Country Report Zimbabwe March 2009

Summary

Having manipulated the country's power-sharing negotiations, the president, Robert Mugabe, may now be able to hang on to power. But the economic and humanitarian catastrophe that he has created makes his position tenuous.
The stance of the next president of South Africa towards Zimbabwe will be crucial, as he will have the power to force a change in Zimbabwe's leadership.
Economic policy will continue to be driven by political considerations, and the economy will continue to contract, at a forecast rate of 4.7% in 2009 and 3.7% in 2010.
Hyperinflation will continue throughout the outlook period, and will only begin to be brought under control once a government that is commited to halting the printing of money to finance its activities is in place.
Inflation will continue to undermine the value of the currency, and the dollarisation of the economy is set to increase.
The global economic slump will reduce demand for Zimbabwe's metal exports in 2009-10. However, the chronic shortage of foreign currency and a collapse in demand will lead to a fall in imports, reducing the trade deficit.

Zimbabwes new power-sharing government was sworn into office in mid-February, but Mr Mugabe in effect remains in control.
A prominent member of the Movement for Democratic Change, Roy Bennett, has been charged with involvement in a plot to sabotage the previous government. However, the evidence against him is weak.
The power-sharing government has run into difficulties over the appointment of civil servants.
A new finance minister, Tendai Biti, has been sworn into office. Mr Biti has promised major reforms to economic policy.
A key priority of Mr Biti has been to secure external financial assistance to help rehabilitate the economy. However, potential donors are proving reluctant to commit funds.
The IMF announced on March 5th that after a two-year break it will send a delegation to Zimbabwe on March 9th to assess the situation and to meet with Mr Biti and other senior officials in the new government.
Confusion has continued to beset the mining industry, with various government officials issuing conflicting statements over their plans for the sector.

Source: Country Report

This report covers the following industry codes:
SIC Code: 10
NAICS Code: 212