Country Report Zimbabwe November 2009

Outlook for 2010-11

• The Movement for Democratic Change (MDC) will continue to threaten withdrawal from the government of national unity (GNU), but there are few signs as yet that it is prepared to follow through on this.
• The party may damage its credibility both with its own supporters (in the diaspora particularly) and regional governments.
• The timetable for drawing up a new constitution is likely to slip again, suggesting that elections will not be held before mid-2011 at the earliest.
• Economic policy is likely to remain chaotic for much of the forecast period, as the turf war between the central bank and the Ministry of Finance continues.
• The inflation rate is set to decline rapidly as the highs of 2008 drop out of the calculations. The 2010 rate is likely to be in single digits for the first time in two decades, therefore.
• Gold earnings will be boosted by higher production and international prices in 2010, before moderating again in 2011 as the price falls.

Monthly review

• The MDC announced its "disengagement" from the GNU—an apparent (and almost certainly doomed) attempt to persuade Southern African governments to put pressure on Robert Mugabe.
• Under a revised timetable, the new constitution is due to be put to a referendum in September 2010, leading to elections early in 2011.
• The business community is becoming increasingly disenchanted with the GNU's failure to improve the operating and investment environments.
• Zimbabwe has again been ranked as one of the worst-governed countries in Africa.
• Prices fell again in September, for the sixth time this year. The minister of finance now expects prices to fall by 5% in 2009 (using the US dollar index with a December 2008 base).
• Capacity utilisation rose in the first half of 2009, according to the Confederation of Zimbabwe Industries, but companies remain constrained by a lack of finance.
• A number of mining companies, including Rio Tinto and Mwana Africa, have announced plans to increase production.

This report covers the following industry codes:
SIC Code: 60;10
NAICS Code: 52;212