has remainedtop-heavy, with a proliferation of ministries and responsibilities serving to bal-ance the competing interests of the various ethnic factions in the party: Zezuru,Karanga, Manyika, the Ndebele and the whites. This has resulted in widespreadelectoral apathy, and low voter turnouts of barely 50% in general elections and5% in by-elections have rendered its victories hollow. The other parties whichparticipated in the 1980 election have since virtually disappeared.

An emerging opposition The ZCTU, strengthened by a number of successful strikes against unpopulartaxes and levies, emerged from the political and economic turmoil of late 1997as a significant force in channelling popular opposition against the government.Similarly students, emboldened by President Suharto’s downfall in Indonesia inMay 1998, have increasingly taken to the streets to demand Mr Mugabe’s resign-ation. To date, however, protest has yet to coalesce into a structured opposition,although a National Constitutional Assembly (NCA) was launched in January1998 by church groups, trade unions and human-rights bodies with a view torewriting the country’s constitution. In addition, the sole independent memberof parliament, Margaret Dongo, has recently formed the Movement ofIndependent Electoral Candidates (MIEC).

Election results

1980 1985 1990 1995 No. of seats % of votes No. of seats % of votes No. of seats % of votes No. of seats % of votes

ZANU-PF 57 63 63 76 116 78 117 68

ZAPU 20 24 15 18 – – – –

RF (CAZ)a 20 n/a 15 n/a – – – –

ZANU (Ndonga) 0 2 1 1 1 n/a 2 n/a

UANC 3 11 0 3 0 – 0 –

ZUMb 0 0 0 0 2 16c 0 –

Independent 0 0 0 0 0 0 1d –

Vacant 0 0 1 0 1 0 0 –

a Rhodesian Front, then Republican Front, then Conservative Alliance of Zimbabwe. b Zimbabwe Unity Movement. c Estimates range from 15%to 20%. d An independent candidate, Margaret Dongo, successfully won a by-election in late 1995, after appealing.

Source: Press reports.

Zimbabwe: Political forces 7


International relations and defence

Relations with SouthAfrica

As the leader of the most important country within the Southern AfricanDevelopment Co-ordination Conference (SADCC) in the 1980s, Mr Mugabewas very vocal in advocating international sanctions against South Africa.However, Zimbabwe’s strong dependence on its southern neighbour preventedit from ever imposing sanctions. Relations with South Africa improved after itsmajority-rule election in 1994 but have been marred by trade disputes, whileMr Mugabe has been increasingly sidelined by the more charismatic NelsonMandela in the renamed Southern African Development Community (SADC).

A non-aligned policy Mr Mugabe was the chairman of the Non-Aligned Movement from 1986 to1989, after the movement’s summit meeting was held in Harare in 1986. Rel-ations with the UK have remained good, but have suffered from Britain’srefusal to support the government’s land redistribution programme. Relationswith the US, which had deteriorated in 1984 as Zimbabwe voiced its oppositionto US foreign policy in southern Africa, improved again after 1989. Zimbabweis an active member of the Organisation of African Unity (OAU) and is asignatory to the Lomé Convention linking African, Caribbean and Pacific(ACP) countries with the EU (see Regional organisations).

The military At independence, with advice from the British army, the Zimbabwe NationalArmy (ZNA) was created by merging some 120,000 troops from the Rhodesianarmy, the Zimbabwe African National Liberation Army (ZANLA) and theZimbabwe People’s Revolutionary Army (ZIPRA). The army has traditionallykept a low profile, but took part in the ruthless suppression of the unrestin Matabeleland in the early 1980s. Between 1985 and 1993 up to 12,000Zimbabwean troops were committed to supporting operations in Mozambique,mainly along the “Beira Corridor”, where they guarded transport routes againstsabotage by the South African-backed Mozambique National Resistance(Renamo). Defence spending in real terms has since been scaled down (seeReference table 1), and the army is suffering from a dire shortage of equipment.However, plans to reduce troop numbers from the current 39,000 to 25,000seem to have been shelved for the time being.

Military forces, 1997

Zimbabwe National Army (ZNA) 35,000

Zimbabwe Air Force 4,000

Total armed forces 39,000

Police forces 21,800

Defence spending (US$ m) 471Source: International Institute for Strategic Studies, The Military Balance 1997/98.

8 Zimbabwe: International relations and defence


The economy

Economic structure

Main economic indicators, 1997

Real GDP growth (%) 3.7

Consumer price inflation (av; %) 18.9

Current-account balance (US$ m) –700

Total external debt (US$ m) 5,133a

Exchange rate (av; Z$:US$) 11.89

a Year-end estimate.

Source: Government estimates.

A diversified economy With its well-developed manufacturing sector, prosperous commercial farmingand varied mineral resources, Zimbabwe has a much more diversified economythan any of its neighbours except South Africa (which is much more depend-ent on mining). Although agriculture generates only about 18% of GDP, one-third of which comes from communal farmers, and mining generates onlyabout 4% of GDP, these sectors nevertheless determine the general health ofthe economy. Manufacturing industry remains important and generates about18% of GDP, even though its relative importance has declined. A marked risesince independence in the services sector, which accounted for 60% of GDP in1996, is largely the result of increased spending on education and health. Invalue terms tobacco and gold, followed by tourism receipts, dominate bothoutput and export earnings.

Comparative economic indicators, 1997

SouthZimbabwe Namibia Botswana Africa UK US

GDP (US$ bn) 8.6 3.3 4.9 129.2 1,287.7 8,081.0

GDP per head (US$) 714 2,060 3,250 3,370 21,839 30,147

Consumer price inflation (av; %) 18.9 8.9 8.9 8.6 2.8 2.5

Current-account balance (US$ m) –700 90 578 –1,912 –10a –160a

Merchandise exports fob (US$ bn) 2.5 1.4 2.7 29.9 277.8 674.6

Merchandise imports fob (US$ bn) 2.7 1.4 1.9 27.6 298.8 872.6

Note. Figures may differ from official figures.a US$ bn.

Source: EIU.

The informal sector Revisions to GDP were made official by the Central Statistical Office (CSO) in1997, and GDP figures now include the informal sector. The informal sectorwas estimated to have contributed Z$5.17bn (US$597 bn) to GDP at currentprices in 1995, boosting total GDP at factor cost by 9.5% for that year, with themost important contribution in the services sector. The impression that manyof the previously published statistics were of low reliability was confirmed bythe substantial changes that have been made in the revisions, not all of whichcan be accounted for by the inclusion of the informal sector.

Zimbabwe: Economic structure 9


Contribution of the informal sector to gross domestic product, 1995(Z$ m; current prices)

Informal sector Total industry %

Agriculture 1,000 9,636 10.4

Manufacturing 990 11,931 8.3

Construction 120 1,550 7.7

Transport & communications 90 3,636 2.5

Distribution, hotels & restaurants 2,880 12,122 23.8

Real estate 40 1,429 2.8

Other services 50 2,209 2.3

Total 5,170 59,449a 8.7

a GDP at factor cost.

Source: Central Statistical Office.

Economic policy

Main institutions in economic policy

Commercial Farmers’ Union (CFU): powerful organisation of some 4,000(mainly white) farmers Confederation of Zimbabwe Industries (CZI): representing mostmedium-sized and large producersMinistry of finance: manages budgetary policy but remains ineffectualNational Consultative Forum: established in January 1998 to promote dialoguebetween the government and the private sectorReserve Bank of Zimbabwe: manages monetary policy but suffers from frequentgovernment interferenceZimbabwe National Chambers of Commerce (ZNCC): representingprivate-sector companiesZimbabwe Congress of Trade Unions (ZCTU): representing most trade unions,originally established by ZANU-PF but now critical of the governmentZimbabwe Investment Centre (ZIC): established in 1989 to help investorsbypass bureaucracy

Economic austerity inthe 1980s

To keep the economy afloat after abandoning an IMF programme in 1984, thegovernment reverted to the tight and comprehensive state controls char-acteristic of the regime of Ian Smith under sanctions. Strict controls on foreign-exchange allocations produced trade surpluses and a reduction of thedebt-service ratio. The Reserve Bank of Zimbabwe (RBZ, the central bank),prevented serious overvaluation of the currency by letting it float downwards.Zimbabwe avoided the need to reschedule its foreign debt, but at the cost of anextreme shortage of imported consumer goods and industrial inputs. At thesame time, domestic subsidies on essential goods continued—although atdeclining levels—while high defence, health and education spending contrib-uted to government budget deficits of around 10% of GDP. As GDP growth inthe 1980s averaged 4% and essential industrial and agricultural importsremained available, the mainly white business community broadly acquiescedin government policy.

10 Zimbabwe: Economic policy


Main economic policy changes since 1995

1995: Full current-account convertibility. IMF suspends programme as governmentspending overshoots target. Drought necessitates grain imports.1996: A privatisation programme begins, but failure to control the budget deficitprecludes offer of a new IMF programme. 1997: Concessions to war veterans raise budget spending again. The governmentannounces plans to expropriate almost half of white-owned land.1998: Attempts to raise prices following the depreciation of the currency and toraise revenue to fund war veterans’ payments run into severe opposition. Thegovernment announces the Zimbabwe programme for economic and socialtransformation (Zimprest), initially tabled for 1996, which outlines macroeconomicreforms through to 2000. The IMF releases US$176m in balance-of-paymentssupport in the middle of the year, but doubts remain whether the government willbe able to meet programme targets.

The ESAP is introduced inthe 1990s

The government ultimately lost the support of the business communitybecause its policy constrained access to foreign exchange. In 1990 the govern-ment introduced its five-year economic structural adjustment programme(ESAP). The first phase of the ESAP began with the introduction of a tradeliberalisation programme, aimed at replacing most of the quantitative importcontrols with tariffs by 1995. At a series of Paris Club meetings donors pledgedtheir support for the programme, but the first funds did not become availableuntil early 1992—too late to prevent a balance-of-payments crisis in September1991 and a 40% devaluation of the currency. Subsequently, Zimbabwe wasforced to agree to more stringent conditions and a more rapid timetable for theESAP. The drought in 1992 dealt a severe blow to the government’s plans foreconomic reform, and the ESAP was effectively delayed as the governmentconcentrated on avoiding a famine. Reforms resumed when the rains returnedin 1992-93, and the currency became fully convertible by early 1995. Anotherdrought that year led to a contraction of the economy, and the IMF suspendedits support because of the rising budget deficit. Confidence returned in 1996-97when GDP growth resumed.

Economic policy goesastray

However, in mid-1997 economic policy went astray as the government soughtto respond to domestic pressures. Confidence had already been dealt a blowwhen the 1997/98 budget projected a deficit equivalent to 8.9% of GDP. It tooka further knock when the government announced in August 1997 that it woulddisburse about Z$3.5bn in payments to war veterans and was wholly under-mined by the subsequent designation of 1,500 white-owned commercial farmsfor expropriation. In order to restore confidence in the economy, the govern-ment agreed on a revised budget in January 1998 which aimed to keep thebudget deficit within 7.5% of GDP. In April the government also released detailsof the long-awaited Zimbabwe programme for economic and social transforma-tion (Zimprest), initially tabled for 1996, which outlines policy objectives until2000. Although Zimprest’s objectives are widely considered to be vague andunattainable, the IMF released balance-of-payments support in June. (Full dataon central government finances, budget-account expenditure and money sup-ply are given in Reference tables 2, 3 and 4.)

Zimbabwe: Economic policy 11


Zimprest

Zimprest calls for real annual GDP growth of 6% until 2000, helped by continuousgrowth in exports. To achieve this, savings and investment are to reach at least 23%of GDP. In addition, a total of 44,000 new jobs are to be created each year. Thegovernment will also aim to reduce the budget deficit to under 5% of GDP andlower annual inflation to single-digit figures. However, the programme does notspecify how these targets are to be attained, and it seems vastly over-optimistic,given that Zimbabwe only achieved annual average GDP growth of 1.7% in1991-95, that the budget deficit is likely to increase to above 10% of GDP in 1998and that year-on-year inflation remains above 25%.

Summary of government financesa

(Z$ m; fiscal years Jul 1996/Jun 1997 and Jul 1997/Dec 1998)

1996/97 1997/98(12 months) (18 months)

Outturn Budget

Total revenue 27,290 52,542Taxes & fees 26,745 50,723Foreign aid grants 544 1,819

Total expenditure 32,366 63,187Recurrent 28,245 56,242Capital 2,089 5,532Net lendingb 2,032 1,413

FinancingBalance –5,076 –10,645External budgetary support –91 318Domestic financing –5,168 –10,327

a Includes revisions agreed with donors in January 1998. b Includes government investments.

Sources: Government of Zimbabwe, Budget Estimates for the Year Ending December 31st 1998; EIU.

Economic performance

Growth The post-independence period began on a high note, with spectacular eco-nomic growth of some 21% over 1980-82, largely reflecting the return of peace,exceptionally good rains and high domestic demand stimulated by large wageincreases. Since then the economy has followed an erratic growth path, steeredprimarily by the fortunes of the agricultural sector. Droughts in 1982-84, 1987,1992 and 1995 led to economic contraction, offset in part by rapid growth innon-drought years. Zimbabwe experienced an average growth rate of 4% in the1980s—an apparently modest result which is, in fact, remarkable, particularlyin the context of South Africa’s destabilisation efforts—and amounting to threetimes the African average. In the 1990s the economy has grown by an averageof less than 1.5% per year. Because of high population growth, Zimbabwe’sliving standards, which remained static in the 1980s, have actually declined inthe 1990s. Income per head in 1993 (Z$405 at 1980 prices) was lower than in1980, when it was Z$438, and well below the peak of Z$556 in 1974. (Fordetailed data on GDP, see Reference tables 6, 7 and 8.).

12 Zimbabwe: Economic performance


Gross domestic producta

(% real change; market prices)

Annual average1997a 1993-97

GDP 3.7 3.6

a Government estimates.

Sources: IMF, International Financial Statistics.

Employment In the late 1980s about 40,000 jobs were being created annually, sufficient toaccommodate less than 20% of school leavers. Total employment reached apeak of 1.26m in 1994, a 26% rise on 1980 figures, but has dropped since. Theseverity of the job shortage is also evident from the drop in the percentage of thetotal population formally employed: it dropped from 18% in 1965 to 11% in1996. There have been major sectoral shifts in employment since independence,with a particularly steep rise in services and education, and health and financealso increasing markedly, while the number of people working in manufac-turing has declined. Agriculture is the largest employer, accounting for 27% ofthe workforce in 1995, while manufacturing accounted for 15% of total employ-ment. (For more data on employment and earnings, see Reference table 9.)

Wages The minimum wage was raised several times after independence, and realwages rose significantly in 1980-82, but have fallen since. In 1995 average realearnings were 21% lower than in 1991. Although attempts were made in the1980s to introduce wage controls, these were widely circumvented by privateindustry. Free collective bargaining now appears to be the norm, but tightregulation of the right to strike has provoked workers to engage in “wildcat”actions. Since 1997 the Zimbabwe Congress of Trade Unions (ZCTU) hasgained prominence, however, organising successful strikes against new taxesand levies while pushing for an increase in the minimum salary from Z$1,500(US$83) to Z$2,000 per month.

Inflation Extensive price control, dating from the time of the Unilateral Declaration ofIndependence (UDI), has been abandoned, and subsidies have been progres-sively reduced since 1983. The government deregulated the price of maize,milk, beef and wheat in 1993-94, causing bread riots in Harare. In 1993 a newcomposite inflation index for rural and urban households—both higher- andlower-income—was introduced using 1990 as the base year. This lowered offi-cial average inflation rates, but inflation has nevertheless remained high, aver-aging 22.5% per year since 1993, and has increased markedly since thebeginning of 1998.

Inflation(% real change; period average)

Annual average1997 1993-97

Consumer prices 18.9 22.5Sources: IMF, International Financial Statistics; government estimates.

Zimbabwe: Economic performance 13


Regional trends

The Bulawayo area in southern Matabeleland remains the heavy industrialarea, servicing several large mines and the cattle-ranching industry. Light ind-ustry is concentrated primarily around Harare, which is central to the higherrainfall areas of northern and eastern Mashonaland. Kadoma, Kwekwe andGweru, which are market centres and have significant industry, are on therailway line between Bulawayo and Harare. The other two main centres areMutare, close to the eastern border and on the railway line between Harare andthe port of Beira in Mozambique, and Masvingo in the south. Mutare is thecentre of important specialised agriculture, in particular coffee and tea.

Resources

Population

Population indicators, 1998

Population (mid-year; m) 11.91

Population growth rate (%) 2.0

Fertility rate (children per woman) 4.68

Life expectancy (years) 48.5

Urbanisation (%; 1995) 32.0

Projected population in 2008 (m) 13.08a

a EIU estimate.

Source: UN Population Division.

The Shona are dominant The majority of Zimbabweans are Shona, a broad ethno-linguistic group con-centrated mainly in the north and east with several regional subgroupings, themost important of which are Manyika, Karanga and Zezuru. The Shona out-number the Ndebele, who live mainly in the south and west, by about four toone. The number of whites has dropped from a peak of about 275,000 in themid-1970s to an estimated 75,000—barely more than 0.5% of the population.The most widely spoken language is Shona and its dialects, but English, whichis universally spoken in towns, is the official language. English, Shona andNdebele are each taught in all schools.

A slowing populationgrowth

Based on United Nations figures, Zimbabwe’s population is estimated at 11.9min mid-1998, slightly less than the official figure of 12.7m. The last populationcensus, conducted in 1992, indicated a population of 10.4m, up from the 7.6mof the previous census of 1982. After exceeding 3% in the late 1980s, thepopulation growth rate has fallen to around 2% in 1998 as a result of birthcontrol and, increasingly, also of AIDS (see below). The population density isabout 30 persons per sq km. The urban population was estimated at 3.9m inmid-1998, or 33% of the total, compared with 23% in 1982, and has beengrowing at over 5% per year. Harare’s population has grown at more than 6%per year: if the Chitungwiza township is included, it now probably exceeds 2m.

14 Zimbabwe: Regional trends


The threat of AIDS AIDS has become a major threat to Zimbabwe, which is one of the worstaffected countries in Africa. According to the government, about 1.5m peopleare HIV-positive, and 350,000 of these have already developed AIDS. Therewere 130,000 new cases of HIV infection in 1996, one of the highest rates in theworld. Over 200,000 Zimbabweans have died of AIDS since the beginning ofthe epidemic in the 1980s, and over 700 people are dying of AIDS every week.Most demographic analyses agree that the population growth rate will fall fromthe present 2% a year to less than 1% by 2000 and may even become negativeby 2005, as Zimbabweans with the disease begin to die in ever-increasingnumbers. In addition to the human tragedy, the impact on the economy isparticularly pronounced since the disease has a disproportionate effect on theeconomically most active age groups, so hitting productivity and increasingthe dependency ratio. After years of neglect, the government is planning toestablish an AIDS co-ordination mechanism which would make the fightagainst the disease a national priority.

Education

Education has expanded Spending on education has increased since independence, from Z$98m(US$144m) in 1979 to Z$14bn (US$779m at the current exchange rate) in1997/98. Primary schooling is now universal and about 2.5m children wereenrolled in 1994, up from 1.2m in 1980. About 700,000 children, equivalent tonearly half the 12-16 age group, were enrolled in secondary schools in 1994.The number of students at higher educational institutions, excluding universi-ties, has also expanded, to about 30,000 in 1994. There is a developed appren-ticeship system and a vocational training sector, both funded by a 1% payrolltax on company wage bills (see also Reference table 11).

Universities There are about 11,000-12,000 university students, the bulk of whom are at theUniversity of Zimbabwe (UZ) in Harare, which has a full range of faculties. In1992 the National University of Science and Technology opened in Bulawayo.Africa University, built largely with religious funding from the US, opened nearMutare in 1993. In 1991 an unpopular bill brought the university system undertighter government control, prompting a number of resignations, while otherteachers have been tempted away by higher salaries in South Africa andBotswana. There were student protests in 1996-97 after the government raisedstudents’ contributions to 50% of fees, and again in 1998, when students dem-onstrated in Harare, demanding Mr Mugabe’s resignation. As a result, UZ wastemporarily closed down by the government in June 1998.

Health

A collapsing healthcaresystem

The provision of health services has greatly improved since independence butremains skewed towards the urban areas. The health service is free for all whoearn less than Z$400 (US$22) per month, although a doubling of this thresholdto Z$800 is being considered. The private sector is supported primarily byprivate medical insurance associations. Expenditure on health rose fromZ$60m in 1979 to Z$3.8bn in 1997/98, while employment in the sector rose by

Zimbabwe: Education 15


70% between 1980 and 1995 to about 26,000. By the end of the 1980sZimbabwe’s healthcare system was held up as a model by the World Bank, butthe introduction of the five-year economic structural adjustment programme(ESAP) in 1991 had negative repercussions on the sector, while the intro-duction of additional fees deterred poorer people from seeking medical advice.AIDS has had an even more serious impact as the state has become increasinglyburdened with healthcare costs. Four-fifths of scarce hospital beds are report-edly occupied by AIDS patients. Life expectancy, which peaked at 61 years in1990, is now down to only 49 years and falling.

Natural resources and the environment

Zimbabwe’s climate is subtropical. The rainy season of the summer months(November-March) is followed by a dry period, including a short winter inJune-July, when slight frosts occur in some areas. Most arable land, located inthe north and east, receives average annual rainfall of 500-1,500 mm per year.The lower-lying land in the south and west, the lowveld, has more variablerainfall and is primarily suitable for grazing. Mineral deposits are varied, butwith the exception of coal, platinum and chrome pockets of minerals tend tobe small. Huge deposits of coal, substantial natural and plantation woodlandand abundant hydroelectric potential are all major contributors to energy sup-ply. There are a large number of tourist attractions, including the world-famousVictoria Falls, Lake Kariba, 26 national parks and game reserves, the largestbeing Hwange, the Eastern Highlands and the historical site of Great Zimbabwenear Masvingo, from which the country takes its name.

Economic infrastructure

Transport and communications

A landlocked country Zimbabwe is a landlocked country with a well-developed road network thatincludes 15,000 km of tarred roads. Closest access to the sea lies eastwardsthrough Mozambique at the port of Beira. From the mid-1960s until the mid-1980s successive border closures, first by Zambia and then by Mozambique,followed by South Africa’s destabilisation war in Mozambique, forced Zimbabweto route nearly all of its overseas traffic through distant South African ports.With the return of peace, Beira has been regaining its former importance.

Railways Zimbabwe has a direct rail link with Zambia via Victoria Falls, which in theorycontinues to the Tanzanian port of Dar es Salaam; two links with Mozambiqueto the ports of Beira and Maputo; and two links with South Africa, one throughBotswana, the other via Beitbridge. Another link is planned between Beitbridgeand Bulawayo, via West Nicholson. The National Railways of Zimbabwe (NRZ)has been reformed with the aid of the World Bank. It is now required to operatecommercially, but there are no plans for privatisation. (For data on railwaysfinance and traffic, see Reference table 12.)

16 Zimbabwe: Natural resources and the environment


Airlines Two state-controlled airlines, Air Zimbabwe (AZ) and a freight-carrier, Affretair,are experiencing financial troubles brought about by poor management.Although AZ operates on a commercial basis, it incurred an operational loss ofZ$150m (US$12.6m) in 1997, while Affretair has only leased planes. AZ’s poorrecord of reliability has allowed a new company, Zimbabwe Express Airlines, togain a substantial share of the market. A new terminal is to be built at Harareairport, but the project has been stalled since 1995.

Telecommunications The Posts and Telecommunications Corporation (PTC) has invested heavily inrecent years in the digitalisation of the network, using fibre-optic technology.The waiting list for connections has not gone down, however, remaining above100,000. In 1994 PTC lost its monopoly rights and has been facing competitionfrom cellular phone operators. In December 1997, after over four years of legalbattles, a local company, Econet, finally won the right to establish the secondcellular phone network. Econet expects to increase its capacity to 60,000 sub-scribers in the whole country by the end of 1998.

Media Zimbabwe’s press is relatively free but is dominated by Zimbabwe Papers, inwhich the state has a controlling interest. The group owns the daily Herald, theBulawayo Chronicle and the Sunday Mail. Independent newspapers include theweekly Financial Gazette and the Zimbabwe Independent, which is highly criticalof the government. A number of monthlies, including Moto, Horizon andParade, are estimated to have readerships approaching 1m each. The radioand television stations are run by the state-owned Zimbabwe BroadcastingCorporation (ZBC). Since the riots of early 1998, which were sympatheticallycovered by the state-owned media, the government has demoted a number ofpeople, while a mooted public order and security bill may curtail the rights ofthe independent press.

Energy provision

Energy balance, 1997(m imperial tonnes oil equivalent)

Elec- Oil Gas Coal tricity Other Total

Primary production 0.00 0.00 3.40 0.54a 1.70 5.64

Imports 1.45 0.00 0.03 1.02a 0.00 2.50

Exports 0.00 0.00 0.04 0.00 0.00 0.04

Primary supply 1.45 0.00 3.39 1.56a 1.70 8.10

Net transformationb 0.00 0.00 –1.72 –0.71 0.00 –2.43

Final consumption 1.45 0.00 1.67 0.85c 1.70 5.67

a Expressed as input equivalents on an assumed generating efficiency of 33%. b Transformationinput and output, plus energy industry fuel and losses. c Output basis.

Source: Energy Data Associates.

Zimbabwe: Energy provision 17


Power The sole generating and distributing authority is the Zimbabwe ElectricitySupply Authority (ZESA). The search for national energy self-sufficiency in theearly 1980s led to an emphasis on coal and thermoelectric projects, while theKariba dam—built during the federation years—provided abundant electricityfor many years. The commissioning of the second stage of the Hwange thermalpower station in 1987 raised capacity to 920 mw. However, cheaper importsfrom neighbouring countries now prevail. Since 1997 Zimbabwe has been con-nected to the wider southern African grid via a link with South Africa, while alink to the Cahora Bassa dam in Mozambique has been completed. A contro-versial deal brokered with a Malaysian company, YTL International, in 1996was meant to expand Hwange’s capacity to 1,580 mw, but the deal has sincerun into difficulties. With the support of the World Bank, ZESA has embarkedupon an expansion programme which will alleviate recurrent power shortages.Extensions of supply to rural areas are also planned.

Oil and gas All oil and gas is imported. A pipeline from Beira in Mozambique to Mutare wasopened before the Unilateral Declaration of Independence in 1965, but becameoperative only in 1982. It was extended to Harare in 1993. Ethanol, producedsince 1980 from sugarcane, is blended with petrol in a 15% proportion fordomestic sale. (See Reference table 14 for national energy statistics.)

Financial services

The Reserve Bank The Reserve Bank of Zimbabwe (RBZ, the central bank), acts as banker to thegovernment, issues currency and government loans, controls foreign reserves,acts as lender of last resort to commercial banks, and manages gold output. TheRBZ has pursued the defence of a tight monetary policy in order to maintainexchange-rate and price stability as its main objective. It has, however, beenconstrained by low foreign-exchange reserves, further depleted by initialattempts to bolster the currency in late 1997, while it has been subjected topolitical pressure to finance the budget deficit monetarily.

The RBZ also acts as the supervisory body for the banking sector, but it lacks thenecessary legislative framework and statutory power to monitor banks ade-quately, as the Ministry of Finance is responsible for issuing banking licences.

A poorly supervisedfinancial sector

The main commercial banks are Barclays Bank of Zimbabwe, Standard CharteredBank, Standard Bank (Stanbic), the Commercial Bank of Zimbabwe, which hasbeen privatised, and Zimbank, in which the government has a majority stake.In addition, the liberalisation of the financial sector since 1991 has lead to aproliferation of local banks, often encouraged by the government, which hassought to promote the indigenisation of the financial sector. In the absence ofmonitoring powers, the RBZ has been unable to enforce standards effectively,while the regulation of the banking sector has become increasingly dominatedby political concerns.

The economic downturn in late 1997 has had a serious impact on a number ofthese new banks, which have benefited from quick access to lucrative statecontracts, despite their low liquidity rates. In April 1998 the governmentrevoked the licence of United Merchant Bank (UMB) after it emerged that the

18 Zimbabwe: Financial services


institution was on the verge of bankruptcy, and ordered the RBZ to carry out anaudit. UMB had issued fraudulent notes worth Z$800m (US$44m at the currentexchange rate) and other financial institutions were exposed to UMB to thetune of Z$2.1bn. The government has apparently ordered the RBZ to honourall fraudulent notes, for fear that other financial institutions may also go bank-rupt. The ripple effects of the banking crisis are nevertheless likely to be serious.

The Zimbabwe StockExchange

There are 66 companies listed on the Zimbabwe Stock Exchange (ZSE), which isdominated by the half-dozen listed mining companies. In 1993 the govern-ment allowed foreign investment through the ZSE, and by October 1997 thenet foreign inflow had exceeded US$183m. However, the worsening economicsituation in late 1997 had dramatic consequences on the performance of theZSE, which had survived the brunt of the Asian crisis nearly unscathed. Theindustrial index, which reached an all-time high of 12,082 in August 1997, fellto 7,200 in December. Although the index regained strength in early 1998, thefinancial crisis again wiped out most gains by mid-1998. Overall, market cap-italisation of the 66 companies listed on the ZSE fell from Z$63.4bn toZ$48.5bn between March 1997 and March 1998, a decline of nearly 25%. In USdollar terms, the drop is even more pronounced, as capitalisation fell by 50%,from US$6bn to US$3bn. (For stockmarket indices and turnover, see Referencetable 16.)

Other services

Retail The retail sector is dominated by domestic and South African chains. These arevertically integrated with domestic suppliers of processed food, clothing, furni-ture and light consumer goods, as a result of import-substitution policies. Themain South African chains in Zimbabwe are Pick’n Pay and OK Bazaars (food)and Edgars and Truworths (clothing), while domestically owned chains includeTM and Bon Marché in food and Meikles and Tedco in clothing and furniture.(For statistics on retail sales, see Reference table 17.)

Tourism Zimbabwe has a growing tourism industry, and hunting safaris in particularhave expanded in recent years. The government favours up-market tourism,especially ecotourism and safari holidays. There are a number of world-classhotels, including the historic Victoria Falls Hotel, founded in 1904 and nowlisted as one of the top 50 hotels in the world. It was refurbished in 1996 andexpects to contend for the “Best Hotel in Africa” award recently given to theMeikles Hotel in Harare. The total number of visitors has grown at an annualrate of nearly 20% since 1990, when it was about 635,000, to nearly 1.8m in1996. Most tourists come from neighbouring countries, mainly South Africaand Zambia, but the proportion of overseas visitors has been growing strongly.Tourism is forecast to generate revenue of Z$2.5bn (US$139m at the currentexchange rate) in 1998, making it the third-largest foreign-exchange earnerafter tobacco and gold. (For data on visitor numbers, see Reference table 18.)

Zimbabwe: Other services 19


Production

Manufacturing

Manufacturing production(by volume)


% real change 9.2 –4.0

a January-July.

Source: Central Statistical Office, Quarterly Digest of Statistics.

A diversified sector Partly as a result of import-substitution policies during the years following theunilateral declaration of independence (UDI), which boosted the number oflocally manufactured products, Zimbabwe has one of the largest, most diversi-fied and integrated manufacturing sectors in sub-Saharan Africa. The largestfirms have turnovers of more than US$100m, and many are subsidiaries ofBritish or South African companies. However, the removal of protective meas-ures under the government’s 1990 economic structural adjustment programme(ESAP) have caused manufacturing output to contract and its share of GDPdeclined to 18% of GDP in 1996, from around one-quarter in the 1970s. About40% of Zimbabwe’s exports are classified as manufactured products (For dataon manufacturing production, see Reference tables 19 and 20.)

Main industries Zimbabwe Steel Corporation (Zisco) is the only integrated sub-Saharan steelproducer outside South Africa. Its plant at Kwekwe has an annual capacity ofnearly 1m tonnes of steel, although output has rarely exceeded 700,000 tonnes.A 1996 agreement with a Chinese company to reline the main blast furnace hasrun into difficulties. Other major industries include Zimbabwe Alloys, whichproduces ferrochrome for export; a number of heavy engineering companiesworking for the mining industry and railways; Dunlop Zimbabwe, which makestyres and tubes; car and truck assembly plants; a large pulp and paper firm; andseveral companies in plastics. The largest single company is Delta Corporation,which dominates beer and soft drinks production but also has interests in retail-ing, furniture and hotels. David Whitehead (a Lonrho company) dominatestextiles, and Bata the shoe industry. The largest company under local privatecontrol is TA Holdings, which is involved in industry and services.

Limited state intervention Although the state has rarely played a dominant role, the government’s centralstrategy until 1990 was to increase state participation in the manufacturing sector.This was achieved directly through the purchase of existing private corporations,such as CAPS, the main pharmaceuticals manufacturer, and Zimbank, as well asindirectly through the Industrial Development Corporation, which acquiredequity stakes in new joint ventures. Since 1990 there has been a shift in govern-ment policy away from state participation, but the government has activelyencouraged the indigenisation of companies. The economic downturn has forcedthe government to accelerate the sale of state-owned shares, although a compre-hensive privatisation programme has still to be implemented.

20 Zimbabwe: Manufacturing


Mining and semi-processing

Gold is paramount About 30 different minerals are commercially significant in Zimbabwe, butgold is the most important, accounting for about half of all mining output byvalue. Gold production has expanded almost every year since independence,and at 780,000 oz in 1997 was almost double the output of 1980. A number ofnew mines have been opened in recent years, notably by Cluff Resources,which was taken over by Ashanti Goldfields in 1996, although Lonrho, RioTinto-Zimbabwe (RTZ) and Falcon have remained major participants. However,the sector has been hit by the fall in world gold prices since 1997, which hasbeen threatening the viability of smaller mines. In 1997 gold exports earned anestimated US$250m, about 10% of total merchandise exports. All gold exportsare handled by the Reserve Bank of Zimbabwe (RBZ, the central bank).

Other minerals Nickel, coal, asbestos and chrome ore account for a further one-third of miningoutput by value. Although chrome ore accounted for only 3% of output value,it is the key input into the manufacture of ferrochrome and other ferro-alloys.Almost all production is exported, and only coal, iron ore and phosphaterock are mined primarily for local use. In 1997 Delta Gold and Broken HillProprietary (BHP) from Australia began production from the Hartley platinummine and production is expected to reach 180,000 tonnes of ore by December1998. Minerals and alloys provide more than one-quarter of export earnings.(For statistics on minerals, see Reference tables 21 and 22.)

Mineral deposits are dispersed throughout the country, although the GreatDyke, which runs hundreds of kilometres from south-west to north-east, con-tains extensive mineral deposits. The main mining companies are AngloAmerican Corporation of South Africa (nickel and chrome), Rio TintoZimbabwe (nickel and gold), Turner & Newall (asbestos), Lonrho (gold andcopper) and Ashanti Goldfields (gold). After an unsuccessful attempt to controlthe mining industry, the state is now withdrawing. In an effort to controltransfer pricing, all minerals except gold had to be marketed through theMinerals Marketing Corporation, but the organisation has been ineffective andmay be disbanded.

Mineral production(by volume)


% real change –4.7 2.5

a January-July.

Source: CSO, Quarterly Digest of Statistics.

Agriculture

The land question The land question has always been a central and controversial issue inZimbabwe. Under the Land Tenure Act of 1969, 50% of the country was re-served for white farmers, including most of the arable land in the north andeast. As a result of this policy, most of the country’s communal farmers live inthe lower-lying lands in the south and west, which have less rainfall and are

Zimbabwe: Mining and semi-processing 21


primarily suitable for grazing. Although the act was repealed in 1979, this hasmade little difference to the distribution of land: about 30% is still owned byabout 4,000 white commercial farmers. Acute land pressure in the communalareas has made land redistribution a pressing issue.

Structure of land ownership, 1995

No. Average Share of output (approx) size (ha)a (%)

Commercial farms (mainly white-owned) 4,700 3,000 80

Communal farms 800,000 20 18b

Resettlement areas 62,000 50 2

a Average sizes vary widely; although 10 ha constitutes a viable holding in arable areas, 100 ha isinadequate in drier regions. b The communal share falls sharply in drought years.

Sources: Commercial Farmers’ Union; Financial Gazette.

Despite post-independence plans to resettle 162,000 black families withinthree years, by 1995 only 62,000 black families had been resettled. In 1992 aLand Acquisition Act was adopted to provide for the acquisition of up to halfof all white-owned land for redistribution, but the farmers affected appealedand the programme was effectively halted in 1995. In November 1997, facedwith mounting domestic difficulties, the government again designated about

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22 Zimbabwe: Agriculture


1,500 farms—covering about 40% of white-owned land—to be expropriatedwithout compensation. The decision plunged the country into an economiccrisis, and the redistribution programme has since been scaled down signif-icantly, in part in response to pressure from donors that full compensation bepaid for expropriated land. A more modest redistribution programme will startwith farms where the government’s designation has not been contested, whilea donor conference is to be held to discuss the issue. As yet, however, the landquestion remains far from solved.

Tobacco remainsimportant

Although tobacco has never regained the dominant position it held in thepre-UDI economy, it remains the country’s most valuable crop and leadingexport, equivalent to about one-third of merchandise exports. Tobacco is sold atauction, and flue-cured tobacco (over 95% of the total) normally commands apremium price on world markets, making Zimbabwe one of the world’s topthree exporters. Since 1990 output of flue-cured tobacco has remained aboveUDI levels, with sales peaking at 220,000 tonnes in 1995/94. The rise is mainlythe result of intensified cultivation, although tobacco areas comprise less than1% of total commercial farmland. After a good 1996/97 harvesting year, tobaccoauctions for the 1997/98 harvest year opened in April to disappointingly lowprices. As a result, tobacco revenue is expected to reach only US$300m-400m,compared with US$608m in 1996/97.

Production Zimbabwe is generally food self-sufficient, usually exporting significant quan-tities of meat and maize in addition to cash crops such as tobacco, cotton andsugar. The main harvest period for most crops is from April to September. Noimports were necessary until the 1992 drought, when Zimbabwe lost 80% of itsmaize crop. Many commercial farms have small areas under irrigation, as dolarge estates on which citrus fruit, sugar and winter wheat are grown. Furtherirrigation could restore wheat self-sufficiency and provide some output stabil-ity output for the communal areas. In higher rainfall areas maize yields of morethan 10 tonnes/ha are achieved—among the best in the world; yields in drierareas barely reach one-tenth of this level. The horticultural industry has re-cently become one of the most dynamic exporters, and Zimbabwe is the thirdlargest exporter of roses in the world. The national herd of cattle was estimatedat around 6m in 1990, of which about 4m were in communal areas, althoughabout 1.7m of these may have died during the 1992 drought.

Production of main cropsa

(’000 imperial tonnes unless otherwise indicated; marketed outputb)

1996/97 1995/96

Maize 932 66

Sugar 336c n/a

Cotton 297 84

Tobacco 208 209

Cattle (’000 head) 237c n/a

a The crop year is from April to March. b Retention for own use adds about 50% in the case of maizeand uncertain amounts for milk and meat. c Calendar year.

Sources: CSO, Quarterly Digest of Statistics; industry sources for sugar.

Zimbabwe: Agriculture 23


The role of marketingboards

The main agricultural products—grain, coffee, dairy products, cotton, beef andpork—are now sold both through marketing boards and directly to privatebuyers. Horticultural products are also sold privately. Under the ESAP, market-ing boards and commissions are being managed commercially, and some havehad their monopolies removed and been converted into government-owned orprivate companies. However, the Grain Marketing Board (GMB) is likely toremain a parastatal because of its role in food security. In 1993 an agriculturalmarketing exchange, the Zimbabwe Agricultural Commodity Exchange(Zimace), began operations and is now a major participant in the market. TheMinistry of Lands and Agriculture, however, retains control of external trade inkey agricultural products. (For data on crop and livestock sales to marketingauthorities, see Reference tables 23 and 24.)

Construction

A weak constructionindustry

Despite continued office building activity in Harare, the construction industryhas been depressed since the boom of the early 1970s, and its share of GDP fellfrom almost 5% at that time to about 3% in 1996, although employment roseby almost half to about 80,000. There are some fairly large local contractors,including International Holdings, Gulliver Consolidated and John Sisk & Son.The two major cement producers are Circle Cement and Portland Holdings.A major constraint on the development of the industry remains the marginali-sation of black contractors by established white-owned companies, whichmonopolise 90% of construction work. (For data on construction statistics, seeReference table 25.)

Water supply In 1989 a 25-year national water resource development programme involving136 new dams was started. Sites have also been identified for 19 additionalmajor dams, to be built before the end of the century. Ten urban dams areplanned and are expected to be domestically funded and built.

The external sector

Merchandise trade

Trade is liberalised The foreign-exchange allocation system introduced following the unilateraldeclaration of independence (UDI) in 1965 allowed the colonial regime tocontrol the growth of imports in order to achieve trade surpluses. The systempersisted almost unchanged until 1990, when the relaxation of controls led toa sharp swing of the trade balance into deficit. All trade is now liberalised.Import and export licences were declared redundant in 1994. A rationalisedtariff structure, introduced in 1997, increased tariffs on many consumer goodsbut lowered tariffs on other goods. Overall, in US dollar terms, exports rose byan annual average of nearly 6% from 1990 to 1996, whereas imports rose at anannual average rate of 11%.

24 Zimbabwe: Construction


Foreign trade, 1996

US$ m % of total

Total exports fob 2,440 100.0 of which: tobacco 712 29.1 gold 300 12.3 food 331 13.6 ferro-alloys 170 7.0

Total imports fob –2,833 100.0 of which: machinery & transport equipment 1,097 38.7 manufactured goods 456 16.1 chemicals 379 13.4 fuels & electricity 294 10.4

Trade balance –392 –Source: CSO, Quarterly Digest of Statistics.

Merchandise exports come chiefly from each of the three main productivesectors: agriculture (particularly tobacco, sugar, cotton and maize); mining(especially gold and nickel); and manufacturing (ferro-alloys, steel andclothing). Imports are primarily of machinery and transport equipment, manu-factured goods, chemicals and fuels. (For fuller data on foreign trade by valueand volume, see Reference tables 26 and 27.)

Main trading partners, 1996

% of % ofExportsa to: US$ m total Importsb from: US$ m total

UK 213 10.1 South Africa 1,085 38.3

South Africa 179 9.6 UK 225 7.9

Germany 168 7.9 Japan 145 5.1

US 141 6.7 US 142 5.0

Japan 78 5.1 Germany 137 4.9

a Excluding gold. b Excluding petroleum.


Lomé and GATT Zimbabwe has been a major beneficiary of the Lomé Convention, thanks mostdirectly to its beef and sugar quotas. More important, however, is duty-freeaccess to the European market for Zimbabwe’s manufactured goods and horti-cultural products. There have also been lesser benefits from the generalisedsystem of preferences (GSP) for access to the US market, where Zimbabwe alsohas a sugar quota. Clothing exports have been of increasing importance andhave not been constrained by the GATT multi-fibre arrangement because theirvolume is not yet significant on a global scale. Having suffered from the dump-ing of subsidised production from EU and US agriculture, Zimbabwe should intheory benefit from the current Uruguay Round of the GATT negotiations.

Zimbabwe: Merchandise trade 25


Invisibles and the current account

The current account, 1997(US$ m)

Merchandise exports 2,490

Merchandise imports –2,700

Trade balance –210

Invisibles balance –490

Current-account balance –700Sources: Reserve Bank of Zimbabwe; EIU.

A structural deficit The current account has been in deficit since trade liberalisation started in1991. A big increase in the current-account deficit in September 1991 led to amassive devaluation of the currency in that year, but the situation stabilised insubsequent years. However, according to government figures the recent eco-nomic downturn has resulted in a current-account deficit of US$700m in 1997.This is much higher than expected and equivalent to a massive 9% of GDP,compared with 2% of GDP in 1996.

Controls on dividend and profit payments were relaxed in 1993 and com-pletely freed for new investments. The outflow of blocked funds relating to pastdividends is still controlled, but a timetable for liberalising these by 1999 is inplace. The largest item in private unrequited transfers is pensions, followingthe post-independence outflow of white residents, particularly civil servants.Aid dominates official unrequited transfers. (For balance-of-payments data, seeReference tables 29, 30 and 31.)

Capital flows and foreign debt

Foreign aid Zimbabwe has traditionally received substantial amounts of foreign aid.Pledges worth US$2.8bn were made at a donors’ conference in early 1981,although not all was disbursed, partly because of capacity problems. The WorldBank committed US$1.3bn for projects in Zimbabwe during the 1980s andearly 1990s, including drought relief and structural adjustment loans, while theAfrican Development Bank and the African Development Fund lent US$223mbetween 1980 and the early 1990s. In addition, Zimbabwe has received signif-icant foreign aid from bilateral donors, in particular the UK, Germany, Swedenand the US. Disbursements rose sharply when economic reform began, increas-ing from US$280m in 1989 to US$793m in 1992, but fell back to US$374m in1996 following the suspension of IMF assistance. Foreign aid is set to increaseagain with the resumption of IMF support in May 1998. Donor support for theproposed land redistribution programme remains a major issue. (For full dataon official development assistance, see Reference table 32.)

Debt inflows Zimbabwe has made widespread use of international official and commercialborrowing to help finance the growing budget deficit, mostly through short-and medium-term loans. According to the Reserve Bank of Zimbabwe (RBZ, thecentral bank), total debt stocks amounted to US$5.1bn at the end of 1997 andwere overwhelmingly medium- to long-term. About 17% was short-term and6% private non-guaranteed debt. Net flows on debt were negative from 1985 to

26 Zimbabwe: Invisibles and the current account


1988 but net resource flows (including grants) have been positive, reachingUS$788m in 1992. Since 1992 inflows have fallen, however; long-term debtinflows declined to US$20m in 1996, and overall net resource flows were onlyUS$309m. Net transfers (net resource flows less interest and profit payments)peaked at US$588m in 1992, but, with hardening loan terms, fell to US$48m in1996. (World Bank figures for debt are given in Reference table 33 and for netresource flows in Reference table 34.)

External debt, 1997a

(US$ m unless otherwise indicated)

Long-term debt 4,284b

of which: public 3,299 private 312

Short-term debt 849

Total debt stock 5,133 % of GDP 57.3

a Provisional figures. b Includes debt of parastatals.

Source: Reserve Bank of Zimbabwe, Monthly Bulletin.

Foreign direct investment Official policy encouraged FDI from the early 1980s, but FDI inflows wereundermined by a policy aimed at raising domestic share in capital, as theeconomy was considered to be heavily dominated by foreign capital. FDI wasthus usually negative until the 1990s, mainly because of the active encourage-ment of South African capital divestment, usually at a substantial discount.With the establishment of the Zimbabwe Investment Centre (ZIC) in 1989,encouragement of FDI became more serious. Net flows turned positive in 1991,rising steadily to US$63m in 1996. Portfolio investment was allowed in 1993,and foreign investment on the Zimbabwe Stock Exchange (ZSE) rose toZ$6.5bn (US$547m) in October 1997, the net inflow reaching Z$1.66bn. How-ever, foreign investment has since been affected by the economic downturn, inparticular the near-collapse of the ZSE.

Foreign reserves and the exchange rate

Total reserves rose to US$599m at the end of 1996 but have dropped sharplysince, to a year-end level of US$160m in 1997, after the Reserve Bank ofZimbabwe (RBZ, the central bank) tried to halt the depreciation of the cur-rency. The resumption of IMF balance-of-payment support in May 1998 willbolster reserves. At the end of 1996 commercial banks held foreign assetsvalued at US$300m, and gold holdings were officially valued at US$56m. (Forhistorical figures on foreign reserves, see Reference table 35.)

A floating currency Before 1994 the value of the Zimbabwe dollar was determined by the RBZ on thebasis of a trade-weighted basket of foreign currencies. Higher domestic inflationcommonly caused monthly adjustments of 1-2%, although there were largerdevaluations in 1982, 1991 and 1993. The Zimbabwe dollar was floated in 1994following reforms in 1993 and 1994, which allowed a market in export reten-tions, removed restrictions on holding the currency abroad and on investing inthe ZSE. The RBZ retains reserve powers to intervene in the foreign-exchange

Zimbabwe: Foreign reserves and the exchange rate 27


market to maintain stability. However, it has been constrained by the lack offoreign exchange.

The Zimbabwe dollar has lost considerable ground against the US dollar sinceindependence, falling from Z$0.64:US$1 in 1980 to Z$11.89:US$1 in 1997. InNovember 1997 political instability led to a run against the Zimbabwe dollar,and the currency experienced a dramatic fall of almost 50% against the USdollar before an intervention by the RBZ prompted a recovery. The currencystrengthened somewhat in the first six months of 1998 but depreciated againto around Z$18:US$1 at the end of June, in the face of continued economicdifficulties and low foreign-exchange earnings. (For historical data on the ex-change rate against the US dollar and the SDR, see Reference table 36.)

28 Zimbabwe: Foreign reserves and the exchange rate


Appendices

Regional organisations

Common Market forEastern and Southern

Africa (Comesa)

The Common Market for Eastern and Southern Africa (Comesa), based inLusaka, Zambia, is the successor organisation to the regional PreferentialTrading Area (PTA), and came into force on December 8th 1994 after 12 mem-ber states ratified the integration treaty. Comesa is a rival to the SouthernAfrican Development Community (SADC) and includes Angola, Burundi,Comoros, Democratic Republic of Congo (DRC, formerly Zaire), Djibouti,Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda,Somalia, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. SouthAfrica’s decision not to join the organisation, which aims to liberalise tradebetween the member countries, has given the SADC the stronger hand.Mozambique and Lesotho gave notice in 1997 that they wanted to leaveComesa to concentrate on their membership of the SADC. Angola’s trade withthe Comesa countries is extremely limited.

The PTA, which was launched in 1981, aimed to liberalise trade and encourageco-operation in industry, agriculture, transport and communications, thus lay-ing the foundation for Comesa to push for a regional common market by 2000.The common market is expected to bring about complete freedom of move-ment of goods, services and capital, and eventually monetary union. In April1997 in Lusaka, Comesa heads of state agreed that a common external tariffstructure would be introduced to deal with all third-party trade. The mainobstacles to successful integration remain the unclear nature of the rel-ationship with the SADC, most of whose members also belong to Comesa, andthe diversity of the member states’ economies.

Generally, commitment to the organisation and its financing is rather frail.The administration budget of approximately $4m is heavily dependent onKenya and Zimbabwe. At the Lusaka meeting in 1997 members urged eachother to concentrate on financing activities, which has resulted in the post-ponement of sectoral meetings and other activities. The civil strife in Somalia,Sudan, Democratic Republic of Congo, Rwanda and Burundi has also con-strained attempts at regional integration.

The progressive liberalisation of intra-PTA trade began in July 1984, and amultilateral clearing facility, established in Harare, Zimbabwe, began oper-ations in February 1984. A PTA monetary unit of account (UAPTA), then equi-valent to the SDR, was used to settle debts between members every twomonths, the balances being payable in dollars. The 1997 heads of state meetingendorsed a proposal to replace the UAPTA with a Comesa dollar, tied to the USdollar.

By 1991 the clearing house was handling 70% of all intra-PTA trade. Accordingto the PTA secretary-general, intra-PTA trade grew at an annual average of over8% after 1985, reaching a total volume of $1.7bn in 1992. However, intra-Comesa trade still accounts for only about 6% of members’ global trade. Rea-sons for this small share include the distortions arising from widespread

Zimbabwe: Regional organisations 29


crossborder smuggling, a lack of political commitment and weak balance-of-payments and foreign reserves positions. While there are hardly any officialtrade links between many of the member states, a handful of countries (Kenya,Madagascar, Tanzania, Uganda, Zambia and Zimbabwe) account for 60% oftotal intra-Comesa trade. In 1996 Kenya alone exported some $900m of goodsto other Comesa countries, most of it to Uganda and Tanzania.

Another constraint has been the strict “rules of origin”, which stipulate thatpreferential treatment can be granted only to goods produced by companiesthat are managed by, and 51% of whose equity is held by, nationals of amember state. Kenya and Zimbabwe originally argued strongly against thisrule—after years of a sliding-scale arrangement it is once again under review,with particular attention being given to value-added provisions. The agreedschedule for removing customs barriers has been frequently revised. The mostrecent decision—to reduce import duties by 80% for member countries byOctober 1996—is a case in point. However, only five members have compliedfully, and most have consistently failed to meet the timetable for Comesa tariffreductions.

A PTA Trade and Development Bank was established in 1986, but only becameoperational in 1989. Now renamed the East and Southern African Trade andDevelopment Bank, its headquarters have been temporarily relocated fromBujumbura (Burundi) to Nairobi (Kenya). As well as the African DevelopmentBank, 15 Comesa members hold shares in the bank; and in December 1995 itstotal subscribed capital amounted to $82.9m.

The Lomé Convention The Lomé Convention affords a group of 71 African, Caribbean and Pacific(ACP) countries preferential trade and aid links with the EU. At a meeting inLibreville (Gabon) in October 1997, ACP leaders prepared a common positionfor negotiations, starting in 1998, for a successor agreement to the convention,which expires in 2000. The convention is increasingly at odds with globalisa-tion, and in a test case in 1997 the World Trade Organisation (WTO) ruled thataspects of the EU-ACP arrangements over banana imports were unfair. TheACP leaders meeting in Libreville resolved to concentrate on boosting intra-ACP co-operation, partly through organisations such as the Southern AfricanDevelopment Community (SADC).

The fourth and current convention (Lomé IV) was signed in 1989, replacingthe previous agreements signed in Lomé in 1975, 1979 and 1984. Lomé IVmaintains the long-term development aims of previous conventions, butplaces new emphasis on economic policy reform in member states in line withthe general emphasis on “conditionality” among multilateral funding bodies.The terms of Lomé IV hold for ten years, compared with five years previously.A new Financial Protocol was agreed by the EU in 1995 following protracteddiscussions. Whereas the UK and Germany sought to cut contributions andswitch to bilateral aid, France proposed an increase in total funding—less,however, than the stated requirements of the ACP countries. In the eventualdeal, total funding of Ecu14.6bn ($19bn) over five years was agreed, a 22%increase on the previous five years.

30 Zimbabwe: Regional organisations


To achieve the Lomé objectives, a series of instruments was clearly defined inthe convention. The most important was the European Development Fund(EDF), with an allocation of Ecu13.3bn under the Financial Protocol. The EDFis the main source of multilateral EU aid to the ACP states, most funding beingprovided as grants. The remaining Ecu1.3bn were allocated to the EuropeanInvestment Bank (EIB), which lends on a commercial basis. In addition, theACP states gained a 16% cut in import tariffs on the (mainly agricultural)products that did not previously enjoy preferential treatment.

The convention offers two other schemes that are separate from the FinancialProtocol. The Stabilisation of Export Earnings Scheme (Stabex) was set up tocover losses of earnings caused by a drop in prices or production of the mainACP agricultural exports. A total of 49 products are on the Stabex list. Fundingallocated to Stabex was increased by 62% to Ecu1.5bn under Lomé IV. Sysmin,a special financing facility for countries reliant on the export of minerals, wasincreased by 16% to Ecu480m. The schemes, however, suffer from a chronicshortage of funds.

Negotiations between the EU and the ACP countries on renewing the conven-tion are expected to start before the end of 1998. Most ACP countries are infavour of maintaining the status quo, but the EU is seeking to reform theconvention, which has failed to bring about the intended growth in trade. TheEU is expected to place greater emphasis on regional integration in ACP coun-tries, and by seeking separate sub-agreements within the Lomé Convention totake into account not only regional but also economic differences. The EU isalso expected to phase out preferential trade arrangements, which have comeunder increasing attack from the World Trade Organisation.

Southern AfricanDevelopment Community

(SADC)

In August 1992 Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia,Swaziland, Tanzania, Zambia and Zimbabwe signed a treaty establishing theSouthern African Development Community (SADC). It replaces the SouthernAfrican Development Co-ordination Conference (SADCC), which was formedin 1980 by the southern African states in a largely unsuccessful attempt toreduce the region’s economic dependence on white-ruled South Africa;Namibia joined SADCC shortly after independence in 1990. Mauritius becamethe 12th member in August 1995, and in 1997 the Democratic Republic ofCongo (DRC, formerly Zaire) and Seychelles became members.

SADC inherited SADCC’s secretariat, based in Gaborone (Botswana), and theresponsibilities of each member for co-ordinating a different policy sector haveremained broadly unchanged. Post-apartheid South Africa formally joined theorganisation on August 29th 1994 following its first multiracial elections. Theend of apartheid in South Africa has inevitably shifted some of SADC’s politicaland economic emphasis, although its goals remain broadly the same as thoseof SADCC: boosting southern Africa’s general economic independence, build-ing regional integration and trade, and mobilising support for national andregional projects. In mid-1994 (just before South Africa joined SADC) only 4%of members’ trade was within the community, while 25% was with SouthAfrica. The pattern has not changed greatly since then, despite South Africa’smembership.

Zimbabwe: Regional organisations 31


In August 1996 the presidents of the SADC countries, except Angola, signed aprotocol to create a regional free-trade area by progressively reducing and ulti-mately removing all import tariffs between member states over a period ofeight to ten years. Implementation of the plan has been complicated by pre-existing subregional trade groupings, such as the Southern African CustomsUnion (SACU), and individual countries’ reluctance to open vulnerable sectorsto competition. However, important progress was made in 1997, when allmembers agreed to ratify a trade protocol which provides for the phased reduc-tion and ultimate elimination of tariffs on goods originating in member states.South Africa, which has by far the largest economy in the region, has agreed toreduce its tariffs over an eight-year period; the other members have been givena ten-year period.

Some 90% of SADC’s funding for sectoral projects is from foreign sources. Inter-national support for the community should continue to be solid, even donorswarned in early 1995 that members should not expect to rely on continual aidhandouts. At present SADC members contribute equally to the annual budget of$12.5m.

SADC members want to increase their access to European markets and securestable commodity prices under the Lomé Convention, or whatever arrange-ment may replace it. At the same time the EU and South Africa are in negoti-ation over establishing a free-trade area between them. Many other SADCcountries, particularly members of SACU, feel threatened by such an arrange-ment and fear that they could be flooded by cheap European imports if theplan goes ahead. Negotiations between the EU and South Africa have run intodifficulties over the timetable for phasing out tariffs, but an agreement isexpected by the end of 1998.

SADC is consolidating its co-operation on non-trade issues, and intra-SADCagreements in areas such as mining, establishing a landmine-free zone anddrug-trafficking are proceeding.

Organisation of AfricanUnity (OAU)

The OAU was founded in 1963 by 30 African nations to promote solidarity andhigher living standards, to defend the sovereignty of member states and toeliminate colonialism. Another 21 signatories have since joined, the last ofwhich was South Africa in 1994. Morocco left in 1985. The OAU is committedto creating an Africa-wide customs union and to removing tariff and non-tariffbarriers by 2004. The organisation has been criticised as being just a talkingshop, and has been hampered for years by severe budgetary problems.

The foreign affairs ministers of member states meet twice a year to discuss theimplementation of the organisation’s accords. The issues raised are dealt withat the annual assembly of heads of state, which meets in June or July. Theannual conference is hosted by the member state that is due to take over thechairmanship of the organisation for the next year. The 1997 conference tookplace in Harare, where the Zimbabwean president, Robert Mugabe, took overfrom Paul Biya of Cameroon, although the latter did not attend the conference.There have, in addition, been three extraordinary conferences of heads of state:the first was in 1970 to discuss the Angolan crisis; the second, in 1980, sought

32 Zimbabwe: Regional organisations


to address the continent’s economic problems; and the third, in 1990, tried totackle the problem of African debt.

The OAU is committed to the creation of an African Economic Community(AEC), according to the Lagos Plan of Action drawn up in 1980. This wasoriginally scheduled to be in place by 2000, but at the 27th summit of heads ofstate in Abuja (Nigeria) in June 1991 this target was postponed to 2025. TheAEC treaty, signed at this summit, outlined six stages, including the removal oftariff and non-tariff barriers to trade and the establishment of a continent-widecustoms union by 2004. A commitment was also made to the establishment ofan African Common Market (ACM), with a central bank and single currency,by 2031.

The problem of conflict resolution has come to dominate the annual summitof heads of state. At the 1992 summit the OAU was criticised for never havingsuccessfully resolved a conflict in any of its member states. The possibility ofthe establishment of a military force to observe and monitor ceasefires negoti-ated by the OAU has been raised by several heads of state, but no formalcommitment has been made. The issue has been particularly pressing in thewake of renewed ethnic violence in Burundi in 1996, but the OAU againstopped short of agreeing to establish a military force, although it did sponsorpeace talks between Burundian factions in Addis Ababa.

Any move to step up the activity of the OAU is hampered by the organisation’ssevere budgetary problems. In November 1995 the ten worst debtors, owing$16.5m between them, were debarred from speaking or voting at any OAUmeeting. The return of full rights is conditional upon their paying a large partof their arrears. By the time of the 1997 summit, although the organisation’sfinances were in better shape than they had ever been, membership arrears stilltotalled $53m. The OAU’s budget for 1997/98 was set at $64m.

The OAU remains a high-profile talking shop and little real action results fromits policy decisions, constrained as it is by limited funds and the varying levelsof commitment of its members.

Sources of information

National statistical sources The Central Statistical Office (CSO) has experienced increasing difficulty inretaining trained statisticians in recent years, and has also had problems oper-ating new computer systems. Most of the listed CSO publications have becomeirregular and some, in particular the Statement of External Trade, have not beenpublished for many years. Only the Quarterly Digest of Statistics now has anyaspirations to regularity, and it is usually very late, while revisions in earlier dataare frequent. With the assistance of the World Bank, the CSO has produced newnational accounts data until 1996, incorporating the informal sector. TheReserve Bank of Zimbabwe (RBZ, the central bank) has a much better record.However, its non-financial data are dependent on the CSO. Some governmentdata are reported to the World Bank and the IMF, whose reports are frequentlymuch earlier sources of information than domestic official publications.

Zimbabwe: Sources of information 33


Central Statistical Office, Census 1992, Harare, 1994

Central Statistical Office, Quarterly Digest of Statistics, Harare

Central Statistical Office, Statistical Yearbook of Zimbabwe, Harare

Central Statistical Office, Stats-Flash (monthly), Harare

Government of Zimbabwe, Budget Estimates (annual), Harare

Government of Zimbabwe, ZIMPREST (Zimbabwe Programme for Economic andSocial Transformation 1996-2000), Harare, 1998

Reserve Bank of Zimbabwe, Quarterly Economic and Statistical Review, Harare

Reserve Bank of Zimbabwe, Monthly Bulletin, Harare

International statisticalsources

Energy Data Associates, Energy Balance, London

IMF, International Financial Statistics, Washington, DC

IMF, Zimbabwe-Recent Economic Developments, Washington, DC, 1997

OECD, Geographical Distribution of Financial Flows, Paris

United Nations, World Population Prospects, New York, 1996

World Bank, Global Development Finance, Washington, DC

World Bank, World Development Indicators, Washington, DC

World Bank, Zimbabwe: Achieving Shared Growth, Washington, DC, 1995

Select bibliography EIU, Zimbabwe’s First Five Years, London, 1981

EIU, Zimbabwe to 1996; at the heart of a growing region, London, 1992

Europa Publications, Africa South of the Sahara, London

Financial Gazette, weekly, Harare

First Merchant Bank of Zimbabwe, Quarterly Guide to the Economy, Harare

ING Barings, Economic and Market Monitor (quarterly), Johannesburg

Price Waterhouse, Doing Business in Zimbabwe, Harare, 1995

C Stoneman and L Cliffe, Zimbabwe: Politics, Economics and Society, PinterPublishers, London and New York, 1989

Zimbabwe Congress of Trade Unions, Beyond ESAP, Harare, 1996

Zimbabwe Independent (weekly), Harare

Internet sources:

Africa Online, online at http://www.africaonline.co.zw

Financial Gazette, online at http://www.africaonline.co.zw/fingaz

Mail & Guardian, online at http://www.web.co.za/mg/africa-archive/zim

Panafrica News, online at http://www.africanews.org/south/zim

Zimbabwe Independent, online at http://www1.samara.co.zw/zimin

34 Zimbabwe: Sources of information


Reference tables

Reference table 1

Defence expenditure(fiscal years; Jul-Jun)

Outturn Budget 1993/94 1994/95 1995/96 1996/97 1997/98a

Expenditure (Z$ m) 1,534.9 2,116.2 2,311.5 3,172.3 5,420.3 % of budget 8.5 8.2 7.1 8.9 8.3 % of GDP 4.9 5.3 4.9 3.7b 3.2b

a July 1997 to December 1998. b Based on GDP estimates believed to incorporate the informalsector, at 22% of the total.

Sources: Government of the Republic of Zimbabwe, Financial Statements; Central Statistical Office (CSO), Quarterly Digest of Statistics.

Reference table 2

Central government finances(Z$ m unless otherwise indicated)

Outturn Budgeta

1993/94 1994/95 1995/96 1996/97 1997/98

Revenue 13,677 16,514 20,877 27,290 52,542 Taxes, fees & investments 12,754 15,257 19,465 26,745 50,723 International aid grants 923 1,258 1,412 544 1,819

Expenditure 14,555 21,008 24,483 32,366 63,857 Recurrent 12,831 18,017 22,665 28,245 63,187 Capital 1,724 2,991 1,818 2,089 5,532

Balance –878 –4,494 –3,606 –5,077 –10,645

Contributions to sinking fund 122 121 124 160 270

Repayment of borrowingsExternal 1,363 1,649 1,768 2,245 3,882 Domestic 673 867 4,516 592 1,918 Long-term loans 1,210 1,982 1,656 2,141 1,951 Investments 133 52 49 89 142 Short-term loans (net) 31 –11 –41 –30 –220

Budget deficit incl net loans 4,409 9,154 11,678 10,274 18,588

Loan recoveries –114 –201 –123 –168 –460

Borrowing requirement 4,295 8,953 11,555 10,106 18,128 % of GDPb 13.8 22.5 24.5 13.0 12.2

FinancingInternational aid (loans) & external borrowing 1,721 1,849 2,943 2,154 4,200 Domestic borrowing 2,574 7,103 8,613 5,920 13,575

a 18-month budget; revised estimates. b GDP figures corresponding to financial year.

Sources: Government of the Republic of Zimbabwe, Budget Estimates; EIU.

Zimbabwe: Reference tables 35


Reference table 3

Budget account expenditurea

(% of total)

Outturn Budget1993/94 1994/95 1995/96 1996/97 1997/98

Constitutional & statutory appropriations 33.1 32.8 46.2 35.3 33.7

Vote appropriations 66.9 67.2 53.8 64.7 66.3 Education 17.2 16.3 15.6 20.3 19.8 Defence 8.5 8.2 7.1 8.9 7.7 Health & child welfare 6.0 5.7 5.8 6.6 5.4 Lands & agriculture 5.6 5.6 2.7 3.0 1.9 Transport & energy 4.9 6.5 3.3 2.9 1.3 Home affairs 4.6 3.9 3.5 4.2 4.2 Construction & housing 5.1 4.5 2.6 – – Vote of credit – – – – 7.5 Others 14.9 16.5 13.2 18.9 18.5

Total 100.0 100.0 100.0 100.0 100.0

a Original budget.

Sources: Government of the Republic of Zimbabwe, Financial Statements; Budget Estimates.

Reference table 4

Money supply(Z$ m unless otherwise indicated; year-end)

1993 1994 1995 1996 1997

Currency in circulation 1,191.4 1,467.1 1,823.5 2,342.4 3,395.9

Demand deposits 5,024.5 5,874.5 9,361.3 10,930.7 16,204.7

M1 6,215.9 7,341.5 11,184.7 13,273.1 19,600.6

M1 growth (%) 107.8 18.1 52.3 18.7 47.7

Quasi-money 2,924.6 4,745.3 4,493.1 12,403.9 17,913.6

M2 9,140.5 12,086.8 15,677.8 25,677.0 37,514.2

M2 growth (%) 62.9 32.2 29.7 63.7 46.1

M3 10,296.3 13,828.1 16,964.9 36,811.6 49,652.2

M3 growth (%) n/a 34.3 22.7 116.9 34.9Sources: CSO, Quarterly Digest of Statistics; Reserve Bank of Zimbabwe, Monthly Bulletin.

Reference table 5

Interest rates(year-end; %)

1993 1994 1995 1996 1997

Discount rate 28.50 29.50 29.50 27.10 32.50

Treasury bills 26.96 29.91 29.83 18.90 31.39

Discount house call money (upper limit) 28.25 32.00 29.50 23.50 31.00

6-month certificates of deposit (high) 29.00 32.00 31.00 22.00 35.00Source: Reserve Bank of Zimbabwe, Quarterly Economic and Statistical Review.

36 Zimbabwe: Reference tables


Reference table 6

Gross domestic product(factor cost)

1992 1993 1994 1995 1996

Total At current prices (Z$ m) 31,321 38,808 50,837 59,449 76,242 At constant (1990) prices (Z$ m) 18,881 19,265 20,284 20,237 21,696 Real change (%) –5.5 2.0 5.3 –0.2 7.2

Memorandum itemsPopulation (m) 10.41 10.78 11.15 11.53 11.91 GDP per head at current prices (Z$)a 3,303 3,941 5,026 5,774 7,187 GDP per head at constant (1990) prices (Z$) 1,982 1,940 2,003 1,940 2,015 Real change (%) –11.8 –2.1 3.2 –3.1 3.9 GDP per head at current prices (US$) 648 609 617 667 724

a Does not tally in source.

Source: CSO.

Reference table 7

Gross national product by expenditure(Z$ m unless otherwise indicated; constant 1990 prices)

1992 1993 1994 1995 1996

Private consumptiona 12,796 12,228 12,734 12,458 12,509 % change –21.8 –4.4 4.1 –2.2 0.4 % of GDP 55.9 58.5 57.0 55.7 52.1

Public consumption 6,132 4,329 5,323 4,708 4,788 % change 46.3 –29.4 23.0 –11.6 1.7 % of GDP 29.7 20.7 23.8 21.1 20.0

Gross capital formationb 3,954 4,572 5,275 4,387 5,000 % change –10.7 15.6 15.3 –16.8 14.0 % of GDP 19.2 21.9 23.6 19.6 20.8

Domestic expenditure 22,882 21,128 23,332 21,553 22,298 % change –8.4 –7.7 10.4 –7.6 3.5

Net exports of goods & services –2,190 –406 –481 –594 37

Statistical discrepancy –58 186 –518 1,397 1,657

GDP at market prices 20,634 20,908 22,333 22,356 23,992 % change –9.0 1.3 6.8 0.1 7.3

Net primary income from abroad –968 –888 –1,072 –1,003 –877

Gross national income 19,666 20,020 21,261 21,353 23,115 % change –10.0 1.8 6.2 0.4 8.3

a Including private non-profit bodies. b Including change in stocks.

Source: CSO.



Reference table 8

Gross domestic product by sector(Z$ m unless otherwise indicated; constant 1990 prices)

1992 1993 1994 1995 1996

Agriculture, hunting & fishing 2,474 3,145 3,375 3,129 3,798

Mining & quarrying 819 859 888 935 936

Manufacturing 4,146 3,825 4,209 3,726 3,875

Electricity & water 501 443 486 477 469

Construction 645 633 635 594 638

Finance & insurance 1,373 1,578 1,673 1,723 1,876

Real estate 522 549 569 594 617

Distribution, hotels & restaurants 3,268 3,277 3,504 3,696 3,986

Transport & communications 1,334 1,273 1,375 1,681 1,803

Public administration 1,208 1,153 997 1,002 951

Education 1,290 1,307 1,325 1,357 1,358

Health 347 381 466 441 458

Domestic services 339 331 346 327 343

Other services 930 924 951 900 936

Imputed bank service charges –315 –413 –514 –346 –348

GDP at factor cost 18,881 19,265 20,284 20,237 21,696Source: CSO.

Reference table 9

Employment and earnings by industrial sector and area

1991 1992 1993 1994 1995

Employment (’000; annual averages)Agriculture & forestry 304.2 300.6 323.6 329.4 334.0Manufacturing 205.5 197.2 187.7 199.8 185.9Other sectors 734.4 738.6 727.7 734.1 719.7Total 1,244.1 1,236.4 1,239.0 1,263.3 1,239.6

Average earnings by sector (current Z$)Agriculture & forestry 2,440 2,058 2,931 3,443 3,554 % change 11.2 –15.7 42.4 17.5 3.2Manufacturing 11,132 13,479 16,072 18,700 22,966 % change 16.5 21.1 19.2 16.4 22.8Other sectors 8,763 11,230 12,769 14,986 18,591 % change 5.2 28.2 13.7 17.4 24.1

Average earnings by area (current Z$)Harare 11,433 13,034 15,020 18,758 23,578 % change 17.4 14.0 15.2 24.9 25.7Bulawayo 9,563 10,796 11,901 15,077 18,108 % change 14.7 12.9 10.2 26.7 20.1Overall average earnings 7,609 9,359 10,700 12,564 15,194 % change 8.1 23.0 14.3 17.4 20.9Source: CSO, Quarterly Digest of Statistics.



Reference table 10

Prices(annual averages; net of sales tax and excise duty)

1992 1993 1994 1995 1996

High income, urban (1990=100)a 171.2 215.3 266.2 323.6 393.2 % change 38.7 25.7 23.6 21.6 21.5

Low income, urban (1990=100)a 180.0 239.4 294.2 366.5 454.3 % change 46.8 33.0 22.9 24.6 24.0

Consumer price index (1990=100) 175.2 223.6 273.4 335.1 406.9 % change 42.1 27.6 22.2 22.6 21.4

Building materials index (1990=100) 188.0 204.2 233.0 279.3 332.3 % change 36.8 8.6 14.1 19.9 19.0

a Calculated by the EIU using 1980 weights.

Sources: CSO, Quarterly Digest of Statistics; Stats-Flash.

Reference table 11

Enrolments at educational institutions

1980 1989 1992 1993 1994

Primary schools 1,235,994 n/a 2,383,197 2,404,941 2,476,575

Secondary schools 74,966 n/a 687,742 638,661 679,416

Total schools 1,310,960 n/a 3,070,939 3,043,602 3,155,991

Agricultural colleges 0 966 522 n/a n/a

Teacher training colleges 2,824 15,761 15,762 15,954 16,148

Technical collegesa 3,769 9,385 12,264 13,503 13,450

Universities 1,873 8,123 8,934 7,829 11,218

Total other institutions 8,466 34,235 37,485 37,286 41,086

a Excludes private colleges.

Source: CSO.

Reference table 12

Railways finance and traffic(fiscal years)

1991/92 1992/93 1993/94 1994/95 1995/96

Operating accounts (Z$ m)Revenue 918.0 849.1 879.0 1,127.5 1,348.3Expenditure –613.1 –620.5 –649.9 –791.8 –880.2Balance 304.9 228.6 229.1 335.7 468.1

Passengers carried (m) 2.36 2.20 2.03 1.67 1.65

FreightRevenue-earning volume (m imperial tonnes) 13.04 10.46 11.25 18.65 11.88Gross traffic (bn tonnes-km) 11.91 9.65 9.40 13.44 10.10Source: CSO, Quarterly Digest of Statistics.



Reference table 13

Airport traffica

1990 1991 1992 1993 1994

Flights in/out (no.) 168,995 181,326 173,925 160,498 170,037

Passengers (no.)b 1,596,650 1,616,645 1,543,321 1,436,515 1,471,252

Freight volume (imperial tonnes) 19,263 21,220 23,290 28,511 24,478

a Zimbabwe has eight airports, of which Harare, Bulawayo and Victoria Falls are classed as inter-national. b Excluding transit passengers.


Reference table 14

National energy statistics

1992 1993 1994 1995 1996

Coal (’000 imperial tonnes)Production 5,548 5,285 5,469 5,539 5,176Imports (incl coke) 28 0 28 37 19Exports: coal 43 20 74 64 36 coke 49 28 280 407 360

Electricity (m kwh)Production 8,187 7,185 7,894 7,634 7,357 Thermal 5,221 5,497 5,524 5,426 5,237 Hydroa 2,966 1,688 2,370 2,171 2,121Imports 827 1,707 2,071 2,734 3,708Total consumption 9,014 8,892 9,965 10,331 11,066

Liquid fuels (Z$ m)Imports 1,269.0 1,640.0 1,668.8 1,966.2 2,591.7

a From Kariba south bank.


Reference table 15

Assets of financial institutions(Z$ m; year-end)

1992 1993 1994 1995 1996

Commercial banks 8,062 10,480 14,132 16,636 26,623

Accepting houses 1,961 2,086 3,046 4,066 12,425

Building societies 2,916 3,892 5,808 10,088 13,843

Post Office Savings Bank 2,315 2,977 3,780 4,466 6,227

Discount houses 716 1,347 1,675 3,782 3,161

Agricultural Finance Corporation 1,125 1,086 1,343 1,518 2,030

Financial institutions 1,491 1,498 1,908 2,866 4,270Source: CSO, Quarterly Digest of Statistics.



Reference table 16

Stock-exchange indicatorsa

(annual averages; 1990=100)

1992 1993 1994 1995 1996

Value of turnover 82.7 705.8 900.2 967.9 1,839.8

Industrial share prices 77.3 155.0 210.7 236.4 407.1

Mining share prices 18.0 34.4 69.5 82.9 90.1

a There are 66 companies with shares quoted on the Zimbabwe Stock Exchange, of which sevenare primarily engaged in mining.


Reference table 17

Retail trade(value indices; 1980=100; annual averages)

1991 1992 1993 1994 1995

Specialised businesses Food, drink & tobacco 590.7 881.9 966.3 1,190.2 1,355.3 Clothing, footwear & drapery 342.9 357.2 394.9 560.7 599.9 Household goods 304.8 267.6 275.5 320.1 261.4 Motor trade 441.5 435.6 404.9 390.7 409.8 Others 366.8 408.3 528.4 557.9 477.7

Department stores 96.7 87.1 73.3 63.6 111.6

General merchandise 445.7 470.8 448.8 598.2 487.0

Total 522.1 576.4 582.0 697.6 767.3

Note. Specialised businesses are stores whose turnover comprises at least 50% of the type of goodsspecified; department stores are those with a turnover of over Z$250,000 per year (at 1969 prices),in which no type of good represents more than 50% of total sales; general merchandise tradecovers similarly non-specialised stores with lower turnover.


Reference table 18

Foreign visitors

1992 1993 1994 1995 1996

Total visitors 765,977 971,539 1,139,095 1,581,646 1,792,885 of which: on holidaya 629,466 732,645 937,245 1,268,580 1,410,847

a The remainder are in transit, on business or in education.




Reference table 19

Manufacturing production by value(gross output; Z$ m)

1990 1991 1992 1993 1994

Foodstuffs & stockfeeds 2,434.2 3,102.7 5,123.2 5,329.6 6,746.3

Drink & tobacco 1,197.1 1,844.3 2,073.1 2,523.4 3,208.4

Textiles (incl ginning) 1,293.4 1,758.5 1,772.3 2,584.1 2,607.7

Clothing & footwear 836.5 1,142.1 1,175.8 1,394.6 1,732.2

Wood & furniture 357.1 472.1 570.1 691.5 1,136.5

Paper, printing & publishing 734.5 888.4 1,020.2 1,132.9 1,553.7

Chemical & petroleum products 1,721.3 2,148.5 2,822.8 3,153.6 3,314.8

Non-metallic mineral products 306.4 475.1 640.1 740.2 1,076.6

Metals & metal products 2,355.8 3,138.4 4,674.7 4,107.1 5,662.7

Transport equipment 549.7 1,013.8 1,315.4 1,387.5 1,454.4

Other manufacturing groups 127.6 141.1 230.2 261.3 323.3

Total 11,913.6 16,125.0 21,417.9 23,305.9 30,144.5a

a Does not add in source.


Reference table 20

Manufacturing production by volume(1980=100)

% weightinga 1992 1993 1994 1995 1996

Foodstuffs & stockfeeds 13.5 150.1 123.1 129.6 141.9 127.6

Drink & tobacco 10.4 134.3 126.5 127.0 118.8 130.8

Textiles (incl ginning) 10.1 176.5 192.4 206.2 80.9 80.0

Clothing & footwear 7.2 124.5 127.7 125.2 100.0 101.7

Wood & furniture 4.4 105.9 95.3 106.1 114.9 160.3

Paper, printing & publishing 6.1 143.0 149.5 168.9 155.5 152.8

Chemical & petroleum products 12.5 138.1 129.2 148.7 133.6 136.9

Non-metallic mineral products 3.7 157.7 129.7 169.8 156.6 181.8

Metals & metal products 28.8 100.6 82.3 92.1 86.1 88.9

Transport equipment 2.1 141.0 82.0 132.6 138.6 200.5

Other manufacturing groups 1.2 39.4 95.0 84.6 53.2 54.5

Total 100.0 129.9 119.3 130.7 112.9 116.9

a Based on net output values in 1980.




Reference table 21

Minerals production by value(Z$ m)

1992 1993 1994 1995 1996

Gold 1,021.5 1,393.2 2,039.2 2,567.1 3,057.3

Nickel 353.9 369.1 631.5 738.9 634.0

Coala 218.2 404.8 453.1 557.1 648.2

Asbestos 347.7 475.7 515.7 586.5 716.5

Copper 100.0 87.8 155.1 188.7 177.3

Chrome ore 83.8 54.9 136.2 197.4 189.6

Iron ore 69.5 40.1 0.2 53.1 71.4

Cobalt 19.7 12.9 31.5 42.8 35.3

Silver 18.7 15.9 21.2 24.1 16.3

Tin 20.5 22.0 3.0 0.0 0.0

Othersb 165.3 149.6 230.9 293.7 428.4

Total 2,418.7 3,026.3 4,217.6 5,249.4 6,052.1c

a Sales. b Mainly precious stones, phosphate, tantalite, magnesite, diamonds, limestone and lith-ium. c Does not add in source.


Reference table 22

Minerals production by volume(’000 imperial tonnes unless otherwise indicated)

1992 1993 1994 1995 1996

Gold (’000 oz) 587 598 660 770 792

Nickel 10.1 11.9 13.5 10.9 9.7

Coal 5,548 5,285 5,469 5,539 5,176

Asbestos 150.0 157.0 152.0 169.7 165.6

Copper 9.6 8.1 9.3 8.1 8.9

Chrome ore 521.6 252.0 516.4 707.5 658.0

Iron ore 1,181 375 4 311 324

Silver (’000 oz) 488 387 354 504 320

Tin (tonnes) 716 658 82 0 0

Total output (index 1980=100) 107.0 104.4 112.9 124.6 123.4Source: CSO, Quarterly Digest of Statistics.



Reference table 23

Crop sales to/through marketing authoritiesa

1992/93 1993/94 1994/95 1995/96 1996/97

Volume (’000 imperial tonnes)Maize 12.6 1,349.9 1,171.0 67.5 932.2Wheat 56.9 276.2 203.3 0.7 48.9Sorghum 0.0 4.5 0.5 0.0 3.9Tobacco: flue-cured 200.6 218.4 169.2 198.8 201.5 burley 10.1 16.8 8.6 10.2 6.1Cotton 59.9 205.0 178.9 84.3 297.2Soybeans 30.6 3.2 0.4 0.0 0.1Groundnuts 0.2 0.7 2.3 2.7 1.5Sunflowers 9.9 45.2 29.2 8.2 17.2Coffee 5.0 0.1 0.6 0.1 0.0Sugarb 22.0 56.0 520.0 n/a n/a

Value (Z$ m)Total crop salesc 2,046.2 4,322.6 5,625.1 5,469.1 9,928.2Maize 6.9 1,209.9 1,048.6 70.1 707.4Wheat 56.5 398.2 227.7 0.8 119.3Sorghum 0.0 2.0 0.2 0.0 3.6Tobacco: flue-cured 1,625.7 1,752.7 2,335.9 3,584.7 5,849.2 burley 62.0 101.3 93.6 94.5 115.2Cotton 172.9 610.2 703.9 453.1 1,699.2Soybeans 29.9 2.9 0.6 0.1 0.3Groundnuts 0.2 0.5 3.2 7.1 3.4Sunflower 9.3 66.1 40.3 12.2 26.7Coffee 18.3 0.2 6.6 1.5 0.4Sugar 64.6 177.0 1,164.4 1,245.0 1,403.3

a April-March. b Calendar year. c Including others.

Sources: CSO, Quarterly Digest of Statistics, supplemented in some cases by Stats-Flash and industry publications.

Reference table 24

Sales of livestock products

1992 1993 1994 1995 1996

Volume (’000 unless otherwise indicated)Milk (tonnes) 220.8 204.8 196.9 200.2 n/aCattle 522.7 407.8 345.7 385.1 337.2Sheep 38.5 34.2 35.2 34.7 35.5Goats 23.1 30.0 46.1 42.6 38.1Pigs 207.4 148.7 181.0 238.2 231.4

Value (Z$ m)Milk 233.1 227.5 291.2 353.6 n/aCattle 448.0 704.9 847.7 1,087.0 1,255.2Sheep 2.2 3.6 6.4 6.2 6.3Goats 1.0 2.5 4.6 4.1 5.3Pigs 58.8 62.9 83.8 131.7 149.2Total 743.1 1,001.4 1,233.7 1,582.6 n/aSource: CSO, Quarterly Digest of Statistics.



Reference table 25

Construction statistics(Z$ m unless otherwise indicated)

1992 1993 1994 1995 1996

Building plans approved 916.6 889.3 1,112.4 1,308.7 1,415.5 Industrial 148.8 135.7 190.2 136.4 76.0 Commercial 333.0 209.3 155.1 248.8 182.0 Residential 364.4 391.5 635.7 794.1 1,045.3 Othersa 70.4 152.8 131.5 129.3 112.1Low-cost houses (no.) 554 347 673 1,505 2,349High-cost houses (no.) 1,591 1,611 2,390 2,329 2,203

Work completedPublic sector 606.0 841.2 1,056.4 679.0 n/aPrivate sector 888.5 1,069.9 931.1 1,053.4 n/aTotal 1,494.5 1,911.1 1,987.5 1,732.4 n/aPublic sectorb

(% of total) 52.1 61.7 70.1 59.9 n/a

a Mainly halls, schools and hospitals. b Work done for the public sector by itself and by privatecontractors.


Reference table 26

Foreign trade by value(Z$ m)

1992 1993 1994 1995 1996

Total exports fob 7,333.6 10,164.2 15,365.2 18,359.0 24,209.3 Gold 833.4 1,539.7 1,846.8 2,153.7 2,976.4 Re-exports 91.0 55.4 99.4 181.9 216.7 Domestic exports 6,409.2 8,569.1 13,419.0 16,023.4 21,016.2 of which: unmanufactured tobacco 2,205.5 2,396.0 3,162.2 3,978.2 7,055.2 food 401.8 915.3 2,517.8 2,640.1 3,282.2 ferro-alloys 577.6 648.9 940.2 1,858.0 1,690.3 nickel 364.5 346.0 657.5 761.6 771.3 iron & steel ingots, billets, bar, etca 249.2 333.9 133.7 128.0 257.0 asbestos 285.7 364.2 460.6 607.4 638.3 cotton lint 138.6 155.6 481.5 393.0 793.6 textiles, clothing & footwear 591.2 785.6 1,213.3 1,161.1 992.4

Total imports cif 11,232.3 11,798.4 18,270.7 23,048.1 28,095.1 of which: fuels & electricity 1,331.1 1,723.6 1,810.0 2,072.7 2,915.8 chemicals 1,321.4 1,639.9 2,986.0 3,171.1 3,755.2 manufactured goods 1,611.6 1,724.3 2,979.0 3,945.4 4,522.1 machinery & transport equipment 4,122.8 4,139.0 7,559.0 9,754.4 10,884.6 of which: non-fuel petroleum products 119.7 197.2 134.5 167.7 228.0 plastic materials 297.2 332.7 609.3 816.6 822.3 yarns, threads & textile piece goods 248.7 283.9 570.0 688.6 845.1 telecommunications equipment 163.2 326.2 423.7 580.7 863.9 motor vehicles & spares 713.4 901.9 1,614.2 2,225.0 2,446.7 metal structures, sheets etcb 280.8 233.8 385.8 599.0 634.7

a Including iron and steel bar, rod and sections, wire and railway construction materials. b Including bars, rods, sections and iron and steel platesand sheets.




Reference table 27

Exports by volume(imperial tonnes unless otherwise indicated)

1992 1993 1994 1995 1996

Meat, fresh, frozen or chilled 10,540 16,400 11,208 15,015 9,512

Maize & maize seed 25,345 215,826 568,881 287,817 234,917

Sugar, raw & refined 11,135 352 225,643 164,790 188,084

Tobacco, flue-cured, leaf & stripped 114,168 149,605 185,457 131,666 147,818

Coal & coke 92,265 47,617 354,333 470,465 396,647

Ferro-alloys 186,188 182,715 209,904 279,343 272,680

Iron & steel ingots, billets, bar, etca 274,733 170,218 65,814 74,437 97,157

Nickel 10,810 11,004 17,100 12,697 11,950

Asbestos 128,811 124,223 129,289 174,558 152,091

Cotton lint 14,772 17,971 46,739 26,449 35,073

a Including iron and steel bar, rod and sections, wire and railway construction materials.


Reference table 28

Main trading partners(Z$ m)

1992 1993 1994 1995 1996

Total exports fob 6,409.2 8,569.1 13,419.0 16,023.4 21,016.2 of which: EUa 2,131.3 2,742.8 4,913.9 6,297.4 7,076.0 UK 728.2 946.5 1,780.1 2,059.2 2,112.8 Germany 441.8 512.9 929.4 1,318.4 1,669.8 Italy 239.0 317.0 470.7 760.8 906.9 Netherlands 207.1 300.7 616.9 566.0 788.3 Portugal 42.8 70.8 213.4 316.0 380.3 Belgium 157.1 212.3 289.8 467.8 367.3 Spain 113.3 111.9 212.0 269.4 352.4 France 88.3 110.0 225.3 274.7 200.1 Sweden 20.7 64.8 60.6 102.4 131.3 Austria 27.8 77.4 43.5 67.3 87.6 Denmark 65.2 18.5 72.2 95.4 79.2SADCb 1,908.1 2,806.7 4,140.7 4,729.7 5,473.5 South Africa 872.8 1,221.7 1,780.0 2,011.6 2,025.0 Zambia 246.0 434.4 515.4 806.6 911.9 Botswana 332.6 478.9 761.1 788.3 835.1 Mozambique 216.6 351.0 448.9 447.9 779.5 Malawi 206.6 277.5 375.3 432.9 608.9 Namibia 10.7 22.3 175.9 141.2 242.7 Angola 22.8 20.9 84.1 101.2 70.4US 410.9 612.1 870.8 760.7 1,399.8Japan 392.9 564.2 769.7 1,089.1 1,067.5China 222.2 148.3 234.2 489.5 713.0Switzerland 320.7 289.0 278.9 180.3 477.0Hong Kong 78.1 64.2 29.8 115.9 403.5Indonesia 61.3 81.3 134.9 196.5 375.3Australia 43.6 50.0 128.6 103.8 145.6India 30.9 58.7 68.5 114.5 128.8Canada 18.1 21.5 143.9 32.7 51.1

continued



1992 1993 1994 1995 1996

Total imports cif 11,232.3 11,798.4 18,270.7 23,048.1 28,095 of which: unclassified petroleum 1,048.9 1,368.5 1,318.8 1,436.7 1,653.2EUc 3,138.0 3,215.7 4,828.0 5,616.2 6,705.7 UK 1,272.7 1,190.0 1,878.3 1,857.0 2,228.8 Germany 724.0 574.2 1,073.1 1,170.4 1,365.0 France 191.5 289.8 373.7 865.5 868.9 Italy 236.4 178.1 354.4 426.4 691.8 Netherlands 171.5 303.4 354.3 398.7 492.1 Sweden 116.6 243.6 254.4 286.0 280.4 Belgium 139.5 158.4 219.3 285.5 278.5 Finland 129.0 110.6 98.1 79.2 240.0 Denmark 72.3 81.8 129.1 141.3 155.3 Austria 84.5 85.8 93.3 106.2 104.9SADCd 3,052.1 3,649.0 6,368.3 9,508.1 11,431.7 South Africa 2,737.0 3,186.4 5,953.6 8,789.9 10,767.3 Botswana 154.2 329.2 302.6 487.8 384.6 Zambia 72.1 91.0 53.5 133.4 148.7 Swaziland 88.8 42.4 58.6 97.0 131.1Japan 599.3 713.3 1,045.4 1,465.5 1,442.7US 1,013.5 1,049.2 967.5 1,038.0 1,406.9Australia 95.3 100.9 126.5 138.7 456.0Switzerland 198.5 226.5 536.1 340.1 419.8India 36.5 45.3 109.0 147.2 400.8South Korea 20.7 42.8 198.1 235.5 396.3Hong Kong 48.6 80.0 198.2 283.7 301.1Brazil 123.0 87.5 160.6 171.4 300.4Taiwan 105.6 96.2 241.8 226.7 286.9China 112.2 208.3 167.9 241.0 214.7Malaysia 41.7 51.1 126.8 87.7 214.7Canada 74.4 82.2 86.8 222.4 137.1

a Excluding data for Greece, Ireland, Luxembourg and Finland. b Excluding data for Lesotho, Namibia, Swaziland. c Excluding data for Greece,Ireland, Luxembourg, Portugal and Spain. d Excluding data for Angola, Lesotho, Malawi, Mozambique and Tanzania.




Reference table 29

Balance of payments, IMF estimates(US$ m)

1990 1991 1992 1993 1994

Goods: exports fob 1,748 1,694 1,528 1,609 1,961

Goods: imports fob –1,505 –1,646 –1,782 –1,487 –1,804

Trade balance 243 48 –255 122 158

Services: credit 264 274 305 372 383

Services: debit –496 –627 –661 –564 –712

Income: credit 23 26 26 35 28

Income: debit –286 –278 –302 –287 –321

Current transfers: credit 204 192 347 271 69

Current transfers: debit –92 –91 –64 –65 –30

Current-account balance –140 –457 –604 –116 –425

Direct investment (net) –12 3 15 28 30

Portfolio investment (net) –22 7 –10 –5 50

Other long-term capital 277 526 368 304 –106

Errors & omissions –10 –31 37 15 80

Overall balancea 86 45 –195 226 –86b

a Totals may not add due to rounding. b Does not add in source.

Source: IMF, International Financial Statistics.

Reference table 30

Balance of payments on current account(Z$ m)

1991 1992 1993 1994 1995

Goods: exports fob 5,195 6,720 8,795 13,529 12,833

Goods: imports fob –5,678 –8,825 –9,695 –14,157 –14,079

Re-exports fob 94 91 74 99 181

Gold (net) 774 833 1,540 2,074 2,627

Internal freight (net) –92 –96 –67 –149 –260

Shipment services (net) –567 –1,260 –1,147 –1,740 –1845

Other transport services (net) –69 –256 –263 –381 –318

Tourism & business travel Credit 278 551 892 1,443 1,930 Debit –256 –278 –285 –808 –1,088

Direct investment Income Credit 0 3 6 21 6 Debit –286 –375 –363 –900 –1,437

Other investment income Credit 92 127 218 198 319 Debit –760 –1,118 –1,426 –1,679 –1,653 Other goods, services & income (net) –615 –616 –496 –879 –945

Unrequited transfers private Credita 336 540 597 1,108 1,566 Debita –330 –336 –427 –398 –514 Public (net) 325 1,232 1,142 1,490 1,446

Net current-account balance –366 –1,559 –3,062 –905 –1,127

a Including workers’ remittances, migrants’ funds, pensions and non-commercial transactions.




Reference table 31

Balance of payments on capital account(Z$ m)

1991 1992 1993 1994 1995

GovernmentCredit 1,085 3,257 2,911 3,313 2,127.4Debit –549 –1,100 –1,472 –2,708 –1,690.6

Other publicCredit 789 1,115 1,920 806 821.5Debit –351 –1,264 –2,227 –512 –1,786.8

Privatea

Credit 442 796 1,612 3,285 5,246.2Debit –244 –359 –479 –857 –1,130.8

Net capital-account balance 1,173 2,445 2,265 3,326 3,586.8

Net current-account balance –1,559 –3,062 –905 –1,127 –1,766.9

Total balance of payments –387 –617 1,360 2,199 1,819.7

a Including statistical discrepancy.


Reference table 32

Net official development assistance from OECD and OPEC areasa

(US$ m)

1992 1993 1994 1995 1996

Bilateral 535.8 310.1 280.3 347.7 280.8 of which: Japan 49.9 28.2 25.7 65.6 46.7 UK 75.6 19.4 37.8 45.9 25.2 Germany 58.6 59.8 25.9 42.1 30.5 US 91.0 27.0 34.0 29.0 17.0 Sweden 64.6 35.8 34.0 29.0 35.9 Canada 27.2 14.7 13.4 12.5 9.4

Multilateral 259.5 190.6 284.0 148.6 96.1

Totalb 792.6 500.1 561.7 492.7 374.2 of which: grants 527.1 309.2 380.2 440.0 319.9

a Disbursements minus repayments. Official development assistance is defined as grants and loans with at least a 25% grant element,administered with the aim of promoting development and welfare in the recipient country. IMF loans, other than Trust Fund facilities, areexcluded, as is aid from the former Eastern bloc. b Totals do not add in source.

Source: OECD Development Assistance Committee, Geographical Distribution of Financial Flows to Developing Countries.



Reference table 33

External debt(US$ m unless otherwise indicated; debt stocks as at year-end)

1992 1993 1994 1995 1996

Total external debt 4,071 4,299 4,537 5,053 5,005 Long-term debta 3,148 3,417 3,664 3,904 3,766 Short-term debt 706 601 497 685 801 Use of IMF credit 216 282 376 461 437

Public disbursed long-term debt 2,853 3,111 3,421 3,525 3,338Official creditors 1,952 2,363 2,726 2,860 2,763 Multilateral 967 1,311 1,519 1,633 1,583 Bilateral 986 1,052 1,207 1,227 1,180Private creditors 901 748 695 665 575 of which: bonds 210 180 150 120 90 commercial banks 197 116 114 153 163

Total debt service 595 618 603 649 664 Principal 387 406 372 404 424 Interest 208 212 231 245 240

Ratios (%)Total external debt/GNP 78.5 80.7 82.1 80.5 69.2Debt-service ratiob 32.0 30.6 25.4 23.5 21.2Private debt/total external debt 7.3 7.1 5.4 7.5 8.6Short-term debt/total external debt 17.3 14.0 11.0 13.6 16.0Concessional loansa/total external debt 27.0 28.4 32.1 30.1 28.8Variable interest-rate loansa/total external debt 21.9 20.9 18.3 19.0 19.1

a Maturity over one year. b Total debt service as a proportion of exports of goods and services.

Source: World Bank, Global Development Finance.

Reference table 34

Net resource flows(US$ m unless otherwise indicated)

1992 1993 1994 1995 1996

Servicing 204 231 263 271 261 Interest on long-term debt 157 170 193 196 184 Profit remittances on FDIa 74 61 70 75 77

Net transfers 558 274 141 239 48

Net resource flows 788 504 404 510 309 Net flow of long-term debt (excl IMF) 437 325 55 144 20 Foreign direct investment 15 28 35 40 63 Portfolio equity flowsb 0 0 50 18 17 Grants (excl technical co-operation) 336 151 264 307 209

a Foreign direct investment. b The market was opened to foreign investors in June 1993.

Source: World Bank, Global Development Finance.



Reference table 35

Foreign reserves(US$ m; year-end)

1993 1994 1995 1996 1997

Foreign exchange 431.1 405.1 594.6 588.9 159.6

SDRs 0.9 0.1 0.8 9.8 0.3

IMF reserve position 0.1 0.1 0.1 0.2 0.2

Total reserves excl gold 432.0 405.3 595.5 598.8 160.1

Golda 79.1 89.7 139.7 117.2 56.0

Total reserves incl gold 511.1 495.0 735.2 716 216.1

a Valued at 75% of fourth-quarter London price.

Source: IMF, International Financial Statistics.

Reference table 36

Exchange rates(period averages)

1993 1994 1995 1996 1997

Z$:US$ 6.472 8.150 8.658 9.921 11.891

Z$:SDR 9.524 12.240 13.831 15.576 25.125Source: IMF, International Financial Statistics.

Editor:All queries:

Markus ScheuermaierTel: (44.171) 830 1007 Fax: (44.171) 830 1023



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