News / Africa

Zimbabwe's Economy on Recovery Path

Zimbabwe's Finance Minister says his country’s economy is on the path to recovery after decades of decline and will meet all its financial obligations for this year. .

Cars speed along in Harare, Zimbabwe’s capital city.  The formation of a coalition government in 2009 by President Robert Mugabe and Prime Minister Morgan Tsvangirai has led to the sound of constant activity in the city.

There is life!

Before, the city was almost dead as was the country’s economy.  

Tendai Biti was appointed Zimbabwean Finance Minister in 2009 when almost every commodity was in short supply.  Inflation was running wild then, but is now the lowest in the southern Africa region.

“By the end of the year we would have reduced our primary balance to zero, in other words our books will balance and we are not going to carry a deficit in 2013," Biti says when speaking of 2012. "For a finance minister this is pleasing because we are eating what we are killing. ”

That zero primary balance only applies to domestic debt. The African country has a $10 billion foreign debt.

In September, the International Monetary Fund (IMF) raised concerns over the failure by Sudan, Somalia and Zimbabwe to honor their commitments to pay their financial debts.

The finance minister says he would ensure the foreign debt remains in check and he will not commit where the country cannot sustain the obligation.

“It is bad economics and we do not practice bad economics,” Biti says.

One of the big economic problems facing the country is the funding of elections and a constitutional referendum in 2013.

Recently Biti told journalists that funding of the polls was giving him a headache as 2012 ends.

“2013, the biggest challenge is funding the elections and the referendum," says Biti. "t is clear that our resources are not going to be enough. It is quite clear that the international community has to come in for assistance.”

The Zimbabwe Electoral Commission wants nearly $200 million for the elections and the referendum.

African leaders want a new constitution in Zimbabwe to ensure free and fair elections. On several occasions President Mugabe has threatened to hold elections under the current constitution.

Lovemore Madhuku, a professor from the University of Zimbabwe, thinks time is running out for President Mugabe who turns 89 years old in February. Mr. Mugabe will be the Zanu PF party presidential candidate running against Movement for Democratic Change (MDC) candidate, Prime Minister Tsvangirai who is 60 years old.

“If we delay elections four, five months after that [February 2013], the mentality would be that the president is now 90 years. And those kind of things would work against him, I see an election coming as soon as possible more like around end of March," says Madhuku. "If he does not do that means he has totally failed to have an election according to his own plan and the MDC would have won there. He might not want that.”

Zimbabwe’s agricultural-based economy took a nosedive in early 2000 when Mugabe embarked on a chaotic and violent land reform exercise targeting white commercial farmers.  But now the economy has improved since the creation of the unity government in 2009 but it still has to figure out a way to pay for the constitutional referendum and elections planned for 2013.

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