Zimbabwe’s government public accounts are now dangerously close to bankruptcy, warned its Finance Minister Tendai Biti on Tuesday, with the country set to approach international donors for cash in order to fund a constitutional referendum and elections expected to be held later this year.
At least $2 billion worth of diamonds have been stolen from Zimbabwe’s eastern diamond fields over the last four years through a network of government ministers and military officials aligned with President Robert Mugabe, claimed a diamond industry watchdog on Monday, with concern growing that the stolen diamonds may be used to finance Mugabe’s elections campaign expected for next year.
Foreign-owned banks in Zimbabwe have been ordered to transfer 51 percent of their shares to black locals within a year, reported the Financial Times this week, though the policy is now facing opposition from some government officials.
Zimbabwe consumes more energy than it can produce; and in order to meet this energy shortfall, the country has been importing energy from its neighbours. But what happens when Zimbabweans can no longer pay for their energy, and how did the country get into this situation in the first place?
In the 32 years of his benighted rule, Zimbabwe’s President Robert Gabriel Mugabe has done more damage to the country than its former white-led minority government ever did.
Zimbabwe is a Lower income economy comes under the Sub Saharan African region, as to the classification made by the World Bank on the basis of income and region for the year 2006.
Political instability and inflationary pressure have acted as the major threats to the country’s economy. The economy of the country largely depends upon the agricultural sector. Services constitute the largest share in the total GDP.
New mining in Zimbabwe has quickly yielded millions of carats of diamonds and could help catapult the nation into the ranks of the world’s top diamond producers,
according to the head of a group of experts for the United Nations-backed effort to stop the trade in conflict diamonds.
But the new wealth has provoked fears that the riches will be used to subvert attempts
to bring democracy to a country that has long suffered under authoritarian rule, and also to finance conflicts.
When it comes to a difficult economy, the Zimbabwe government realizes they have work cut out for them. One challenge is the financial deficit, which has been difficult to manage. In addition, the country’s currency exchange rate has been overvalued. Other issues currently being faced include low food stuffs for consumer use and high inflation rates. When Zimbabwe was involved with the war, literally hundreds of millions of dollars were siphoned from the economy. Since then, many obstacles must be overcome.
