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What next for Zimbabwe's crippled economy?

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Zimbabwe was once known as the bread-basket of Africa thanks to its abundant agriculture, but the economy has deteriorated disastrously under Robert Mugabe.

Crippled by hyperinflation, it turned to the dollar after its own currency became almost worthless, though it has a growing “informal” economy.

So what’s left, and where does it go from here?
AGRICULTURE
The scale of Zimbabwe’s economic disaster can be measured in wheat production – which fell from 320,000 tons in 1990 to 20,000 last year.
Prodigious exports of this product, as well as maize, the country’s other staple, have collapsed after the seizure of land from white farmers starting in the 1990s.
In many cases this left crops in the hands of people who had no farming experience – and overall, food production halved.
Zimbabwe, once a net food exporter, last month took action to ban the import of fruit and vegetables in order to save foreign currency.

Image: Tobacco is a key export
TOBACCO
Tobacco exports now form a major part of the economy, with China and South Africa the biggest customers.
Last year it earned $589m from sales of the product, but income has been lower in 2017.
The 2016 figure was lower than the year before after the crop was hit by a drought.
MINING
Zimbabwe generates half of its export earnings from mining, particularly gold and platinum, but these industries have also been hobbled by intervention.
Diamonds saw production fall to 961,000 carats last year, down from 3.5 million the year before, after the government seized all gem mining in the east of the country.
In August, the country’s central bank ordered platinum and chrome miners – Zimbabwe’s main foreign currency earners – to surrender 80% of their exports, up from 50%, to help contain a shortage of dollars.
:: How Zimbabwe’s economy has collapsed under Mugabe

Image: The Zimbabwean currency was hit by hyperinflation as the economy deteriorated
CHINA

China, the world’s second biggest economy, now accounts for more than half of all foreign direct investment in Zimbabwe.
It has helped revived tobacco exports, patched up the country’s energy infrastructure and built its first solar power plants, as well as putting up a $200m shopping mall in the west of Harare.
China has signalled since the army takeover that its “friendly policy” would not change.
Beijing has stood by Mr Mugabe in the face of Western economic sanctions and in 2008 vetoed a proposal at the UN to impose an arms embargo as well as travel and financial restrictions on the president and other officials.
SANCTIONS
The US in 2003 imposed targeted sanctions, a travel ban and an asset freeze against Mr Mugabe and his close associates – pointing to his government’s human rights abuses and evidence of electoral fraud.
Britain also has financial sanctions in place on Zimbabwe.

Image: Mr Mugabe has faced Western sanctions
CORRUPTION
Transparency International last month estimated that the country was losing at least $1bn a year to corruption.
It pointed to police, local councils and the driving licence authorities as being among the worst offenders, but critics point to high-level graft.
The lavish lifestyle of Mr Mugabe’s wife has earned her the nickname “Gucci Grace” – after she purchased mansions in South Africa, rare diamond jewellery and Rolls-Royce limousines for her playboy sons.

Image: Grace Mugabe has been given the nickname ‘Gucci Grace’
THE FUTURE
After decades of economic contraction, Zimbabwe has seen something of a recovery over the last decade, though this has since stalled.
The World Bank, in a report earlier this year, judged that its fundamentals for economic growth and reduction in poverty remained strong, provided it could resolve “political fragilities” and introduce investment and fiscal reforms.
It concluded that Zimbabwe had “enormous potential” given its generous endowment of natural resources as well as existing public infrastructure and skills base.
A report from the International Monetary Fund made similar findings while also highlighting Zimbabwe’s difficulties.
“Despite the challenges, a vibrant private sector and a growing informal economy have demonstrated surprising resilience,” it said.

Source: SKY News