Develop a global partnership for development

Where we are?

  • Overall economic decline between 2000 and 2008 with a cumulative real GDP decline of 40 percent. This was characterised by hyperinflation that peaked at 500 million percent  by December, 2008 and nominal GDP estimated at $3,498 million in 2009 (IMF Report,2009)
  • Decline in ODA levels and the only significant flows have been directed towards humanitarian support averaging $700 million in 2008.
  • Unemployment rate is high due to economic decline (no official estimates but pundits put it at 92 percent).
  • Recent reform measures have witnessed macro-economic stabilization after the adoption of the multi-currency system (dollarization). The inflation now averages 1 percent by October,2009 and real GDP grew by 3.7 percent according to mid-term fiscal review(July,2009).
  • The restoration of relations with the donors is a priority of the inclusive Government formed in February, 2009 since this will unlock funds for programmable support.
  • The country owes the World Bank, IMF and AfDB approximately $ 4.1 billion that will require a debt clearance strategy in order to lift the sanctions.
  • The total external debt was $ 5,885 million at end of 2008 and this translates to 185 percent of the GDP(IMF Report, 2009).
  • On the external trade, export volumes declined by 14.7 percent and imports increased by 12.7 percent in 2008 resulting to negative terms of trade.
  • The overall balance of payment was negative and stood at 612 million dollars at the end 2008.

Sources of statistics: IMF Report 2009, Draft NHDR Report 2007, draft Mid-Term MDG Report 2007, Preliminary MIMS Report 2009, Zimbabwe MDG Report 2004.

Millennium Development Goals Overview in Zimbabwe
Zimbabwe continues to have commitment to the attainment of the MDGs at the highest level. In this regard the whole national MDG process is coordinated under the Poverty Eradication and Social Services Delivery Cabinet Action Committee (PESSA), which is chaired, by the Ministry of Labour and Social Services. On the UN side the United Nations Development Programme (UNDP) is the lead coordinating agency working with government.

It is hoped that the MDG agenda will continue to constitute the development vision and underpin the planning framework for Zimbabwe.

"As a nation with oneness of purpose together we can score these goals"

A decade of macroeconomic instability, characterised by high inflation, sharp contraction of GDP, rising poverty and unemployment have culminated in a severe human development crisis in Zimbabwe. These events have significantly undermined the Country's progress on the realisation of the MDGs as overall real economic performance remained negative for much of the decade,. Structural unemployment rose to an estimated 80% in 2008 and the proportion of people below the Food Poverty Line (FPL) increased from 29% of the population to 58% between 1995 and 2003. Human development, as measured by the HDI deteriorated from 0.468 to 0.410 during the same period.

However, despite the widespread socio-economic and political hardships there was a general decline in HIV and AIDS prevalence. It is estimated that HIV prevalence among 15-24 year olds declined from 26.5% in 2001 to 15.6% in 2007. This is the first such decline in Southern Africa. Secondly, Zimbabwe had almost achieved universal primary education with an increase in the Net Enrolment Ratio (NER) from 96% in 2000 to 99 % in 2002, but this has since declined to 97% in 2006. The country's economic demise over the years has been exacerbated by the severe brain drain, deterioration of basic services and infrastructure and a rapidly declining quality of education.

In 2008, the political tensions negatively impacted efforts to implement and deliver interventions on poverty reduction, including compounding the efforts at raising resources towards supporting development and social service provisions. The new Inclusive government that came into office in February 2009 has opened new opportunities for dialogue, the scaling up of poverty reduction activities and reaffirming the Government's commitment and support to the achievement of the MDGs.

Status and Trends

In recent years, Zimbabwe has faced serious economic challenges that have eroded its capacity to remain competitive in regional and international markets. The country continues to face sanctions from some western countries and withdrawal of funding from international financial institutions due to the non-payment of its debt obligations. Added to this a significant proportion of the population currently resides outside the country, mainly in South Africa and in the United Kingdom.

Zimbabwe’s very limited access to international finance for devel­opment for most of the past decade has led to a reliance on sharply depleted internal resources and humanitarian aid. Currently, its only international reserves consist exclusively of the IMF’s Special Drawing Rights (SDR) from a Global Finance Facility equivalent to US$510 million (SDR 262 million), which is equivalent to about two months’ import cover.

The country’s balance of trade position has suffered from the fall in international commodity prices experienced during the first half of the decade 2000–2010 and the global economic crisis in the latter half. Between 1980 and 2008, exports grew by 0.4% while imports grew by 0.3% a year, which is an indication of significant decline. These disruptions were further accentuated by the ongoing domestic financial crisis. The 2009 account deficit 30% of GDP was increasingly financed by the further accumulation of external payment arrears, the draw-down of dwindling reserves, and short term suppliers’ credits.

Zimbabwe’s deterioration in performance in the export market could be attributed to an overreliance on commodity exports, distortions in foreign exchange market, particularly during the crisis period, and declining competitiveness. On the ease of doing business, Zimbabwe was ranked position 159 out of 183 countries in the 2010 Doing Business Report.

The Inflation Rate, Average Year-on-Year
Runaway inflation was brought under full control with the adop­tion of the multi-currency basket in 2009. As a result, year-on-year inflation decelerated rapidly from a peak of 500 million per cent in

December, 2008, down to -7.7% in December 2009.

The External Debt Position

Zimbabwe’s external debt obligations grew rapidly by a significant 30.3% over the five-year period 2005 to 2010, which is a stark contrast to the deceleration of -1.63% in the previous five-year period 1999–2004. This sharp deterioration can be explained by the accelerated economic decline that occurred during the latter period, and which compromised the country’s ability to service its debt obligations in a timely manner.

Benefits from New Technology
The penetration rate or tele-density for the mobile network in 2010 has risen by 40% to 17.52 lines per 100 inhabitants since 2007. Government continues to encourage investments in this sector by permitting duty-free importation of related equipment. Econet Wireless, one of the three mobile companies, launched its 3G technology in 2009 and the 4G version in May 2010. Telecel Zimbabwe is on its way to launching 3G technology. Currently, mobile network companies are installing city and intercity fibre optic links. Connectivity with Botswana, Malawi, Mozambique, South Africa, and Zambia will be completed before the end of 2010.

In relation to computing, the number of personal computers in the country has increased, rising from 620,000 in 2003 to 895,000 in 2009. The rate of progress in PC availability has been slow, largely due to ten years of domestic economic crisis.

Economic Partnerships with Strategic Neighbours
Zimbabwe is part of a strategic partnership in the Southern African Development Community (SADC) for road, railway, and air travel. It is also an important trade route for the Common Market for Eastern and Southern Africa bloc. Existing partnership arrangements within SADC include Economic Development Corridors (EDCs) or Spatial Development Initiatives/Transport Routes.

Official Development Assistance (ODA)
Following difficult relations with some bilateral partners, the imposi­tion of sanctions by some Western countries, and the withdrawal of financial assistance by the Bretton Woods Institutions and the African Development Bank, Zimbabwe does not benefit from direct budget support. In the past few years, the limited Official Development Assistance has been mainly in the area of humanitarian support.

Requirements for Achieving Goal 8

Zimbabwe has made only limited progress on striking strategic partnerships. Hence the country may not meet the targets in MDG 8 unless it com­prehensively addresses the issues of competitive­ness and promotes integration with regional and global markets.  The country also needs to implement a debt and arrears clearance strategy as well as normalise its relations with international partners.

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