Zimbabwe WT/TPR/S/252 
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I. ECONOMIC ENVIRONMENT 
(1) MAIN FEATURES OF THE ECONOMY  
1. With its abundant natural resources and edu cated workforce, Zimbabwe has significant 
potential for steady and rapid growth.  Its landlocked situation is alleviated by easy access to several 
sea ports in Mozambique, South Africa, and Namibia.   Although its infrastructure is still among the 
best and most extensive in Sub-Saharan Africa,  several years of poor maintenance have caused 
widespread deterioration;  electricity and water cuts have become commonpl ace.  Zimbabwe imports 
between 35% and 45% of its electrical power needs, while its considerable potential for hydroelectric 
and thermal power generation remains mostly untapp ed.  Once largely self-sufficient, Zimbabwe has 
become a net food importer since la nd ownership issues came to the fore of socio-political tensions 
(Chapters II and IV). 
2. Zimbabwe's economy is relatively diversified, w ith the GDP shares of services and of mining 
and quarrying on an upward trend, and those of  manufacturing and agriculture on a downward path 
(Chart I.1 and Table I.1).  The services sector makes up approximately half of Zimbabwe's GDP, largely on account of the transport and commun ication and tourism sub-sectors.  Despite its 
comparatively modest contribution to GDP, agriculture provides livelihood to about 70% of the 
population
1;  weather factors remain a major determinant of the sector's performance.  Although its 
GDP share is still small, the mining sector has th e potential to develop into a major pillar of the 
economy;  Zimbabwe's abundant shallow deposits c ould constitute a cost advantage over other 
producers of minerals. 
0204060
2005 20100.05.010.015.020.025.0
2005 2006 2007 2008 2009 2010Chart I.1
Main sectors of the economy, 2005-10
Agriculture, hunting and fishing
Services
Mining and quarryingManufacturing
Electricity and waterAgriculture, hunting and fishing
Manufacturing
Transport and telecommunication
Distribution, hotels and restaurants
Mining and quarrying
Electricity and water
Finance and insurance
Source : Data priovided by the Zimbabwean authorities.Per cent of GDP
 
3. South Africa accounts for a considerable share of  Zimbabwe's commercial flows (section (3)). 
During the review period, Zimbabwe's total fore ign trade in goods and services represented nearly 
100% of GDP, reflecting domestic production's sharp contraction, as well as poor, mostly 
                                                      
1 Agribank online information.  Viewed at:  http://www.agribank.co.zw/index.php?option=com_ 
content&task=view&id=100&Itemid=76. WT/TPR/S/252 Trade Policy Review 
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irreconcilable statistics;  the IM F has flagged "serious shortcomings in all major areas of data 
production".2 
Table I.1  
Selected macroeconomic  indicators, 2005-10 
2005 2006 2007 2008 2009 2010 
Miscellaneous 
Population growth (%) -0.1 -0.1 -0.1 0.1 0.5 .. 
GDP at market prices (US$ million, 
current prices) 5,583.4 5,203.3 5,018.2 4,246.5 5,625.0 6,716.0 
GDP per capita (US$, current prices) 447.6 417.6 403.1 340.7 449.2 499.0 
Real GDP (% change) -6.1 -3.3 -3.7 -17.3 5.7 8.3  
Sectoral distribution of GDP (%) 
Agriculture, hunting, and fishing 22.9 22.8 22.0 16.0 17.2 17.1 
Industry 31.4 31.2 31.1 30.0 31.6 32.0 
  Mining and quarrying 6.4 6.2 6.2 5.0 9.3 8.9 
  Manufacturing 18.6 18.7 18.4 18.2 16.2 16.7 
  Electricity and water 5.7 5.7 5.8 6.0 5.4 5.3 
  Construction 0.7 0.7 0.7 0.8 0.6 1.0 
Services 45.7 46.0 46.9 54.0 51.6 52.2 
  Finance and insurance 2.5 2.4 2.4 2.0 4.4 5.0 
  Real estate 3.2 3.1 3.1 2.4 2.2 3.8 
  Distribution, hotels and restaurants 10.0 10.1 10.7 13.2 12.1 13.0 
  Transport and communication 14.3 14.6 14.9 18.8 16.8 14.3 
  Public administration 4.3 4.4 4.3 4.9 3.7 3.3 
  Education 3.2 3.2 3.2 3.6 4.1 3.7 
  Health 1.3 1.4 1.4 1.5 1.7 1.5 
  Domestic services 2.0 2.0 2.0 2.3 2.0 2.3 
  Other services 4.9 4.8 4.8 5.3 4.7 5.4 
Less fin. int. services indirectly measured 0.0 0.0 0.0 0.0 -0.4 -1.2 
Government finance (% of GDP) 
Revenue 17.6 10.5 4 3.4 22.2 26.1 
    Tax revenue 11.6 7.5 2.7 3.3 20.1 24.9 
Expenditure 18.3 32.6 10.8 6.5 25 33.7 
Fiscal balance -0.7 -22.1 -6.8 -3.1 -2.8 -7.6 
Government debt 69.0 77.7 86.6 105.3 97.3 96.1 
    External payment arrears 37.1 47.6 54.9 72.3 81.5 72.9 
National accounts (% change) 
Government consumption expenditu re -41.8 85.4 -19.0 0.0 1.3 126.4 
Private consumption expenditure -70.0 395.7 24.6 -8.8 29.2 37.3 
Government fixed capital formation 2.2 -2.5 -4.5 -0.7 0.7 .. 
Private fixed capital formation 48.9 -82.6 -8.4 -17.4 -3.0 .. 
Monetary aggregates (% change) 
M1+ 547.4 1,315 66,659 390,067×1015 38.9 32.9 
M2+ 552.2 1,427.5 67,890 351,671×1015  35.8 64.1 
Prices and interest rates (end of period) 
CPI (year-on-year % change) 585.8 1,281.1 66,212.3 231,150,888.9a -7.7 3.2 
Overnight rate, secured (%) 540.0 500.0 975.0 10,000.0 n.a. n.a. 
Overnight rate, unsecured (%) 550.0 600.0 1,100.0 40,000.0 n.a. n.a. 
Table I.1 (cont'd)  
                                                      
2 IMF (2011). Zimbabwe WT/TPR/S/252 
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2005 2006 2007 2008 2009 2010 
Exchange rate (Annual average) 
Z$ per US$ 22.4 164.4 9,675.8 6,715,424,238.8 n.a. n.a. 
Memorandum 
Current account (% of GDP) -11.1 -7.0 -4.8 -18.3 -16.5 -20.3 
Government external debt/ XGS (%) 213.9 217.1 228.4 256.9 283.4  297.0  
Gross official reserves (US$ billion) 60.5 74.2 152.5 75.9 365.8 477.3 
Gross official reserves (months of imports 
of goods and services) 0.3 0.3 0.7 0.3 1.2 1.0 
Trade in goods and services (% of GDP) 77.1 86.6 89.1 113.8  100.7  95.8 
.. Not available. 
n.a. Not applicable. 
a As at July 2008. 
Source:  World Bank, World Development Indicators ;  IMF, Country Report  No. 10/186 and No. 09/139;  and data from the 
Reserve Bank of Zimbabwe and the Ministry  of Finance and Economic Development. 
4. A decade-long socio-political crisis (Chapters II and V) has had a devastating impact on 
Zimbabwe's economic fundamentals and social indicator s.  According to the authorities' most recent 
estimates, some 48% of the population live in extreme poverty3;  rates of mortality and malnutrition 
are on the rise.  Although Zimbabwe is still consider ed a developing country, its per capita income fell 
below the LDC average in 2006 and has not rebounded above that benchmark since then;  in 2010, 
GDP per capita was estimated at US$499 (Table I.1).  The national currency, the Zimbabwean dollar, 
had depreciated continuously.  Its collapse has led to the de facto  adoption of the U.S. dollar as legal 
tender since February 2009 (section (2)).4  
(2) RECENT ECONOMIC DEVELOPMENTS  
5. After growing at an average annual rate of about  5% in the first decade of independence, the 
Zimbabwean economy went through a cycle of boo ms and busts in the 1990s, and entered a severe 
recession at the turn of the century.  Between 2000 a nd 2008 real GDP contracted by more than 40%;  
the general pattern of sustained decline was common to  all sectors of the economy.  The root cause of 
Zimbabwe's poor economic perform ance has been socio-political, further aggravated by the 
controversial Fast Track Land Reform Programme (Chapters II and V).  Until February 2009, the 
Government's policy response to the ensuing capital flight and withdrawal of support from the 
international community (Chapter V) was to finance the budget by money creation.  Amid the worsening economic performance, budgetary outlays have been on the rise whereas revenue streams 
have not kept apace.  
6. Upon formation of Zimbabwe's Inclusive G overnment in 2009 (Chapters II and V), public 
finance management shifted to a cash budgeting princi ple;  expenditures are strictly limited to the 
resource envelope determined by revenue inflows.
5  Recent efforts to improve the fiscal position have 
included:  broadening the base for VAT on imports (C hapter III(2)(v));  raising the royalty rates on 
gold and platinum (Chapter IV(3)(i));  repea ling certain tariff rebates and tax incentives;  
                                                      
3 Ministry of Finance (2011). 
4 Zimbabwe had accepted the obligations under Artic le VIII of the IMF Statut es with effect from 
3 February 1995. 
5 Full advance payment is no longer required for the delivery of goods and services.  In 2010, fixed 
capital formation accounted for about 18% of the budgeted outlays, against 82% consumed by current 
expenditures;  the civil service wage bill was the single largest component (54.5%) of the total budget, representing some 15% of GDP. WT/TPR/S/252 Trade Policy Review 
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consolidating the administration of public resources through a computer-based public finance 
management system6;  and implementing results-based budgeting in state agencies.  
7. Extensive money creation, coupled with quasi -fiscal foreign exchange support under ad-hoc 
incentive schemes and a dual interest rate policy,  significantly weakened th e national currency and 
fuelled a severe hyperinflation in the run-up to 2009 .  Attempts to contain price escalation through 
administrative control measures, whose scope was significantly broadened in 2007 (Chapter III(4)(iv)), proved ineffective and exacerba ted the crisis.  As the situation continued to 
deteriorate, inflation reporting was suspended for the second half of 2008. 
8. An acute shortage of foreign currency in the context of a steadily depreciating Zimbabwean 
dollar led to the imposition of restrictions on paymen ts made outside Zimbabwe in 2002.  In light of 
its authority to approve all foreign payments, the Reserve Bank of Zimbabwe (RBZ) drew up a 
priority list for imports of goods and services, with a view to guaranteeing the supply of those indispensible for domestic production.  While the sy stem for allocation of foreign currency underwent 
successive modifications between 2004 and 2009, the priority list and RBZ approval of all foreign 
payments were maintained.  A prescribed exchange rate was also in place for the mandatory surrender 
of (a portion of) export earnings;  an informal fo reign exchange market existed in parallel.  
9. In February 2009, the Inclusive Government of Zimbabwe adopted a multi-currency system, 
suspending official use of the Zimbabwean dollar, pending a review of the monetary regime in 2015
7;  
the foreign exchange surrender requirement was abo lished within a month and price controls were 
relaxed.8  As a result, inflation returned to single-di git levels, despite the upward pressures caused by 
a limited supply of smaller denominations and coins of the officially accepted currencies (Table I.1).  
In 2010, the major inflation drivers were food, hous ing, utilities, education, and health.  The recent 
depreciation of the U.S. dollar against the currenc ies of Zimbabwe's main trading partners has 
renewed inflationary pressures, as domestic pr oduction remains heavily dependent on imported 
inputs. 
10. In the context of a liquidity crunch, exacerbate d by the absence of an interbank market and a 
lender of last resort, access to conventional 90- and 180-day trade financing facilities has been very 
limited.9  The authorities have intensified efforts to secure and channel funds in support of economic 
recovery (Chapter III(4)(i)).  In addition, the lender  of last resort function of the RBZ is gradually 
being restored;  to that effect, an initial amount  of US$7 million was made available to financial 
                                                      
6 A comprehensive review of the system's key building blocks is currently under way with a view to 
achieving efficient service delivery and ensuring fiscal disc ipline.  It is expected that the reformed system will 
encourage development partners to provide direct budge tary support in the knowledge that resources will be 
used for the intended purposes. 
7 Although five foreign currencies (the U.S. dollar,  the South African rand, the euro, the pound sterling, 
and the Botswana pula) have been granted official status , there has been a general pr eference for the U.S. dollar 
and, to a lesser extent, the South African rand.  Funds denominated in domestic currency that remain dormant in 
bank accounts are valued at some US$6 million, at the exchange rate of Z$35 quadrillion per US$1 
(IMF, 2010b). 
8 Prior approval from the RBZ is still required fo r the following transactions:  foreign investors' 
divestments from private entities;  cross-border investments by Zimbabwean companies;  domestic corporate 
bodies' investments on both the money and capital markets outside Zimbabwe;  and operation of offshore accounts by Zimbabwean corpor ate bodies.  According to th e authorities, the purpose of these restrictions is to 
prevent capital flight from Zimbabwe. 
9 At end-2010, less than 3% of overall bank loans in Zimbabwe had longer maturity (Ministry of 
Finance, 2011). Zimbabwe WT/TPR/S/252 
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institutions in February 2011.10  Measures aimed at restoring confidence in the financial system, 
including through recapitalization and strengthening  of the national deposit protection scheme, are 
also under way (Chapter IV(5)(ii)).  In total, fiscal discipline and the adoption of a multi-currency 
system have contributed to a modest improvement in real GDP growth.  However, economic recovery 
remains fragile and has yet to translate into a signi ficant decrease of unemployment, which may be as 
high as 80% according to some estimates.11   
11. Except for a modest surplus in 1999, Zimbabwe  has consistently posted a deficit in its 
external current account since 1991.  After decreasi ng slightly in 2006-07, the current account deficit 
grew significantly to reach some 20% of GDP in 2010 (Table I.2).  While the merchandise trade 
account mirrored that trend, recording a deficit of  approximately US$1.8 billion in 2010, the deficit in 
the services account narrowed to US$61 million.  Th e strong rise in merchandise imports was driven 
by purchases of energy products, intermediate inputs, and capital goods, as well as higher global 
prices for foodstuffs.  The improvement in the servi ces account was driven mostly by a recovery in 
holiday travel receipts.  
Table I.2  
Balance of payments, 2005-10 
(US$ million) 
2005 2006 2007 2008 2009 2010a 
Current account (excl. official transfers) -620.4 -365.4 -242.8 -778.6 -927.8 -1,363.1 
Balance on goods, services and income -783.5 -804.7 -682.8 -1,403.5 -1,853.8 -2,025.5 
Balance on goods and services -586.3 -596.0 -437.5 -1,179.3 -1,653.4 -1,825.6 
Merchandise trade balance -411.4 -475.0 -294.2 -972.3 -1,621.8 -1,764.6 
Exports 1,582.6 1,721.4 1,818.9 1,657.3 1,591.3 1,927.2 
Imports -1,994.0 -2,196.5 -2,113.1 -2,629.5 -3,213.1 -3,691.8 
Balance on servicesb -174.9 -120.9 -143.3 -207.0 -31.7 -61.0 
Credit 276.7 234.0 198.0 168.5 415.1 446.0 
Debit -451.6 -354.9 -341.4 -375.5 -446.7 -507.0 
Transportation (net) -296.5 -253.5 -247.5 -292.2 -359.7 -411.5 
Travel (net) 121.6 132.6 104.1 85.2 328.0 350.5 
Balance on investment incomec -197.1 -208.7 -245.3 -224.2 -200.4 -199.9 
Credit 87.2 88.5 82.7 65.2 81.8 86.2 
Debit -284.3 -297.2 -327.9 -289.5 -282.2 -286.1 
Balance on current transfersd 163.1 439.4 439.9 624.9 926.0 662.4 
Credit 174.0 452.9 451.8 637.4 938.8 675.6 
Debit -10.9 -13.6 -11.9 -12.4 -12.8 -13.3 
Balance on capital and financial acc ount 2.7 87.5 166.2 272.7 -556.5 766.4 
Long-term capital (net) -203.7 -120.7 12.1 -174.0 -127.9 11.1 
Short-term capital (net) 89.7 145.4 73.4 322.4 -991.6 275.1 
Direct investment (net) 101.7 40.0 65.8 51.6 105.0 85.2 
Portfolio (net) -11.9 -34.0 -27.5 0.0 67.0 95.0 
Grants 27.0 56.8 42.3 72.7 391.0 300.0 
Net errors and omissions 409.3 -8.3 -246.2 -219.4 -424.2 0.0 
a Projections. 
b Non-factor services:  includes ship ments, other transport, and travel. 
c Includes interest (payments on due basis/scheduled). 
d Includes home-link, humanitarian aid, and migrant effects. 
Source:  WTO Secretariat, based on informa tion provided by the authorities. 
                                                      
10 These funds are accessible on a first-come, first-serv ed basis, with the inte rest rate currently set 
at 5%.  Government securities and deeds of transfer on immovable property qualify as acceptable collateral. 
11 African Development Bank (2011). WT/TPR/S/252 Trade Policy Review 
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12. Zimbabwe's gross international reserves remain very low (about one month of import cover in 
2010).  Its external debt has reached unsustainable  levels owing to the accrual of arrears, which 
represented some 69% of the total external liabilities at end 2010. 
(3) TRADE AND INVESTMENT PATTERNS  
13. Zimbabwe's total merchandise trade nearly dou bled in 2005-10, with a boom-and-bust pattern 
reflecting its volatile macroeconomic conditions, as we ll as fluctuating commodity prices (Chart I.2).  
Total services trade mirrored that trend, although its contraction and rebound were more modest.  
Merchandise exports grew by some 360% in 2006, largely driven by strong demand for coke and 
semi-coke of coal, but fell back to their 2005 valu e over the following two years before rebounding at 
a more moderate pace.  Apart from a contraction (18%) in 2008, merchandise  imports expanded at a 
nominal average annual rate of 36% on account of widespread shortfalls in domestic production.  
While Zimbabwe's export basket is dominated by pr imary commodities, its major imports are finished 
goods, including machinery and equipment, food, me dicines, and chemicals.  Services exports are 
driven mainly by holiday travel, whereas the main  imported service categories are insurance, freight 
shipment, and other transport.   
-3,000-2,000-1,00001,0002,0003,0004,0005,0006,0007,000
2005 2006 2007 2008 2009 2010Merchandise trade
-300-200-1000100200300400500600
2005 2006 2007 2008 2009 2010Services tradeChart I.2
Trade in goods and services, 2005-10
a            Provisional.
Source :  UNSD, Comtrade database;  and data provided by the Zimbabwean authorities.a aUS$ million
Total imports Total exports Trade balance
 
 
14. Although agricultural goods and manufactures a ccounted for a considerable share of 
Zimbabwe's export earnings in 2005, their respective contributions in 2010 fell behind that of mining 
products (Chart I.3 and Table AI.1).  This compos itional shift reflects the devastating impact of the 
socio-political crisis on domestic production, as we ll as world price developments.  Although power 
cuts and shortages of critical inputs in the cont ext of limited access to credit and foreign currency 
disrupted all economic activities, exports of nickel and gold recovered faster thanks to strong external 
demand. 
 Zimbabwe WT/TPR/S/252 
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Chart I.3
Structure of merchandise trade, 2005 and 2010
2005
(a)  Exports, including re-exports (f.o.b.)
Total:   US$1,393.6million Total:  US$3,252.3million
(b)  Imports (c.i.f.)
Total:   US$2,072.3 million Total:   US$5,714.4 millionPer cent
Source :   UNSD, Comtrade database; and data provided by the Zimbabwean authorities.Agriculture
32.6
Manufactures
34.3
Manufactures
60.6Tobacco, 
SITC 1212
13.2
Ores and 
other 
minerals
15.1Iron and 
steel
13.5Chemicals
1.9Machinery 
and transport 
equipment 
2.0
Food
9.6
Ores and other 
minerals
10.1
Fuels
15.1
Chemicals
7.0Textiles and clothing 1.9
Other semi-
manufactures
6.6Electrical 
machines
4.6Transport 
equipment  6.0
Other primary 
products
28.3Iron and steel
0.4Other 
0.1Other
15.0
Other primary 
products
5.0
Non-electrical 
machinery
5.3Other semi-
manufactures
4.0Other consumer 
goods
10.9
Agric.
12.0 Agriculture
18.5Other food
12.4
Agricultural 
raw 
materials
7.0Manufactures
32.4
Food
18.1
Ores and other 
minerals
2.9
Fuels
15.6
Chemicals
11.5Textiles and 
clothing 1.6
Other semi-
manufactures
6.8Electrical 
machines
7.4Transport 
equipment  
20.3
Other primary 
products
0.4Iron
and steel
1.8Other 
2.0
Non-electrical 
machinery
8.0Mining 
20.0Agriculture
24.4Tobacco, 
SITC 1212
12.7
Ores and 
other 
minerals
30.7Iron and 
steel  6.4Chemicals  
0.7Machinery and 
transport equipment 
1.0Other
10.3
Other primary 
products
2.2Other semi-
manufactures  5.2Other consumer 
goods
19.2Other food
5.4
Agricultural 
raw materials
6.3
Manufactures
32.4
Mining 
32.9
Mining 
53.6Mining 
18.9Agricultural 
raw materials
2.4Agricultural 
raw materials
0.4Other consumer 
goods 3.1Other consumer goods 2.42010a
a              Provisional.  
 WT/TPR/S/252 Trade Policy Review 
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Middle East 
5.8EU27
7.1China
2.4
Asia  
8.3Europe
7.8Other
0.4 Other 
Europe
0.6Chart I.4
Direction of merchandise trade, 2005 and 2010
2005 2010a
(a)    Exports, including re-exports (f.o.b.)
Middle East 1.2
Africa 
58.6Asia 
11.4Europe
11.7Other 
Europe
0.7United 
States
0.9
Total:   US$1,396.6 million Total:  US$3,252.3 million
(b)    Imports (c.i.f.)
EU27
7.0
Mozambique
2.9Zambia
2.1Other Africa 
3.1Other Asia
4.1
Asia
9.7Other 
1.1United States
13.0
Total:   US$2,072.3 million Total:   US$5,714.4 millionPer cent
Other Europe
1.2United States
6.9
Mozambique 
2.8
Middle East
8.4
Source :  UNSD, Comtrade database; and data provided by the Zimbabwean authorities.South Africa
48.9EU27
11.1
Africa
59.4Africa 
76.3EU27
17.0
Africa 
65.2
Botswana
2.4Zambia
5.6
Mozambique 
2.8Middle East
10.4
China
5.6
Other Africa 5.6Zambia 
2.3
South Africa 
54.9
Mozambique
9.9Zambia
40.9South Africa
41.5Other 
1.2
Other Africa 
5.2
Other 
Asia
5.8
Europe
8.3South Africa 
15.0
Botswana
5.0United 
States
1.4Other Africa 8.8
a             ProvisionalOther 
Europe
6.7Asia
8.1China 5.1Other    
Asia 3.0
Europe 
23.6China 
7.3Other 
Asia
4.1Other 
0.4
 Zimbabwe WT/TPR/S/252 
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15. The composition of imports also changed consid erably in 2005-10 (Chart I.3 and Table AI.2). 
The share of manufactures nearly doubled, reaching some 61% of Zimbabwe's total imports in 2010;  
since 2007, machinery and transport equipment has been the most important category.  While the 
overall share of agricultural imports expanded less,  food imports increased substantially.  Mining 
products, particularly non-ferrous metals, registered the largest contraction.  Notwithstanding some 
ebb and flow driven by global price fluctuations, th e share of fuel imports remained close to its 2005 
level. 
16. South Africa remained the main destination for Zimbabwe's merchandise exports throughout 
2005-10;  since 2006, it has also taken Zambia's pla ce as the principal supplier of goods imported into 
Zimbabwe (Chart I.4 and Tables AI.3 and AI.4).  It s relative weight in aggregate Zimbabwean exports 
increased by 13.4 percentage points, while its share of total imports surged by 33.9 percentage points.  
During the same period, shipments to and from the United States followed opposite trends, with the 
former contracting and the latter intensifying to  surpass the EU share of total imports.  The 
comparative importance of the EU as a destinati on market also declined.  Notwithstanding some 
fluctuation, China's relative weight in Zimbabwe's  total exports increased to  7.3% and its share of 
Zimbabwean imports more than doubled, reaching 5.6%. 
17. Zimbabwe is potentially a major investment des tination with a relativel y diversified economy, 
and a highly educated and skilled labour force (lite racy rate of over 90%).  However, inflows of 
foreign direct investment (FDI) into Zimbabwe decr eased considerably in 2005-10 (Table I.3), mainly 
due to the socio-political crisis, insecurity of land te nure, as well as enforcem ent of indigenization and 
empowerment regulations aimed at securing 51% ow nership of businesses worth over US$500,000 to 
indigenous Zimbabweans.  Inefficient public ad ministration, deteriorating infrastructure, and 
restrictive labour regulations may also discourage investors.  While tourism accounted for over 75% 
of FDI approvals in 2005 and 2006, most resour ces have been channelled into mining operations 
thereafter;  manufacturing and other commercial servi ces have also attracted important amounts.  In 
2009, the major investments in Zi mbabwe originated from Mauritius, South Africa, China, and 
Ukraine.  
Table I.3  
Approved investments, 2005-10 
(US$ million) 
2005a 2006a,b 2007 2008 2009 2010 
Total investment 290,557.5  37,478.4  7,774.3 1,713.3 1,346.6 520.5 
Economic activity (%) 
Manufacturing 7.9 8.2 44.2 25.5 3.1 10.2 
Mining 3.7 0.5 32.7 44.0 93.3 35.8 
Agriculture 10.3 10.9 2.1 5.2 0.2 0.4 
Tourism 75.2 79.3 0.1 2.1 1.6 0.1 
Construction 0.1 0.2 0.0 6.0 0.2 49.7 
Commercial (services) 2.4 0.7 20.8 17.2 1.4 3.5 
Transport 0.3 0.2 0.1 0.1 0.05 0.3 
Ownership 
Foreign 19.2 16.9 1.2 1.1 .. 18.2 
Local .. .. 2.1 9.5 .. 0.8 
Joint 80.8 83.1 96.7 89.4 .. 81.0 
.. Not available. 
a Figures converted to US$ at the official exchange rate (annual average). 
b Data available only for the period January-October. 
Source:  WTO Secretariat calculations, based on data provided by the Zimbabwean authorities. WT/TPR/S/252 Trade Policy Review 
Page 10 
  
(4) OUTLOOK  
18. Notwithstanding the encouraging signs of macr oeconomic stabilization, Zimbabwe's economy 
is still in a fragile state with high unemployment a nd depleted international reserves.  Erratic power 
supply and shortage of medium- to  long-term financing are among th e main factors constraining the 
current pace of economic recovery.  Moreover, Zi mbabwe needs financing for the rehabilitation of 
infrastructure and social safety ne ts, and also needs to contain the stretched public sector wage bill. 
19. The authorities expect economic growth to re main strong (between 5% and 10%) over the 
coming five years, underpinned by output recovery in the agriculture and manufacturing sectors, and a 
steady expansion of the mining sector.  However, the precarious political equilibrium, deteriorating 
education and healthcare systems, and uncertainties regarding property rights, including land tenure 
and indigenous ownership, undermine the business environment and make the economic growth 
prospects uncertain.  The economy's vulnerability to external shocks is exacerbated by inflexible 
labour laws and an underdeveloped financial system  with considerable shortcomings in prudential 
regulation and supervision. 
20. In the absence of debt relief, Zimbabwe is proj ected to remain in debt distress over the long 
term.  Prompt implementation of the Government 's plans to re-engage with the international 
community on arrears clearance, new financing, and a comprehensive debt relief programme would 
help to put the economy on a sustainable growth path.