Changes

Following the Lancaster House settlement in December 1979, Zimbabwe enjoyed a brisk economic recovery. Zimbabwe inherited one of the strongest and most complete industrial infrastructures in sub-Saharan Africa, as well as rich mineral resources and a strong agricultural base. Real growth for 1980-81 exceeded 20%. However, depressed foreign demand for the country's mineral exports and the onset of a drought cut sharply into the growth rate in 1982, 1983, and 1984. In 1985, the economy rebounded strongly due to a 30% jump in agricultural production. However it slumped in 1986 to a zero growth rate and registered a 3% contraction in GDP in 1987 due primarily to drought and foreign exchange crisis. Growth in 1988-90 averaged about 4.5%.  

Following the Lancaster House settlement in December 1979, Zimbabwe enjoyed a brisk economic recovery. Zimbabwe inherited one of the strongest and most complete industrial infrastructures in sub-Saharan Africa, as well as rich mineral resources and a strong agricultural base. Real growth for 1980-81 exceeded 20%. However, depressed foreign demand for the country's mineral exports and the onset of a drought cut sharply into the growth rate in 1982, 1983, and 1984. In 1985, the economy rebounded strongly due to a 30% jump in agricultural production. However it slumped in 1986 to a zero growth rate and registered a 3% contraction in GDP in 1987 due primarily to drought and foreign exchange crisis. Growth in 1988-90 averaged about 4.5%.  

Since the mid-1990s, this infrastructure has been deteriorating rapidly, but remains better than that of most African countries. Poor management of the economy and political turmoil have led to considerable economic hardships. The Government of Zimbabwe's chaotic land reform program, recurrent interference with the judiciary, and maintenance of unrealistic price controls and exchange rates have led to a sharp drop in investor confidence. Since 1999, the national economy has contracted by as much as 35%; inflation vaulted over 7,634.8% (year on year) in July 2007; and there have been persistent shortages of foreign exchange, fuel, and food. Direct foreign investment has all but evaporated. In a desperate attempt to control inflation, the government forced firms and supermarkets to reduce prices by half in July 2007, which resulted in severe shortages of basic and other commodities.  

Since the mid-1990s, this infrastructure has been deteriorating rapidly, but remains better than that of most African countries. Poor management of the economy and political turmoil have led to considerable economic hardships. The Government of Zimbabwe's chaotic land reform program, recurrent interference with the judiciary, and maintenance of unrealistic price controls and exchange rates have led to a sharp drop in investor confidence. Since 1999, the national economy has contracted by as much as 35%; [[inflation]] vaulted to [[hyperinflation]] of over 7,634.8% (year on year) in July 2007; and there have been persistent shortages of foreign exchange, fuel, and food. Direct foreign investment has all but evaporated. In a desperate attempt to control inflation, the government forced firms and supermarkets to reduce prices by half in July 2007, which resulted in severe shortages of basic and other commodities.  

Agriculture is no longer the backbone of the Zimbabwean economy. Large scale commercial farming has been effectively destroyed over the course of the last five years under the government's controversial land reform efforts starting in 2000. Corn is the largest food crop and tobacco had traditionally been the largest export crop, followed by cotton. Tobacco production in 2006, however, slumped to its lowest level--about 50 million kg--since independence, off from a peak in 2000 of 237 million kg. Gold production, another former key foreign currency source, slid by about 48% in the first half of 2007 to 4.54 metric tons compared to the corresponding period in 2006. Poor government management has exacerbated meager corn harvests in years of drought or floods, resulting in significant food shortfalls every year since 2001.  

Agriculture is no longer the backbone of the Zimbabwean economy. Large scale commercial farming has been effectively destroyed over the course of the last five years under the government's controversial land reform efforts starting in 2000. Corn is the largest food crop and tobacco had traditionally been the largest export crop, followed by cotton. Tobacco production in 2006, however, slumped to its lowest level--about 50 million kg--since independence, off from a peak in 2000 of 237 million kg. Gold production, another former key foreign currency source, slid by about 48% in the first half of 2007 to 4.54 metric tons compared to the corresponding period in 2006. Poor government management has exacerbated meager corn harvests in years of drought or floods, resulting in significant food shortfalls every year since 2001.