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Tuesday, 4 April, 2000, 16:46 GMT 17:46 UK
Zimbabwe's economic woes

Crisis and corruption have caused fuel shortages
By BBC News Online's Martin Asser

Zimbabwe is in the midst of its worst economic crisis since the coming of majority rule in 1980 which many analysts blame on a combination of mismanagement and corruption on the part of President Robert Mugabe's government.

The country went from Marxism to an IMF-sponsored structural adjustment programme at the start of the 1990s, to a situation in recent years which analysts say is bereft of any kind of sound economic policy at all.

Zimbabwe figures
Per capita GDP
$2,400
GDP by sector (1997)
40% services
32% industry
20% agriculture
Labour force
5,000,000
With elections looming, Mr Mugabe has printed money to give 90% pay rises to placate civil servants, tribal leaders and the army, while borrowing heavily in the domestic market in an attempt to cope with a hard currency crisis and a budget deficits expected to reach $45bn by the end of the year, the equivalent of 15% of GDP.

To some degree Zimbabwe's problems stem from a neglect of capital expenditure under the auspices of the IMF, running down once-superior infrastructure and health and education systems.

But in the last three years the government has abandoned all its budgetary targets, leading to a withdrawal of IMF support and turning Harare into a pariah in international aid and investment circles.

Out of power

This is a position that the country can ill afford to be in. Dependant on fuel imports, Zimbabwe's debt crisis has contributed to the energy shortage of recent months, causing power cuts to mines, farms and factories and lengthy disruptions to domestic supply.

Agriculture, a mainstay of the economy - in particular tobacco which is responsible for about 30% of exports - is already in crisis, with redistribution of land threatening to cause a dramatic fall in production.


Mugabe: Impervious to criticism of his policies
An overvalued currency means prices paid to exporters are kept low while the possibility of diesel shortages make farmers wary of planting crops when they might not have enough fuel to harvest their produce.

Zimbabwe's economic crisis has led to unemployment believed to be as high as 50% or more with inflation hovering between 50% and 60%.

War and disease

On the other hand, the work force - in fact particularly the most economically active sectors of society - has been ravaged by the HIV and Aids, which has hit Zimbabwe harder than almost anywhere else in the world.

About a quarter of the adult population is infected with HIV and it is estimated that about 200 people die each day of Aids. The people most vulnerable to infection are young professionals whose lifestyle and mobility has put them at risk.

Agriculture is the mainstay of the economy
Life expectancy in Zimbabwe, once one of Africa's healthiest countries, has dropped to only 38 years.

The knock-on effect can be seen with orphans dropping out of education and absenteeism from work to care for sick relatives. In other words, Aids is not only a human tragedy in Zimbabwe but an economic scourge.

Unfavourable comparisons have been made between the $1m a month spent on Aids prevention with the more than $1m a day thought to have been poured by Harare into the conflict in the Democratic Republic of Congo.

Crooked deals

Zimbabwe is involved in the Congo despite not bordering the war-torn country. It is widely assumed that one reason for interest there comprises personal enrichment in diamonds and land for Mr Mugabe and his coterie.

Assumption of corruption abroad is encouraged by the chronic corruption and cronyism reported from Zimbabwe itself.

More than two-thirds of population live in poverty
Leaving aside the introduction of public sector huge pay rises in the months before elections, there are numerous indications Harare's political elite has been lining its pockets in crooked deals while the country has been going to the wall.

While not reaching the levels of treasury looters such as Mobuto of Zaire, Zimbabwe has seen large sums being siphoned off from privatisations, massive fraud in the national oil company which contributed to the fuel crisis and extravagant private buildings being paid for by the state.

In all it is a sorry situation, with a country often described as having "enormous economic potential" now facing serious instability after the neglect of economic policy.

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01 Apr 00 | Africa
Zimbabwe protests turn violent
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