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  IV. TRADE POLICIES AND PRACTICES BY SECTOR 
(1) INTRODUCTION  
1. Zimbabwe considers agriculture (including livest ock and forestry) as one of the engines of 
economic growth necessary for its reconstruction an d poverty reduction.  Since 2000, the sector has 
faced constant decline in both pro duction and productivity, mainly due to the Fast Track Land Reform 
Programme, erratic weather, limited access to finan ce (local and offshore), energy (electricity and 
fuel) problems, infrastructure bottlenecks, producer and food price controls, and large-scale underutilization of land.  Lack of security of tenure has negatively affected investment in the sector.  
The Government intends to revive all the agricu lture subsectors including maize, wheat, tobacco, 
cotton, coffee, sugar, beef, horticulture, and flor iculture.  Agricultural activities remain heavily 
protected and supported, including through high tari ffs, a price band system, and other government 
incentives such as export finance, insurance, guarantees and other related trade finances facilities.  
2. Mining has been a preferred sector for foreign investment in Zimbabwe;  it is making only a 
marginal contribution to growth despite its immense potential.  The policy objectives are, inter alia , to 
sustain development of the country's mineral resources and to create employment opportunities by profitably exploiting Zimbabwe's  natural resources for its socio-economic development.  
Environmental issues in mineral exploitation, as well as indigenization and empowerment issues, are 
given due attention at project inception and develo pment stages.  The mining sector continues to 
benefit from incentives provided under the different  trade and investment regimes.  However, 
increasing government control, and lack of clar ity over the mining royalt y and tax regimes badly 
affected the sector. 
3. By African standards, Zimbabwe's manufacturing sector is relatively large and 
well-diversified.  It has had strong direct linkages with the agriculture sector to which it supplies 50% 
of its output in the form of fertilizers, feed-sto ck and insecticides, while obtaining 63% of its input 
from agriculture.  The manufacturing sector also provides inputs and consumer goods to mining industries and does process minerals.  The sector has struggled in line with the decline in economic 
activities over the past ten years, losing almost 50% of its output.  It faces international 
competitiveness challenges due to high production co sts related to very old plant and equipment, 
unreliable utility supplies, including energy (elect ricity, water, fuel, and coal), exorbitant utility 
tariffs, lack of working capital, and distortions ar ising from price controls and hyperinflation.  In 
addition to tariffs and import surcharges, other tr ade policy measures affecting the sector include the 
duty drawback and inward processing rebate sch emes, import and export licensing, end-use tariff 
concessions on various imported inputs, and capital goods surcharge suspensions. 
4. Zimbabwe is a net services importer.  Trav el (tourism) has dominated services exports, 
illustrating the country's importance as a tourist a ttraction, while transportation has been the main 
services import, reflecting long distances from key markets.  More efficient services delivery is a 
government priority; however, state intervention remains significant, rendering the supply of key 
services inefficient and costly.  Companies suppl ying services are subject to several taxes and 
controls.  Zimbabwe's specific commitments unde r GATS are limited and cover only three sectors:  
financial services (insurance and insurance-related services, and banking and other financial services);  
tourism;  and telecommunication services.  The schedule includes some horizontal restrictions on 
market access applying to all three sectors.  Zimb abwe did not participate in  the extended negotiations 
on basic telecommunications or financial services nor has it otherwise upgraded its GATS commitments in any sector. Zimbabwe WT/TPR/S/252 
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  (2) AGRICULTURE , LIVESTOCK , AND FORESTRY  
(i) Overview 
5. Agriculture is an important sector for the Zimbabwean economy (Chapter I).  The sector 
generates approximately 18.5% of GDP, and 40% of total export earnings through the export of 
tobacco, cotton, and horticultural produce, among ot hers;  it employs 66% of the country's labour 
force (the majority being women);  and accounts for about 70% of all raw materials for industry.  The 
main agricultural products are maize (Zimbabwe's staple food), cotton, tobacco, wheat, coffee, 
sugarcane, tea, peanuts, millet, soybeans, hortic ulture, floriculture, cattle, sheep, pigs, and goats.1  
6. Zimbabwe has a huge agricultural potential with natural resources and a climate that favours a 
variety of farming systems (Table IV.1 ).  Located in the southern part of the African continent, it has 
a total area of 39.7 million hectares;  of which 33. 3 million is designated to be agricultural land and 
about 6.4 million hectares is under urba n settlements, parks, and forestry.  
7. The country is divided into five agri-ecol ogical zones known as natural regions (NRs) which 
relate to climate, soils, and to appropriate farming systems.  Natural Region I has the highest rainfall, 
and intensive agriculture is practiced;  the level of  intensity of both rainfall and agricultural activity 
reduces with the change from Natural Region I to V (Table IV.1).   
Table IV.1 
Characteristics of Zimbabwe's natural regions 
Natural 
region Average annual 
rainfall (mm) Area 
(km2) Area 
% Farming systems 
I >900 7,000 2 Intensive livestock and crop production 
II 750-900 58,600 15 Intensive grain production supported by livestock production 
III 650-800 72,900  18 Semi-extensive livestock production and some drought resistant crops 
and small scale ranching 
IV 450-650 147,800 38 Semi-extensive livestock  production and some drought resistant crops 
V 300-450 104,400 27 Extensive beef production and ranching in commercial areas. Mixed 
farming and maize in communal areas 
Source: Ministry of Agriculture, Mechaniza tion and Irrigation Development (2011), Agriculture Sector Overview . 
8. Since 2000, the agriculture sector has faced  constant decline in both production and 
productivity.  The decline affected almost all agricultural products pushing Zimbabwe, formerly the 
largest net food exporter within the region, to im port food.  For instance, total maize and wheat 
declined respectively from their peaks of 2,057,000 tonnes and 263,000 in 1996 to 1,300,000 tonnes 
and 20,000 tonnes by 2010, far below the national requirements (1,800,000 tonnes of maize).  While 
the share of agriculture in GDP was about 22% in 2001, it fell to about 10% in 2008.  However, it has since increased, to a current average of 18.5% of  GDP.  The performance of major cereal and food 
security crops, as well as major cash crops, followe d the same trend as illustrated in Table IV.2. 
9. In the 2009-10 season, the average maize yiel d was 0.7 tonnes per hectare, down from an 
average of 1-1.4 tonnes per hectare in the 1980s a nd 90s;  while wheat yields declined drastically 
from the peak of 5.4 tonnes per hectare in the 1990s to 2.32 tonnes per hectare in 2009.  Oilseed crops 
such as soybeans, groundnuts, dry field beans and co wpeas have grown in recent years, attributed to 
an expansion of area grown, driven by re asonable returns and low cash input demands.  
                                                      
1 Ministry of Agriculture, Mechanization and Irrigation Development  (2009). WT/TPR/S/252 Trade Policy Review 
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  Table IV.2 
Production of food security and cash crops, 1996-2010 
('000 tonnes) 
Crop 1996 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 
Maize 2,065 1,195 1,545 1,476 605 1,059 1,400 750 1,485 953 575 1,240 1,300 
Wheat 263 242 229.8 197.5 195 122 247 229 241 149 34 48 20 
Soya bean 97 116 99 175.1 84 41 86 50 70 102 48 115 70 
Sorghum 90 39 84 59.7 22 71 129 162 101 76 75 181 132 
Sunflower 28 142 18 31.5 5 17 20 14 20.8 25.7 5 39 14 
Groundnuts 68 46 114 171.8 59 141 150 150 83 125 131 216 186 
Tobacco .. 226 198 208 173 94 68  74 55 80 56 59 122 
Cotton .. 274 304 282 190 228 333 198 260 235 226 211 281 
Horticulture .. 54 64 78 82 75 57 60 64 66 60 35 43 
.. Not available. 
Note: 2010 figures for wheat and fo r horticulture are estimates. 
Source:  WTO Secretariat, based on inform ation from ZIMSTAT and MAMID.  
10. The contraction observed in the agriculture sector was mainly due to the land reform 
programme2, erratic weather, limited access to finan ce (local and offshore financing), energy 
(electricity and fuel) supply availability and accessibility, infrastructure bottlenecks, control of 
producer and food prices, and large-scale underutilizati on of land.  Unclear and lack of security of 
tenure have negatively affected investment in the sector.   
11. The land redistribution in Zimbabwe resulted in  the emergence of two types of smallholder 
farmers, A1 and A2 farmers, based on size of la ndholding.  In both these farming communities, unlike 
the traditional communal holdings, unclear tenure and lack of track record in farming have created 
barriers to private-sector credit provision.3  
12. The World Bank has estimated that the land re form programme is responsible for a 30% 
decline in agricultural output.  A report issued by the Bank noted that "Zimbabwe has moved from 
being a  food surplus (and in some years an exporting na tion) to a food defic it and importing country, 
with up to a third of the population depending on food aid.4  According to the UN, Zimbabwe's 
economy has gone into free-fall since the Government launched its fast track land reform programme 
in 2000.5  
13. Most smallholding farmers, who have become the prime producers in Zimbabwe, have a low 
propensity to save, owing to the difficult economic s ituation in the country;  therefore, they require 
credit to kick-start their operations.  Government  support through the Central Bank and the AgriBank 
has been inadequate for financing long-term farm capital requirements;  also, it has generally fallen 
short of financing farm current  expenditures, which are the pr ime movers for raising farm 
productivity.  New farmers are therefore faced with the problem of accessing adequate financing.  
                                                      
2 The controversial land reform programme has driven most of the few white farmers out of the country 
and allocated much of their land to black Zimbabweans. 
3 Mudimu (2003). 
4 World Bank (2009). 
5 United Nations Regional Information Networks (2006). Zimbabwe WT/TPR/S/252 
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  Lack of inputs, working capital, and of experi ence to start long-term productive programmes are 
among the main constraints.6 
14. Zimbabwe has a dualistic agriculture sector with fairly large-scale developed commercial 
farms, and mixed crop farming combined with sm all-scale livestock breeding (cattle, goats, sheep, 
pigs, and poultry), generally sma ll family holdings of one to two hectares (Table IV.3).   
15. The land tenure system has been the source of political conflict since colonization (when the 
country was known as Rhodesia,) both within indi genous black communities and especially between 
white settlers and the black rural communities.  At Independence in 1980, over 15 million hectares 
were under large-scale commercial farming, comprising around 6,000 farmers, nearly all white.  This 
had fallen to around 12 million hectares by 2000, due in part to the land reform and resettlement 
programme, largely funded by the British Govern ment.  The Fast Track Land Reform Programme, 
which began in 2000, allocated to new farmers over 4,500 farms, making up 7.6 million hectares, 20% 
of the total land area of the country.  This repr esents over 145,000 farm households in A1 schemes 
and around 16,500 further households occupying A2 plots (Table IV.3).7 
Table IV.3 
National distribution of land, 1980, 2000, and 2010 
Land category  1980 
Area (million ha)  2000 
Area (million ha)  2010 
Area (million ha)  
Communal areas  16.4 16.4 16.4 
Old resettlement  0.0 3.5 3.5 
New resettlement: A1  0.0 0.0 4.1 
New resettlement: A2  0.0 0.0 3.5 
Small-scale commercial farms  1.4 1.4 1.4 
Large-scale commercial farms  15.5 11.7 3.4 
State farms  0.5 0.7 0.7 
Urban land  0.2 0.3 0.3 
National parks and forest land  5.1 5.1 5.1 
Unallocated land  0.0 0.0 0.7 
Source:  Ian Scoones (2009), Zimbabwe's land reform: challenging the myths .  Viewed at:  
http://www.thezimbabwean.co.uk/index.php?option= com_content&view=artic le&id=34979:zimbabwes-land-
reform-challenging-the-myths&ca tid=72:thursday-issue&q=scoones . 
16. Growth in the agriculture sector has been far below the Government's expectations, and food 
production has not met the needs of the growing population.  Annual growth in the gross agricultural 
product has been of 2.5% on average, less than the government forecast of 3.2% during the early 
years of independence.8  Government support to agriculture has been limited and declined, especially 
during the last decade.9 
17. Since 1995, there has been a steady but steep dec line in the value of agricultural exports, and 
agricultural imports have been growing rapidly.  The country has now resorted to food imports, 
including food aid, in order to meet domestic requi rements for primary food.  This trend has resulted 
in a negative agricultural trade balance, and agricu lture's role as a source of foreign exchange has 
                                                      
6 Muziri (2009). 
7 Scoones (2009). 
8 SADC Secretariat (2008). 
9 FAO (2010). WT/TPR/S/252 Trade Policy Review 
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  significantly weakened.  The Government set a ne w agricultural policy framework in 1995 and there 
have been numerous policy statements over the last decade to address this situation.10 
(ii) Agricultural policy 
18. The Ministry of Agriculture, Mechaniza tion and Irrigation Development (MAMID) is 
responsible for the formulation and implementati on of agricultural policy.  A number of other 
departments are also involved in the sector:  the Ministry in charge of Rural Development, the 
Ministry of Industry and Commerce (for trade regulations), the Ministry of Finance (for taxation), the Ministry in charge of Economy (for price setting), th e Ministry in charge of Health (for sanitary and 
phytosanitary issues), the Ministry in charge of E nvironment;  and certain services are attached to the 
Office of the President.  The large number of in stitutions involved in agricultural policy undermines 
the effectiveness of State action, due to the numerous  jurisdictional disputes and substantial additional 
costs.  The authorities indicate that the ins titutions hold weekly consultation meetings.   
19. The agriculture sector is facing enormous cha llenges and constraints, including:  continued 
disruptions to agricultural activities as a result of c onflicts between former fa rm owners and allocated 
beneficiaries holding offer letters;  lack of inv estor confidence in the sector;  poor infrastructure 
(roads, rail and irrigation);  failure by financial institutions to recognize existing tenure systems;  
inadequate financial support for the agrarian reform s;  lack of extensive programmes to enable new 
farmers to be trained and acquire business skills;  inadequate capacity to undertake research and 
extension services, especially for A1, A2 and communal farmers;  poorly functioning markets due to 
capital constraints and inadequate infrastructure;  gender inequalities in access to and control over 
resources;  a high prevalence of HIV/AIDS, which compromises the quality of labour;  erratic weather 
(susceptibility to droughts);  unaffordable inputs;  and low capitalization levels. 
20. The Government intends to revive all the ag riculture subsectors including maize, wheat, 
tobacco, cotton, coffee, sugar, beef, horticulture, and floriculture.  This is meant to ensure maximum 
use of arable land and enhance agricultural productiv ity and competitiveness with a view to increasing 
food production;  creating employment in the sect or;  and establishing a reliable supply source of 
inputs into the manufacturing sector in support of th e envisaged export-led economic growth strategy.  
21. According to the authorities, focus will be  on enhancing agricultural mechanization and 
productivity;  financial sector suppor t for farmers and contract farming;   targeted financial support for 
vulnerable farmers;  pricing and marketing arrangements for agricultural commodities;  development 
strategies for critical subsectors such as livestock,  dairy, and coffee production;  irrigation and 
infrastructure development;  training, research, and extension services;  and security of tenure and 
land utilization.  
22. A credible security of tenure policy is essentia l in order to build confidence and attract 
investment in land, as well as to facilitate agricu ltural financing.  A recovery programme for the 
sector has been drawn up by the Government with th e participation of various development partners.  
The objective is to equal and then exceed the pr e-crisis (2000-09) level of production.  The low 
production affects food security, and contributes to ma lnutrition, shortage of high-quality seed, rising 
prices, and failure to revitalize the processing and preservation of agricultural and fishery products.
11 
                                                      
10 Zimbabwe has never had a clearly articulated policy on agriculture or on food security until 2002, 
when it presented the Zimbabwe Food Security and Strategy at the FAO World Food Summit (see Madumu, 
2009). 
11 Government of Zimbabwe, "A Development Framework for Co-operation 2011-2015". Zimbabwe WT/TPR/S/252 
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  23. The Government promulgated a new grain mark eting policy, through Statutory Instrument 
No. 235A of 16 July 2001, intended to addr ess maize shortages and build up stocks.12  The instrument 
stipulated that maize, wheat, and their milled pr oducts were "controlled commodities" of which the 
Grain Marketing Board (GMB) was the sole buyer and seller.  These grain marketing controls and 
fixed prices combined with delayed payments by th e GMB in a highly inflationary environment have 
severely reduced the earnings and motivations of grain producers. 
24. Cash crops have experienced low returns as a result of overvaluation of the Zimbabwean 
dollar, as well as an export tax on oilseeds.  Famers were seriously hit because their profitability did 
not depend on market forces, but on the prices set by the Government, which were always lower than 
the real costs of production.13  However, market reforms in Febr uary 2009 were tailored to address 
these issues.  GMB's monopoly power has been relaxed,  but it has remained the buyer of last resort. 
25. Marketing boards have been in place since th e early 1930s and, for many products, have 
exercised tight control over marketing, domestic pr ices, and the provision of inputs.  However, the 
marketing boards are being commercialized;  privat e sector firms are being introduced into activities 
formerly reserved for marketing boards, thus increasing competition and enhancing efficiency. 
26. The Government recognizes the negative effects of  controls on the pricing and trading of 
agricultural commodities and as such established the Commodity Exchange in Zimbabwe (COMEZ) 
to allow market-based trading of agricultural comm odities in order to eliminate market and price 
distortions, thereby restoring the viability of farmers to grow a broad range of commodities.  The COMEZ aims to open up the agricultural commodities' market to ensure that agricultural produce has 
a ready and transparent market, with both producer s and consumers getting best possible prices based 
on prevailing international market prices.  The COM EZ also aims to facilitate prompt payments with 
forward contracts available for some produce.  Fu rthermore, the Agricultural Marketing Authority 
was resuscitated in 2009 to regulate trade in agricultural commodities. 
27. Agriculture is Zimbabwe's most protected sect or.  The average applied tariff on agricultural 
products (WTO definition) is 25. 1% (down from 27.5% in 2007), wh ereas the corresponding average 
for non-agricultural products is 13.9% (down from 15.9% in 2007) (Table AIII.3).  Using the ISIC 
definition, the simple average applied MFN tariffs ar e:  17.3% for agriculture (livestock, forestry, and 
fisheries included) with high tariff dispersion from 0 to 160% (Table AIV.1).  Agricultural imports are 
also subject to a multitude of other levies and tax es, to which should be added the cost of import 
formalities (Chapter III(2)).  All this tends to en courage fraud, which reduces the level of protection 
that the authorities believe they are providing to domestic producers. 
28. Imports and exports of agricultural inputs such as  fertilizers, farm feeds or remedies require 
permits from the Ministry of Agriculture, Mechanis ation and Irrigation Development.  No pesticide 
may be imported into Zimbabwe, either for private use or for resale, unless it is registered with the 
Department of Research and Specialist Services (F ertilizers, Farm Feeds, and Remedies Institute).  
Export of fertilizers is only allowed when produc tion exceeds national requirements.  Production, 
import, export, packaging, storage, and distribution of fertilizer are jointly regulated by the ministries 
responsible for agriculture, trade, the environment and health.  However, imported agricultural inputs 
and equipment, though subject to a relatively low tari ff rate of 3.9% on average, are also subject to 
several other levies and taxes (Chapter III(2)), which may discourage their use. 
                                                      
12 Muziri (2009). 
13 ZCBC, EFZ, and ZCC (2006). WT/TPR/S/252 Trade Policy Review 
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  29. During the review period, import duties where reduced on certain poultry feeds, livestock for 
breeding, and for other products used in agricultu re such as beverage input s (malt and hops), motor 
vehicles, and some medical equipment, landscaping equipment, electricity generators, and packaging 
material.  They were eliminated on devices powered  by solar energy and on energy saving bulbs.  
Furthermore, a suspension of customs duties on basic commodities was introduced in 2009 and 
subsequently extended with some modifications to the list of covered products.  The Government also 
provided targeted support to the agriculture sector that amounted to US$122.2 million as at 30 September 2010.
14  
30. Zimbabwe grants tariff preferences in the cont ext of bilateral and regional trade agreements 
(Chapters II and III).  Aggregate preferential agricu ltural imports accounted for a quarter (25.4%) of 
its total agricultural imports in 2010.  While the simple average MFN tariff rate for agriculture 
products (WTO definition) in Zimbabwe is 25.1%, simple average rates for Zimbabwe's preferential 
partners range from 0.3% (SADC excluding South A frica) to 14.3% (South Africa) (Table III.5).   
31. According to the authorities, in order to a ddress the critical national food shortages during 
2000-10, the Government has been running progra mmes under which farmers may access subsidized 
inputs.  Farmers receive a variety of subsidies from the Government, in the form of seeds, fertilizers, 
herbicides, fuel, equipment, and agricultural loans,  to grow targeted crops such as maize and wheat.  
The programme is mainly targeted at model A1 and communal farmers. 
32. A Mechanization Programme, launched in 2007, w as conceived as part of the core measures 
to revitalize and recapitalize the agriculture sector in  the long-term, and consolidate the gains of the 
land reform programme.  As a strategic nationa l developmental programme, it has significantly 
transformed the equipment and productive landscap e of the sector by mechanizing both communal 
and commercial farmers.  Thousands of tractor drawn and animal drawn implements have been 
distributed to thousands of beneficiaries across the co untry to enable them to produce at optimal levels 
and contribute to achieving food security and sustenance.  The Mechanization Programme is part of 
ongoing efforts to anchor lasting productivity in agriculture in order to promote food security. 
33. The Agricultural Sector Productivity Enha ncement Facility (ASPEF), launched by the 
Government in 2007 and implemented by the Reserve  Bank of Zimbabwe, supported projects, such as 
livestock production, with a particular emphasis on rebuilding the national herd;  the winter wheat 
programme; and food crop production to enhance food secu rity.  As one of the methods for rebuilding 
the national herd, the Government undertook a cattle  purchasing programme.  The main objective of 
ASPEF is to increase the national cattle herd by 2.1 million animals within three to five years.15 
34. The state-owned Agricultural Bank of Zimbab we (Agribank), a de posit-taking financial 
institution, is the Government's primary vehicle fo r channelling financial res ources to the agricultural 
sector.16  It operates under the Banking Act and is subj ect to supervision by the Reserve Bank of 
Zimbabwe (RBZ).  In its agricultural lending operati ons, Agribank charges interest to at least break 
even;  interest rates are normally prescribed by th e Government or the RBZ.  However, according to 
the authorities, rates are not prescribed, but the Government reserves the right to prescribe lending 
rates on specialized facilities in order to achieve  their intended objectives and when they are in 
agreement with the lending institution.  Eligibilit y requirements for Agribank loans include a national 
identification;  a letter from a farmers union;  proof of land ownership, allocation, lease or permit;  
                                                      
14 Ministry of Finance (2011), p. 24. 
15 Reserve Bank of Zimbabwe (2008). 
16 Besides lending to farmers, which is its core act ivity, Agribank has corpor ate, treasury, and retail 
banking operations throughout Zimbabwe;  it also offers advisory services. Zimbabwe WT/TPR/S/252 
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  record of proof of production, and crop prod uction and sale estimates;  and a recommendation from 
the Department of Agricultural Research and Exte nsion Services, the Department of Veterinary 
Services or farming organizations. 
35. Agricultural exports receive government s upport and incentives including export finance, 
insurance, guarantees, and other related trade fi nance facilities.  Export promotion and marketing 
assistance have also been provided (Chapter III(2) and (3)). 
36. Zimbabwe plans to maintain, inter alia , import and export permit requirements on some 
agricultural commodities for food security, sanitary a nd phytosanitary, and statistical reasons.  The 
country is open to managed food-aid programme s to improve food security.  It receives public 
budgets and emergency aid, and food aid under pr ogrammes or under nutritional support projects. 
37. There is considerable potential for growth of agricultural and forestry production in 
Zimbabwe.  The country has exce llent comparative advantages for producing several commercial 
crops in its various provinces, which offer agri cultural and climatic c onditions and soils highly 
favourable for their cultivation.  However, the deve lopment of the agriculture sector will mainly 
depend on reforms to be introduced to generally  improve the business climate and attract private 
investment.  It will take time to address the sector's  challenges and structural constraints.  In the short 
to medium term, the competitiveness of the sector could be improved and promoted by:  (i) increasing 
productivity in all sectors and strengthening input an d product markets;  (ii) widening opportunities 
for new strategic choices that lead to modernizati on and commercialization of agriculture across all 
subsectors;  (iii) reducing or eliminating all tax es on imported agricultural inputs and equipment and 
on agricultural exports;  and (iv) rationalizing expor t formalities in order to minimize the number of 
levies and the formality-related delays they intro duce.  These measures would involve only minor loss 
of revenue for the State and would significantly reduce fraud.  Their net fiscal effect could prove to be 
positive. 
(iii) Policy by subsector 
(a) Livestock and animal products 
38. Livestock remains the most important categor y of agricultural production in Zimbabwe 
contributing 15% to 25%  of the total value of agricultural output.  Sales of livestock and livestock 
products are an important source of farm income a nd make a valuable contribution to foreign currency 
earnings for the country. 
39. Cattle, sheep, and goat farming is extensive, a nd takes place on the pasture land in the arid 
and semi-arid areas;  the intensive dairy, poultry, an d pork production is in the arable areas, generally 
closer to the major metropolitan markets (Table IV.1 ).  Parallel to the two systems, there is the 
traditional free-range method characterized by low yields  and involving migratory herding.  It is used 
primarily to raise smaller animals, such as goats, sheep, and pigs, for their meat, which is mainly 
reserved for own consumption or sold on urban markets. 
40. The main livestock species are cattle, goats, sheep , pigs, and poultry.  Farmed ostrich and 
crocodiles and fish are gaining in significance and contribute to national export earnings.  Products of 
animal origin, mainly destined for the domestic market, consist of bovine animals, goats, and sheep, 
together with poultry, milk, and eggs.  Overall, the livestock sector, like the rest of agriculture has not 
escaped the downward trend.  The commercial herd decreased from 1,315,000 in 2000 to 651,436 in 
2006 after having bottomed out at 353,505 head in 2002 (Table IV.4).   WT/TPR/S/252 Trade Policy Review 
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  Table IV.4 
Cattle trends, 1991-2006  
Year Commercial herd Communal herd Total 
1991 1,714,000 4,271,000 5,985,000 
1992 1,642,000 3,805,000 5,447,000 
1993 1,451,000 3,426,000 4,877,000 
1994 1,383,000 3,918,000 5,301,000 
1995 1,331,000 3,380,000 4,711,000 
1996 1,323,293 4,176,707 5,500,000 
1997 1,313,428 3,676,572 4,990,000 
1998 1,211,545 3,565,725 4,777,000 
1999 1,340,000 4,312,000 5,652,000 
2000 1,315,000 4,592,000 5,908,000 
2001 1,300,000 5,118,000 6,418,000 
2002 353,505 4,441,000 5,240,694 
2003 360,000 4,936,000 5,296,000 
2004 432,813 4,793,706 5,226,519 
2005 519,028 4,668,585 5,187,613 
2006 651,436 4,334,882 4,986,318 
Source:  WTO Secretariat, based on informa tion provided by the authorities. 
41. In the 1990s, the sector was driven mainly by large-scale commercial farming, which 
dominated the production of formally marketed liv estock and livestock products.  However, most 
livestock is now owned by small-scale farmers (90% of cattle, 98% of goats, and 80% of pigs).  The 
cattle population is currently 5 million, almost a 20% reduction of the figure (5.9  million) in 2000.  Of 
the 5 million cattle, 235,946 are found  in A2 farms and large-scale commercial farms, compared to 
1.3 million cattle in commercial farms in 1999.  O ff-take from the former commercial sector, which 
used to be about 20%, has also declined.  Da iry production has declined from above 100,000 dairy 
cows in 2000 to about 22,000 dairy cows in 2010 (Table IV.5). 
Table IV.5 
Livestock population, 2009 
 Cattle Sheep Goats Pigs 
A1 423,203 47,351 280,336 14,607 
A2 214,250 24,559 99,049 31,228 
Commercial 21,699 688 884 19 
Communal 3,688,440 291,550 2,556,266 140,025 
Resettlement 588,199 23,080 164,707 9,058 
Small scale 170,882 10,572 69,291 7,297 
Grand total 5,106,673 397,800 3,170,533 202,234 
Source:  WTO Secretariat, based on informa tion provided by the authorities. 
42. Pig farming is being developed.  The local mark et continues to be supplied chiefly by small 
family farms.  Poultry production, on the other ha nd, is organized;  as well as individual farmers, it 
includes large units for the production of one-day chic ks and fertilized eggs fo r the producing farms.  
Units for manufacturing poultry and pig feed have also been developed. 
43. According to the authorities, the main probl ems facing poultry production are the high price 
of inputs and competing cheap imports.  Despite an  average tariff rate of 40% (HS 02: Meat and Zimbabwe WT/TPR/S/252 
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  edible meat offal, including meat of poultry an d poultry, frozen) and a multitude of other levies and 
taxes as well as various controls and associated cost s (Chapter III(2)), imported frozen poultry is sold 
at one quarter of the price of live birds on the local markets. 
44. Other constraints on the development of livest ock production include the shortcomings of 
technical support services for livestock breeders, includi ng veterinary care and balanced feeding;  the 
poor state of the production plant and basic infrastru cture;  and the cost of getting products to the 
market.  This partly explains the differen ce in prices between local products and imports. 
45. Under the Development Framework for C ooperation for Livestock production, the 
Government intends to focus on beef, dairy, and small-stock subsectors.17 
46. To rebuild the nation's herd, the Government intends to facilitate increased productivity 
through genetic improvements, wh ich include preservation and multiplication of pedigree herds and 
provision of access to artificial insemination services in smallholder areas;  increasing funding for 
research in livestock husbandry in order to improve  conception and birth rates and reduce the age at 
first breeding;  research on animal nutrition in  collaboration with faculties of agriculture in 
universities.   
47. Zimbabwe aims to increase milk production by  increasing the dairy herd through dairy cattle 
multiplication centres in all the provinces, trai ning farmers on dairy management, and expanding 
breeding centres.  In the meantime , an increase in average milk production per cow will be supported 
through improved availability of high quality feed  stock via the creation of fodder banks, promotion 
of irrigated pastures, and improved pasture and ra ngeland management.  The Government intends to 
improve dairy herd health by ensuring availab ility of animal vaccines and drugs, improved animal 
movement control, and improved field and diagnostic veterinary services. 
48. The national herd, characterized by a low off-take and a low fertility rate, is mostly owned by 
smallholders.  Accordingly, improving animal hea lth condition and nutrition in the subsector has the 
potential to increase beef production.  Zimbabwe  has developed capacity for production of stock 
feeds, together with expertise in beef production,  and internationally accepted abattoirs for processing 
beef for export.  
(b) Cash crops 
49. Until the last decade, Zimbabwe's  main cash crops included tobacco, cotton, coffee and sugar, 
which were a significant source of export earnings and employment. 
Tobacco 
50. Zimbabwe is renowned for quality, mature flavour ed flue-cured tobacco, and is one of the 
three sources of this type of tobacco in the worl d.  The tobacco industry has traditionally been the 
country's major foreign currency earner, accounting fo r more than 30% of foreign exchange earnings 
and almost 12% of GDP at its peak.18 
51. The production pattern of the crops  has undergone significant changes in recent years, with a 
shift from large-scale commercial operations to sm allholding.  Before 2000, 95% of the crop was 
                                                      
17 Government of Zimbabwe (2009), p. 108. 
18 Ministry of Agriculture, Mechanization and Irrigation Development (2010). WT/TPR/S/252 Trade Policy Review 
Page 72 
  
  grown by large-scale commercial farmers on lands averaging 40 hectares.  Currently 75% of 
production comes from indigenous farmers, and production units average 2 hectares.19 
52. Production of tobacco initially declined in the early 1980s, but the trend was reversed in the 
late 1980s, when production averaged 120 million kg a nnually from an average of 57,000 hectares.  
Production peaked in 2000, at 236 million kg and earning Zimbabwe over US$400 million.  However, 
from 2001, coinciding with the land reform programme, tobacco production fell, primarily due to lack 
and late availability of cropping  inputs, droughts, labour shorta ges, and grower inexperience. 
53. The tobacco subsector has wide scope for expans ion:  the installed production infrastructure 
can handle up to 150 million kg of tobacco;  and full rehabilitation of the existing farm infrastructure 
would increase capacity to over 250 million kg.  Four tobacco processing plants in the country have a capacity to handle more than 300 m illion kg of flue-cured and burley. 
54. Furthermore, several institutions and private sector and primary contractors, provide 
extension services to the farmers and carry out resear ch to improve both the quality and productivity 
of tobacco.
20  Double arrangements, initiated in 2004, to  provide farmers with critical inputs and 
extension services, present an opportunity for an accelerated rebound of the tobacco sector. 
55. The MFN import tariff rates on tobacco (HS chapter 24) average 65.7%, ranging from 10% to 
160% (Table AIII.3).  In addition to customs duty,  imports of tobacco and tobacco products are 
subject to a multitude of other levies and taxes, to gether with multiple controls and the associated 
costs (Chapter III(2)).  These measures, combined with other structural problems, hamper the 
international competitiveness of the sector. 
Cotton 
56. Cotton has been grown in rural provinces of Zi mbabwe (natural regions IIb and III) for more 
than 50 years, mainly by about 300,000 small holder communal farmers.  Employing over 1 million people, the subsector has traditionally been second to  tobacco in terms of agriculture sector export 
earnings.  
57. Cotton has been heavily protect ed by the Cotton Marketing Board (CMB), which exercised 
tight control over production, marketing, pro cessing, and trade until 1994.  The subsector was 
liberalized in 1994.  In 2010, there were over 25 companies involved in contract growing, buying, and ginning of seed cotton.  
58. Despite the crisis in Zimbabwe, communal farmi ng of cotton has been sustained by contract 
production schemes that have boosted input provisi on.  The Government intends to continue to 
support these schemes by creating an environment that  allows smallholder producers to benefit from 
contractual arrangements; and by promoting continuous improvement s of the crop through research 
and effective extension services in order to increase av erage yields per hectare.  Zimbabwe plans to:  
reduce the tax on cotton lint;  enforce various polic y instruments, including those relating to cotton 
pest control, improving farming methods, and increasi ng yield, and broadening value addition at the 
local level;  and improve rural roads to increase access to markets and reduce transportation costs.
21 
                                                      
19 Ministry of Agriculture, Mechanization and Irrigation Development (2010). 
20 Farmers Development Trust (FDT), Agricultural Technical and Extension Services (AGRITEX), 
Tobacco Research Board (TRB), Tobacco  Industry and Marketing Board (TIMB). 
21 Government of Zimbabwe (2009), p. 107. Zimbabwe WT/TPR/S/252 
 Page 73 
 
 
  59. The average tariff on cotton (HS Chapter 52) is 13.4%, down from 19.5% in 1994, with rates 
ranging from zero to 20%.  Cotton lint imports and e xports are subject to permit, and other levies and 
taxes (Chapter III(2) and Table AIII.3). 
60. The authorities believe that Zimbabwe is harm ed by the continuing subsidization by some 
countries of cotton lint and seed exports, and calls fo r a successful conclusion of the Doha round to 
address this issue.   
Coffee 
61. More than 80% of Zimbabwe's Arabica co ffee is grown and produced in the Eastern 
Highlands (Honde Valley, Mutare, Chipinge, and Chimanimani) and the remainder in parts of 
Mashonaland West Province.  The country is a very  small producer and exports over 98% mainly to 
the United States, United Kingdom, Japan, Spain, Switzerland, South Africa, Belgium, and Germany.  
Coffee production did not escape the downward tre nd associated with the economic and political 
crisis in Zimbabwe.  As for mo st agricultural products, coffee production fell, from 11,500 tonnes in 
1996 to 4,500 tonnes in 2006.  
62. The coffee industry comprises large- and small-sc ale growers.  Large-scale growers are either 
large corporate estates or individually owned medium -sized farms.  They are capital-intensive, enjoy 
economies of scale, use hired labour, and have strong links to the global market.  Smallholder farmers 
started producing coffee in the early 1980s, just af ter independence.  They do not have their own 
means of transport or storage fac ilities, and deliver the partly process ed bean to millers, such as the 
Grain Marketing Board, Zimbabwe Coffee Mill,  and Honde Valley Smal lholder Development 
Company.22   
63. Apart from the volatility of coffee prices on the world market, the sector faces a number of 
challenges, including viability problems for the sma llholder farmers;  erratic weather conditions;  
shortages of critical inputs;  and absence of pest and disease control. 
64. The Government has adopted strategies to in crease coffee production, including:  putting in 
place reliable and efficient input support schemes;  encouraging the aggregation of coffee plots into 
large units, which will be managed jointly;  local  value addition;  rehabilitation of irrigation and 
processing infrastructure;  training in best co ffee husbandry practices a nd post-harvest handling 
processes. 
65. Imports of unprocessed coffee, other than seeds, are subject to an average tariff rate of 40% 
(HS 09.01).  In addition to tariffs, imported coffee is subject to various other levies, taxes, and 
controls along with their associated costs (Cha pter III(2)).  These measures are discouraging the 
development of coffee processing in Zimbabwe. 
66. Zimbabwe is a contracting member of the In ternational Coffee Organization (ICO).  It has 
benefitted from coffee developmental projects, jo intly initiated by ICO and the Common Fund for 
Commodities (CFC), and wholly funded by the CFC. 
                                                      
22 Zimbabwe Coffee Mill (ZCM) is a farmer-owned  coffee processing and marketing organization 
located in Mutare. WT/TPR/S/252 Trade Policy Review 
Page 74 
  
  (c) Food products 
67. Foodstuff production in Zimbabwe, previously known as the "Breadbasket of Southern 
Africa", has fluctuated in the last 20 years and h as been below subsistence levels since 2000.  The 
main staple food products are maize and wheat.  In  2008, the annual national requirement for maize 
was about 1.8 million tonnes:  1.5 million tonnes for human consumption and 0.3 million tonnes for 
livestock.  By area and number of growers, mai ze production is the most dominant agricultural 
activity, produced on over 1.5 million hectares annua lly.  According to official statistics, food 
production has grown at a slower rate than the increase in the population, which has resulted in a 
worsening of food insecurity, particularly in urban areas, despite a consider able increase in food 
imports (including rice, maize, and wheat) in the last decade.   
68. Production of maize and wheat declined during th e last decade, but has been on the rise since 
2009.  Productivity also fell dramatically, from a peak of 2,158 kg per hectare in 1985 to a low of 250 kg per hectare in 2008 (Chart IV.1).  The reasons  are largely the same as for other agriculture:  
controversial land reform, in consistent agricultural policy, the inab ility to produce on a large scale, the 
absence of improved varieties and inputs, erratic w eather, a high incidence of disease and pests, and 
low yields. 
69. Faced with the sharp decline in national food production in the last decade, Zimbabwe was 
forced to increase imports of maize and wheat in or der to meet domestic demand;  it has to rely on 
imports and aid.  Food imports have been incr easing since 2005, and maize constitutes the bulk of the 
food imports from the southern African region, partic ularly South Africa.  However, the capacity to 
import food has been affected by the worsening national and internationa l economic environment, 
particularly foreign exchange shorta ges and soaring world food prices. 
05001,0001,5002,0002,5003,000
0500,0001,000,0001,500,0002,000,0002,500,0003,000,000Chart IV.1: 
Maize production and productivity trends, 1980 to 2010
Production (tonnes)
Yield (kg/h - right hand scale)Area (hectares)
Source: Ministry of Agriculture, Mechanization and Irrigation Development, Agriculture Sector Overview , pp. 3-4.  Zimbabwe WT/TPR/S/252 
 Page 75 
 
 
  70. State intervention in production and marketing,  including import and export of food products, 
has been common in Zimbabwe.  The Grain Marketi ng Board (GMB) is a wholly state-owned trading 
organization with a network of 87 bulk and bag depots.  The total storage capacity of GMB depots is 
over 4.5 million tonnes.  The depots are located in  the ten provinces and related to grain production 
areas.  The Board is involved in commodity tradi ng in cereals and oilseeds, providing logistical 
services to the agricultural industry, and pr ocessing a range of agricultural products. 
71. Until the marketing year 1994/95, the Boar d had a statutory monopoly and monopsony over 
domestic and international marketing of maize.  Producer prices were set by the Cabinet, throughout 
the country (with differential transportation costs paid  by farmers) and for all seasons, with input from 
the Ministry in charge of Lands, the farming unions, and the Agricultural Marketing Authority.  Prices 
were based on the costs of production;  supp ly, demand, and stock conditions;  the potential 
variability of producer prices;  and, apparently, wo rld price trends.  Producer prices were announced 
by the Government several months after planting had taken place, so that producer decisions were largely severed from prices.
23   
72. The prices of foodstuff (maize and wheat) were controlled by the Grain Marketing Board and 
the Ministry responsible for the economy.  However, since 2009, the GMB no longer controls the 
prices of maize and wheat.  The GMB is currently building up the National Strategic Grain Reserve requirements of about 400,000 tonnes of grain in physical stock.  Private traders are free to move maize throughout the country, but the GMB still plays the role of residual buyer in the markets, at a 
floor price negotiated with producers.  If farmers bring their grain to the GMB, having tried to sell 
everywhere else, the GMB is obliged to purchase that grain.  The purchase price is set by the 
Government. 
73. Average tariffs are 7.8% on cereals, and 23.8% on food products.  In addition to customs 
duty, food, including cereals and cereal products, is subject to other levies and taxes, together with 
multiple controls and the associated charges (Cha pter III(2)).  The heavy taxation food exacerbates 
household poverty and does not encourage investment in this subsector.  In times of domestic maize 
shortage, surcharges may be waived. 
74. Zimbabwe aims to increase yields for maize and small grains in order to ensure national and 
household food security through:  improving and promo ting proper use of fertilizers, efficient use of 
water bodies, and applying improve d farming techniques such as conservation farming;  promoting 
the production of small grains, especially in th e drought-prone areas;  strengthening research and 
extension capacities through training, provision of ma terials and equipment, and improving conditions 
of service for research scientists and extension of ficers;  and restoring the Agriculture and Rural 
Development Authority (ARDA) to its position as a major producer of wheat and maize, to contribute towards national food security. 
(d) Horticultural production 
75. Horticultural crops in Zimbabwe include fr esh produce, cut flowers, and citrus.  The 
subsector has grown rapidly since its inception in the mid 1980s;  foreign exchange earnings have 
registered average growth of 30% per annum and,  at its peak, the subsector accounted for 15% of 
formal employment in commercial agriculture, w ith 1.5 million smallholder farmers involved in 
production. 
                                                      
23 Prices for wheat, a winter crop in Zimbabwe, were announced prior to planting. WT/TPR/S/252 Trade Policy Review 
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  76. Horticultural exports increased from US$3.5 million in the 1985/86 season to 
US$139.5 million in 2000/01.  The European Uni on was the most important export destination, 
accounting for 99% of cut flowers, 89% of vegetabl es, herbs and spices, and 75% of citrus.  In 
1999/2000, the bulk of cut flower exports were des tined for Holland (85.65%), most fresh produce for 
the United Kingdom (62.29%), whilst citrus was d estined for France, the United Kingdom, Germany, 
and the Netherlands (78.60%).  Floriculture acco unts for at least 75% of the total value of 
horticultural exports and 30% by volume. 
77. Production of fresh produce is fairly divers ified and dualistic with small-scale producers 
mainly producing crops for the local and regiona l markets, and the commercial farmers relatively 
strong in high value crops.  The domestic market for fresh produce is estimated at five times that of 
exports.   Fresh produce peaked at around 15,000 tonnes in 1999 and was exported mainly to the 
European market. 
78. Ranked the second largest exporter of cut flower s in Africa, behind Kenya, and the fifth 
biggest exporter to the European Union, Zimb abwe's production has declined from its peak of 
23,000 tonnes recorded in 2001 to just over 14,500 tonnes.  The drop has been attributed to, inter alia , 
the general unfavourable macroeconom ic conditions, entry barriers for new farmers due to high initial 
capital requirements for production, and under-utiliza tion of existing production infrastructure. 
79. Zimbabwe produces a wide range of both temper ate and tropical fruits, including apples, 
pears, peach, plums, grape, kiwi, passion fruit, pineapples, and oranges and lemons.  Production 
peaked at 75,000 tonnes in 2001 of which 45,000 tonnes were exported.  Exports are currently around 
30,000 tonnes, mainly to the EU. 
80. Notwithstanding its rapid expansion, the subsector did not escape the downward trend 
observed in most of the productive sectors during the last decade.  According to the authorities, the 
growth of the subsector faces numerous challenge s including:  very high start-up costs (investment 
and working capital);  limited foreign currency for fi nancing basic infrastructure, critical inputs, and 
technology, especially for new entrants;  inadequa te post-harvest handling facilities, such as cold 
storage facilities at farms and at ports of exit;  unreliable water supplies and irrigation for both the 
small-holder and large-scale producers;  and stri ngent demands for phytosanitary standards and 
product specifications from the export markets. 
81. The average customs duties on flowers and plants  (HS Chapter 6), vegetables (HS Chapter 7), 
and fruits are 21.2%, 32.2%  and 28.5%, respectively (Table AIII.3), well above the average tariff of 
15.4%, without counting other levies and charges (Chapter III(2)). 
(e) Forestry 
82. Forests cover around 45% of Zimbabwe's land area.  Resources, mainly from exotic 
plantations and commercial indigenous timber, c ontribute to over 3% of GDP.  The commercial 
forestry sector employs approximately 14,000 people and, according to the authorities, 23% of rural 
household incomes come from forest-based activities.  Forests provide important safety nets during 
food crises (Table IV.6).  
83. Zimbabwe's forest resources comp rise four main categor ies:  (i) woodlands, forests, and trees 
mainly in communal areas and resettlement schemes (10 million ha);  (ii) woodlands and forests in 
small- and large-scale commercial farming areas (7 million ha);  (iii) woodlands and forests on state 
land and in protected areas (6 million ha);  and (iv)  exotic plantation forests (110,000 ha).  Gazetted Zimbabwe WT/TPR/S/252 
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  forests cover 0.8 million ha and national parks and other protected forests occupy some 5.4 million ha 
(Table IV.7). 
Table IV.6 
Production and export of timber products, 2000-09 
Year Sawn timber (m3)  Processed timber (m3) 
Production Export Local  Production Export Local 
2000 372,446 85,734 286,712  38,565 23,264 15,301 
2001 332,548 114,693 217,855  27,810 14,317 13,493 
2002 266,131 88,939 177,192  37,777 24,250 13,527 
2003 240,223 125,254 114,969  27,686 12,066 15,620 
2004 326,552 155,215 171,337  26,398 19,065 7,333 
2005 296,062 116,172 178,890  20,706 12,013 8,693 
2006 275,381 101,822 173,559  17,857 12,301 5,556 
2007 254,047 96,207 157,840  22,462 7,109 15,353 
2008 152,328 74,496 77,832  27,103 6,823 20,280 
2009 160,764 64,880 95,884  22,734 10,367 12,367 
Source:  Timber Producers' Federation (2000-2009), Zimbabwe Timber Industry (Annual) Statistics . 
Table IV.7 
Areas under various land uses in Zimbabwe 
Forest cover type Area (ha) % of total 
Moist montaine forests 11,508 0.03 
Plantations 168,581 0.43 
Woodlands 16,542,210 42.34 
Bushland 4,228,547 10.82 
Wooded grassland 888,463 2.27 
Grasslands 479,883 1.23 
Cultivated land 16,113,866 41.24 
Settlementsa 180,904 0.46 
Otherb 462,051 1.18 
Total  39,076,013  100 
a Cities. 
b Rock outcrops and water bodies. 
Source :   Forestry Commission Mappi ng & Inventory Unit (2008). 
84. Exploitation of forest resources is well belo w potential.  This activity could represent a 
significant source of fiscal revenue and export earnings  that could help to reduce rural poverty.  Out 
of a total of 250,000 ha available for plantations, only 75,000 ha are utilized. 
85. The major challenges in forestry are:  (i) defo restation due to land clearance for agriculture, 
and over-exploitation of trees for fuel wood for domes tic and agricultural uses;  (ii) overgrazing, wild 
fires, localized damage due to elephant grazing;  ( iii) brick making;  and (iv) illegal harvest for wood 
curio carvings.  According to the authorities, some  1.84% (approximately 320,000 ha) of Zimbabwe's 
indigenous forests and woodlands are lost to ag riculture and other household uses, such as energy 
supply and construction timber each year.  In so me areas, the Land Reform Programme has affected 
forestry due to illegal settlers clearing plantations  and research plots for settlement and agricultural 
purposes. WT/TPR/S/252 Trade Policy Review 
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  86. The key elements in the Government's policy objectives are:  forest reservation, plantation 
development, and commercial exploita tion;  rural reforestation and community forestry projects;  co-
management initiatives involving co mmunities and the Forestry Commission;  a sound framework for 
benefit sharing to ensure sustainable utilization;  and an emphasis on regulation, e.g. of trade in 
indigenous hardwood timber prod ucts, and innovative self-funding mechanisms or initiatives 
advocating forestry as a viable land-use option. 
87. To achieve these objectives, the Government in tends to facilitate the formulation of a 
forest-based land reform policy in order to allow an y settler on a plantation, research plot or gazetted 
forest to continue with forestry operations;  and in troduce a forest levy.  All forest owners or those 
dealing in forest products should pay a certain percentage of their earnings to the Forestry 
Commission to allow it to perform its designated f unctions.  Forest levies  will fund some of the 
activities in conservation and management of forest  resources as well as:  regulation and supervision 
of timber extraction by private land owners a nd concessionaires;  facilitation of establishing 
plantations on the unutilized land available for pl antations;  promotion of the inclusive business 
models that support the youth and women;  applica tion of strict penalties and licensing for harvesting 
forest resources, to reduce over e xploitation and deforestation;  and enhancing and standardization of 
the role of traditional leaders in preservation of forests by prioritizing and upgrading training  
88. The exotic plantation timber industry is domin ated by several large enterprises operating 
alongside small family entities.  Most industry players are members of the Timber Producers 
Federation (TPF), an association of Zimbabwean timber growers and sawmil lers.  The Federation's 
objectives include:  promoting timber and forest produc ts;  formulating exotic timber industry policy;  
maintaining high product standards;  protecting th e environment;  promoting specialized forestry 
training and research, and disseminating informat ion on the exotic timber industry.  There are 
13 members of this association;  the biggest four are Allied Timbers Holdings, Border Timbers Limited, the Wattle Company Limited, and Mutare Board and Paper Mills Limited. 
89. The indigenous hardwood timber industry is also organized in the Indigenous Hardwood 
Timber Association (IHTA), headqua rtered in Bulawayo.  The Association is made up of indigenous 
timber concessionaires, sawmillers, and timber processors, and is still establishing itself. 
90. The regulatory framework for the timber industry (forestry sector) is the Forest Act 
(Chapter 19:05), which regulates activities on state forests and private forests;  and the Communal Land Forest Produce Act (Chapter 19:04), which regulates management and utilization of forest 
resources on communal land and resettlement areas.  Under these two enabling acts, several statutory 
instruments have been drawn up to address specific forest regulatory issues that are not adequately 
covered.  The Forestry Commission of Zimbabwe is  in the process of developing the National Forest 
Standard in consultation with the forest industry stakeholders.  The Acts aim at the sustainable 
management of forest resources, fauna, and flora,  as well as capacity building through both formal 
and informal forestry-based training, research, and conducting regulatory func tions.  This framework 
is administered by the Ministry of Environment and Natural Resources Management.  Zimbabwe is a 
member of the Treaty on the Conservation and Sust ainable Management of Forest Ecosystems in 
SADC and its sustainable forest management plan is designed to  fit within this framework.  
Zimbabwe is also a signatory to the SADC Protocol on Forestry. 
91. The Forest Act distinguishes between listed forests,  where the aim is to conserve biodiversity;  
protected forests, which belong by tradition to local communities;  and forests for permanent 
exploitation, which are exploited under concession  agreements for a limited renewable term of Zimbabwe WT/TPR/S/252 
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  five years.  A Concession agreement is signed between Forestry Commission, the concessionaire 
and/or the local authority to regulate the timber exploitation process. 
92. The timber concessions are awarded through the involvement of the Forestry Commission 
internal Tender Committee, and the process is guide d by legal provisions in the Procurement Act and 
its attendant statutory instruments.  The procedur e for awarding concessions is detailed in a Forestry 
Commission publication, which serves as a manual for Forestry Commission (FC) staff, and has been availed to all local authorities with exploitable timber resources.
24 
93. The enterprises that exploit timber must, in principle, pay a forest concession fee of 
US$5.00 per hectare per year (surface rent);  a fee of US$2.00 per ha per year on small-scale timber 
cutting operations;  and a refor estation tax of 1% of the ex works (EWK) value per m3 of wood 
harvested in the area.  There is no charge for e xport of wood in the rough, as export of timber in 
unprocessed and semi-processed forms is prohibited under Statutory Instrument 112 of 2001.  In addition to the above fees, concessionaires are to pay royalty fees of approximately $30 per cubic 
meter standing timber;  management fees of 5% of  royalty fees, and supervision fees of $450 per FC 
timber measurer per month.   
94. Under the ISIC definition, the simple average of  the tariffs applied to timber products imports 
is 24.9%, with rates ranging between 5% and 40% (Table AIV.1).  Othe r levies and taxes also apply, 
together with various import and e xport controls (Chapter III(2)).   
(3) M
INING , ENERGY , AND WATER  
(i) Mining products 
(a) Overview 
95. In spite of Zimbabwe's huge mineral resources, its mining sector remains underdeveloped 
(Chapter I).  It accounts for almost 25% of expor t earnings, with more than 90% of mineral output 
exported, in primary form.  The sector has been less  affected by the domestic crisis than major key 
sectors of the economy;  it contributed nearly 50% of total exports and was a major beneficiary of 
foreign direct investment in 2010.   
96. About 60% of Zimbabwe's land surface compri ses ancient rocks hosting a wide range of 
mineral resources, including gold, platinum, diamond, coal, asbestos, copper, nickel, zinc, lead, chrome ore, limestone, phosphates, clay, and dolomites (Table IV.8). 
97. The structure of the mining sector in Zimbabwe is bimodal.  The industrial mining subsector 
comprises state-trading monopolies (such as the Minerals Marketing Corporation of Zimbabwe 
(MMCZ)
25), and private companies (such as Rio Zim, Falcon Gold, Bindura Nickel Mining Company 
Limited (BNC), Zimasco, Zimalloys, (the latter two receive special privileges such as special concessions from the State )) are working in the Great Dyke and in  the greenstone belts, also known as 
gold belts.  The vast artisanal subsector is mining fo r gold (mostly informally), and to a lesser extent 
other minerals. 
                                                      
24 Forest Commission (undated). 
25 The Minerals Marketing Corporation of Zimbabwe (MMCZ), established under the MMCZ Act of 
June 1982, is a wholly state-owned corporation under the Ministry of Mines and Mining Development. WT/TPR/S/252 Trade Policy Review 
Page 80 
  
  Table IV.8 
Minerals resources in Zimbabwe 
Mineral Estimated (tonnes) resources Cu rrent annual (tonnes) extraction rate 
Gold 13 million  20  
Platinum 28 billion  24 million  
Chromite (Great Dyke) 930 million  700,000  
Nickel 45 million  9,000  
Coal 26 billion  48 million  
Diamond 165 million  Infancy 
Iron Ore 30 billion  300,000  
Copper 52 million  .. 
Coal-bed methane The largest known reserve in Sub-Saharan 
Africa .. 
.. Not available. 
Source : Government of Zimbabwe (2006), Reference Investment Opportunities in Zimbabwe , Investor's Prospectus , p. 12. 
98. The mining sector is making only a marginal contribution to growth, despite its immense 
potential.  Skewed macroeconomic policies over th e past decade, including an extended period of 
overvaluation of the Zimbabwean dollar and st eep foreign exchange surrender requirements, 
adversely affected investment in the sector.  Increa sing government control, and lack of clarity over 
the royalty and tax regime, also ba dly affected the sector.  By 2008 , most mining operations had shut 
down, downsized or been subject to care and mainte nance.  Mineral production declined significantly.  
The sector contracted by 81% during 1999-2008.  Gold production fell from a record high of 
27,114 kg in 1998 to 3,579 kg in 2008, with simila r trends in the output of all other minerals.26 
99. The sector could be a vehicle for development progress.  Through upstream links with 
transport, security in the mines, catering and cl eaning services, vehicle maintenance and repairs, 
health and security equipment, earthworks, electri cal equipment and rubber, the mining sector could 
have a huge industrial carry-over effect.  The agri culture sector could also benefit from the demand 
generated by wages paid in the mining sector, as a pr ovider of food to the mining workers.  Moreover, 
downstream prospects for the local processing of raw materials could solve the problem of the high 
cost of transporting them. 
100. There are few mining product imports.  Impor ts of mining and quarrying products (ISIC, 
Revision 2) are subject to an average tariff rate of 5.9%, down from 16.8% in 1994;  inclusion of the 
surcharge raises the average border charge to 31.3%.  Imports of metal ores bear average MFN tariffs 
of 5%, down from 16.3% in 1994;  the surtax rises this  average to almost 30%, not including the other 
import levies and taxes (Chapter III(2)) and Table AIV.1). 
101. Zimbabwe, with its huge reserves of raw material s, should have no interest in protecting local 
production of precious stones and metals.  The unde rlying reason appears to be to encourage the 
processing of these materials;  however, and unfort unately, national structures are weak and have 
nearly collapsed due to the severe, decade-long ec onomic crisis.  Moreover, the heavy taxation of 
imports, combined with different surcharges at  borders, is not only reinforcing the loss of 
competitiveness of the mining industries but also disc ouraging investment in the sector.  The positive 
tariff escalation on minerals can hardly promote processing for export. 
                                                      
26 Government of Zimbabwe (2009). Zimbabwe WT/TPR/S/252 
 Page 81 
 
 
  (b) Mining policy 
102. The Ministry of Mines and Mining Developmen t is responsible for the formulation and 
implementation of mining policies (Chapter II).  Th e Mines and Minerals Act (Chapter 21:05) is the 
principle legislative tool guiding mining operation in Zimbabwe. 
103. The general mining policy objectives are sustai ned development of mineral resources and to 
create employment opportunities by exploiting Zi mbabwe's natural resources and endowments 
profitably for socio-economic deve lopment.  Environmental issues in mineral exploitation as well 
empowerment issues are given due attention. 
104. Some mineral resources can be worked prof itably through small-scale mining.  Targeted 
policies are geared towards developing this sub sector, which would yield considerable returns in 
terms of job creation and poverty reduc tion for indigenous Zimbabweans.   
105. Mineral rights in Zimbabwe are vested in the President.  Exploration and exploitation of 
mineral deposits are regulated by the Mines and Minera ls Act.  Prospecting licences are issued by the 
Mining Commissioner upon application.  The fees are US$50 for an ordinary prospecting licence, and 
US$100 for a special prospecting licence or a duplicat e prospecting licence.  Exclusive prospecting 
orders (EPOs), which confer the exclusive right to pr ospect for specified minerals in any defined area, 
can be obtained through application to the Mining  Affairs Board and payment of a refundable deposit 
equal to US$0.12 per hectare per month.  Mining claims  may be registered by holders of a prospecting 
licence through application to the Mining Commissioner.   
106. Several other fees are payable for registrations and inspections (Table AIV.2).  Applications 
for exclusive prospecting orders involve various processing steps and agencies (Table AIV.3).  The 
requirements for acquiring mining rights and the steps to be followed are provided by law (Tables AIV.4 and AIV.5).  New projects require  an environmental impact assessment report, 
submitted to the Ministry of Mines.  Mining clai ms that are worked continuously have no expiry 
dates. 
107. Holders of operating permits are subject to:  fixed fees for the permits to be granted;  royalties 
that depend on the area exploited;  an extraction ta x at a rate that varies with the nature of the 
substances;  an ad valorem  tax;  and various other taxes and ch arges.  The royalty is calculated as a 
percentage of the gross fair market value of mi nerals produced and sold, as follows:  precious stone, 
10%;  precious metals, 3.5%; base metals, 2%;  industr ial minerals, 2%;  coal bed methane gas, 2%;  
and coal, 1%.  The fiscal burden on the mining sect or is around 56% of earni ngs, plus, generally, 15% 
to 25% in the form of informal payments.  In cont rast, income tax on mining ope rations is levied at a 
flat rate of 15% for all minerals;  all capital expe nditure incurred exclusively for mining operations is 
deductible at a rate of 100%.  Furthermore, mini ng companies benefit from indefinite carry-forward 
of their tax losses (Table AIV.2). 
108. Mine operators are entitled to a number of exem ptions regarding sales tax, customs duty, and 
the import surcharge.  Rebate of duty is also gr anted to a holder of a mining location for specified 
goods imported during a specified period for use sole ly and exclusively for mining development by 
the holder.  Offshore borrowings require Reserve Bank  approval;  and interest paid on borrowings of a 
debt to equity ratio of up to a maximum of 3 to 1, are tax deductible. 
109. Mining has been a preferred sector for foreign investment (Chapter III(1)).  Although there is 
no limit to the share of foreign ownership of firms involved in mining, the recent Indigenization and WT/TPR/S/252 Trade Policy Review 
Page 82 
  
  Economic Empowerment Bill gives Zimbabweans the ri ght to take over foreign-owned companies.  
This law poses serious risks for foreign investment. 
110. Restrictions on international trade in the mining sector include state-trading monopolies, 
parastatals, and export-permit requirements as well as tariffs.27  In order to reduce transfer pricing 
abuses, the Government established the Minerals Marketing Corporation of Zimbabwe (MMCZ) in 
1983.  With the important exception of gold, which is  sold through Fidelity Printers and Refiners and 
is now marketed freely by some producers, all mine ral exports must be marketed through the MMCZ.  
The MMCZ and the relevant mining firm together ne gotiate sales with prospective buyers, for which 
the MMCZ collects a 0.875% commission.28  Upon completion of a contract for sale, the MMCZ 
takes insurance responsibility for the shipment but  does not take receipt of the commodity.  The 
Minerals Marketing Corporation Act allows the MMCZ to authorize producers to market their own 
products;  to date, this authority has b een granted to one firm (Chapter III(3)).29   
111. The Government is an important investor in the mining sector.  The Zimbabwe Mining 
Development Corporation (ZMDC), a wholly state-ow ned entity, began operations in 1982, partly in 
response to threatened disinvestments following inde pendence.  The main tasks of the ZMDC are to 
plan, coordinate, and implement mining development pr ojects;  to assist persons engaged, or about to 
engage, in mining;  to engage in prospecting, exploration, a nd mineral beneficiation (higher 
value-added activity);  to invest in mining on behalf of the State;  and to encourage the formation of 
mining cooperatives. 
112. The ZMDC invests in mines in partnership with private companies or on its own.  Its current 
holdings include copper, gold, and tin mines.  Its products are marketed for export by the MMCZ or 
the Reserve Bank of Zimbabwe. 
113. The Government provides certain services to further its objective of promoting the 
development of small-scale mines.  The Departme nt of Mining Engineering, the Department of 
Metallurgy, and the Geological Survey Department  (all in the Ministry of Mines) provide free 
technical advice to small-scale producers.  The De partment of Mining Engineering also leases some 
equipment to small-scale producers.  Furthermore, the Government intends to recapitalize the Mining 
Industry Loan Fund in order to assist miners with  loans, access to machinery and equipment, and 
technical services.  
114. According to the authorities, Zimbabwe has dedi cated research institutions, refining facilities, 
and government laboratories for mining research and fire assay, mineral dressing, wet chemistry, rock 
mechanics, carbon-sulphur analysis and analysis of coal and coal bed methane gas.  These include:  
the Research Council of Zimbabwe, the Scientific  and Industrial Research and Development Council 
(SIRDC), the Metallurgy Department, and the Inst itute of Mining Research.  Private laboratories 
offering similar services are:  Antech Laborator y in Kwekwe, Hwange Colliery Company at Hwange, 
Zimlabs in Harare, Peacock and Simpson in Harare, and Rio Zim in Kadoma.  Nickel is refined at 
Bindura Nickel Refinery and Empress Nickel Refinery .  A base metal refinery exists at the Selous 
Metallurgical complex, while copper is refined at Al aska.  All gold is refined at Fidelity Printers and 
Refiners in Harare, while chrome is smelted at Zimasc, Zimallos, Marantha, Wel Mining and Oliken 
smelters.  Diamond-cutting facilities exist in Harare.   
                                                      
27 Exports permit requirements are issued by the Mi nistry of Industry and Commerce and in some cases 
are based on permits issued by other ministries. 
28 The MMCZ does not guarantee prices to mining firms. 
29 Permission has been given to one firm to market platinum privately, from Zimbabwe's first platinum 
mine. Zimbabwe WT/TPR/S/252 
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  115. Zimbabwe's mining sector has faced severe cris is in the last decade leading to an 80% 
contraction of national production and the near collap se of all mining firms.  The crisis was due to a 
combination of internal and external factors, including economic mismanagement, poor governance 
arising mainly from weaknesses in the rule of law in  the context of the Government's fast-tracked land 
reform programme, the concomitant loss of support from the international community, capital flight, 
and low investment.   
116. The Government intends to revitalize the sector to become the country's primary driver of 
economic growth and recovery in the next five years.  For this to happen, it anticipates that 
uncertainty over the controversial indigenization and empowerment law30 and structural constraints, 
such as frequent power outage, shorta ge of funds for working capital a nd recapitalization, skills flight, 
and inefficient infrastructure, will be appropriately addressed. 
117. The Ministry of Mines and Mining Devel opment is currently working on a Minerals 
Development Policy, a Diamond Act, and a Diamond Policy.  These will spell out strategies for royalty policy;  minerals value added, and benefi ciation activities;  mineral resource management and 
the adoption of a transparency initiative for the ex tractive industries;  and reforms of the Mines and 
Mineral Act.  These policies will also address corporate social responsibility. 
118. The Inclusive Government has completed a re view of the framework for mining rights, 
pricing of minerals and surrender requirements.  The Mines and Minerals Ac t is being amended to 
facilitate review of surface rentals, and discourag e hoarding and speculating in exclusive prospecting 
orders.  The Government hopes that the amendmen ts will guarantee increased capacity in mineral 
production, continuous exploration, beneficiation, and value addition of mine rals.  The amendments 
will also provide for an improved and competiti ve legislative framework for mining, and a 
user-friendly mining environment.  The changes are al so expected to result in an investment-focused 
legislation based on a win-win principle, while addressing issues of levies and taxes on mineral rents.  The Government has put in place modalities for th e Indigenisation and Empowerment Act for the 
mining sector.  According to the authorities, the legi slation will be implemented in a way that does not 
undermine the attraction of much needed foreign di rect investment.  Mining companies are expected 
to submit indigenisation and empowerment plans to th e Ministry of Indigenisation;  the plans must 
spell out how they plan to meet the Act's requi rements for 51% shareholding in indigenous hands 
within five years.   
119. While problems seem likely to persist in the sh ort term, the authorities express considerable 
optimism regarding the outlook for the mining sector over the medium- to long-term, based on recent 
reforms.  In addition to the reforms, the upgrading of plants, and the recapitalization of mining firms, 
the business climate in the mining sector needs stability  and visibility, while the taxation system needs 
to be simplified and made more flexible, and the responsibilities of the institutions involved need to 
be clarified. 
                                                      
30 "The Indigenization and Economic Empowerment Bill will give Zimbabweans the right to take over 
and control many foreign-owned companies in Zimbabwe.  Specifically, over 50% of all businesses in the 
country will be transferred into local black African hand s.  The bill defines an indigenous Zimbabwean as "any 
person who before the 18 April 1980 was disadvantaged by unfair discrimination on the grounds of his or her 
race, and any descendant of such person" ( The Economist,  "Blackening the Economy", 13 September 2007.  
Viewed at:  http://www.economist.com/world/ africa/displaystory.cfm?story_id=9804332. WT/TPR/S/252 Trade Policy Review 
Page 84 
  
  (c) Review by product 
120. Zimbabwe has significant reserves of mineral resources;  those currently being exploited 
include gold, platinum group metals (PGMS), diam ond, chromite, coal, copper, asbestos, nickel, iron 
ore, and other minerals such as tantalite, tin, ma nganese, lithium, ruby, emeralds.  Zimbabwe has the 
world's second largest resource (next to South Afri ca) of platinum-group metals, as well as significant 
reserves of copper and nickel (Table IV.8). 
Gold 
121. Gold is mined in the greenstone belts regi ons, also known as gold belts.  According to the 
authorities, there are over 400 recorded major gol d deposits and only 40% are being commercially 
exploited.  More than 90% of Zimbabwe's  gold deposits are in the greenstone belts. 
122. Gold used to account for over 40% of the valu e of mineral production in Zimbabwe and 15% 
of the country's export value in the 1990s.  Becau se of the severe crisis, gold production dropped from 
27 tonnes in 1999 to 3.6 tonnes in 2008.  Gold export sales used to be made exclusively through the Reserve Bank of Zimbabwe, which did not require an export licence or permit.  
123. In 2009, in order to revitalize the sector, to  increase competition, and to curb smuggling, the 
Government liberalized marketing in the gold sector, allowing gold mines to sell their production 
directly, after beneficiation through Fidelity Pr inters and Refiners, a company owned by the 
Zimbabwe Reserve Bank.  Export of unprocessed gol d is not permitted.  Gold producers may now 
market gold bullion to customers of their choice.  They may also export gold and silver through their 
banks;  exchange control approval from the Reserve Ba nk is still required.  With respect to price, both 
alluvial gold and reef gold are sold at th e same international price, which depends, inter alia , on the 
weight and purity of the gold after refining.  
124. The Ministry of Finance has issued gold dealership licences to:  Forbes & Thompson 
(Bulawayo) (Pvt) Ltd;  Blanket Mine (Pvt) Ltd;   DTZ-OZEGEO;  Mettalon Gold Zimbabwe (Pvt) 
Ltd;  and Chamber of Mines.  Gold dealership li cences are issued in accordan ce with section 18 of the 
Gold Trade Act (Chapter 21:03) to gold produ cers and organizations representing gold producers, 
such as the Chamber of Mines, registered with th e Ministry of Mines and Mining Development, and 
who have a certificate of incorporation and a gol d producing permit.  Organizations representing gold 
producers are required to comply with Ministry of Mines and Mining Development registration requirements before applying for a dealership licence.  The Ministry of Mines and Mining Development must confirm whether prospective app licants are active producers and have the required 
documents.  A gold dealership licence is issued to an  applicant who shows proof of capacity to deliver 
to the prescribed assayer a minimum of 20 kg of gold per month.  Any gold acquired in terms of the licence is to be delivered by the licensee to th e prescribed assayer for valuation and safekeeping 
pending export instructions from the licensee.  Th e annual gold dealership licencing fee is set at 
US$15,000. 
125. The tariff on gold is 16.3% (HS 71.08).  As with diamonds and most mineral products, in 
addition to customs duty, gold is subject to a royalty fee of 4.5% and to a multitude of other levies and taxes, as well as several controls and their associat ed charges (Chapter III(2) and Table AIII.3).  The 
aim seems to be to encourage gold processing;  ho wever, the heavy taxation of both imports and 
exports, combined with levies and controls of all descriptions, is helping to make Zimbabwean gold 
less competitive as well as encouraging fraud and smuggling in connection with trade in these 
products. Zimbabwe WT/TPR/S/252 
 Page 85 
 
 
  Nickel 
126. Zimbabwe's nickel reserves are estimated at 45 million tonnes, and over 30 deposits have 
been discovered.  Besides the huge laterite ni ckel deposit found in the northern part of the 
Great Dyke, other deposits are in several serpen tinite areas in greenstone belts and indigenous 
complexes.  Nickel accounted for 15% to 20% of th e value of mineral production, and 3% to 12% of 
Zimbabwe's total exports in the 1990s.  Like  gold and other minerals, production dropped 
considerably in the last decade. 
127. The Government intends to improve activity in platinum group mineral (PGMs), resume 
operations by Bindura Nickel Mining Company Limited (BNC);  and recapitalize Rio Zim's Empress 
Nickel Mine.  However, all nickel will continue to be marketed through the Minerals Marketing 
Corporation of Zimbabwe (MMCZ). 
128. The customs duty on nickel is 10.6% (HS 75), a nd this is supplemented by the multitude of 
other levies and taxes, as well as various controls and their associated charges (Chapter III(2), and 
Table AIII.3). 
Chrome ore 
129. Zimbabwe has the world's second largest chrome ore reserves and was the world's 
third largest producer in the 1990s.  Chromite reserves on the Great Dyke are around 10 billion tonnes, and the country is estimated to hold over 80% of the world's resources of metallurgical quality 
chrome.  The ore is converted locally to ferro chrome and largely exported (along with other 
ferroalloys) or used in the domestic steel indus try.  Ferrochrome production uses large amounts of 
electricity, and thus has been particularly affected by severe power shortages, mostly during the 
drought season.  Chrome ore production fell considerably in the last decade.  
130. The Government plans to increase chrome pr oduction by expanding the production capacity 
of ZIMASCO, by reopening Maranatha Mine, the major chrome producing company, and by enabling 
Zimalloys to resume production.  As for most mi nerals products, marketing is through the Minerals 
Marketing Corporation of Zimbabwe (MMCZ). 
131. The Government's policy on chrome is to promot e beneficiation into ferrochrome by banning 
exports of raw chrome.  The first ban on raw chrome  exports was introduced in 1996, in an attempt to 
encourage local value added, but was relaxed over the years as the country's smelters could not 
process all the production.  The second ban was in 2009 (for 18 months) to allow mining firms to 
recapitalize and ward off the effects of the financial crisis.  
132. The customs duty on chrome is 5.0% (HS 2610, 2819, 8112),  plus other levies and taxes, as 
well as various controls and their associated charges (Chapter III(2), and Table AIII.3). 
Platinum group metals (PGMs), di amonds and other precious metals 
133. Zimbabwe holds the second-largest platinum group metals resources in the world, on the 
Great Dyke, and intends to rationalize production by urging platinum producers to enter into local 
tolling arrangements for smelting, c onverting, and base metal refining. 
134. The main diamond deposits are concentrated in  Somabula, Beitbridge, Zvishavane, and the 
Marange diamond field.  Zimbabwe's diamonds remain s largely unexploited.  To reduce illegal traffic 
and to spur the contribution of the sector, the G overnment has progressed with the Kimberly Process 
Certification. WT/TPR/S/252 Trade Policy Review 
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  135. The average tariff on diamonds and other relate d precious metals is 15.5% (HS 71).  In 
addition to tariffs, diamonds and othe r related precious metals are subject to a myriad of other levies 
and taxes, including export tax, as well as to  multiple controls and the associated charges 
(Chapter III(2)).  The aim of this policy is to en courage the processing of diamonds and other related 
precious metals but, in practice, it is helping to make Zimbabwean di amonds and other related 
precious metals less competitive and encouraging fraud and smuggling in connection with trade in 
these products. 
(ii) Petroleum products 
136. Zimbabwe imports refined petroleum products and a ll of its liquid fuel requirements.  It is 
estimated that when the economy was at its peak in the 1990s, the monthly demand for diesel, petrol, 
and jet fuel, was 105 million, 90 mi llion, and 15 million litres, respectively;  the transport and 
agriculture sectors consumed almost 60%.  Petroleu m exploration is under the Ministry of Mines;  
there are no exploration activities at present. 
137. The stated government policy is to ensure ad equate supply of fuel for both domestic and 
industrial use;  and to introduce ethanol/petrol bl ending by 2013.  To this end, the Government 
intends to establish an independent regulator by  end 2011;  increase production and use of ethanol 
blend and bio-fuels by 2013;  and raise the Beira pipeline capacity utilization to over 90% by the end 
of 2011.  In 2010, NOCZIM was restructured into tw o companies:  Petrotrade (Pvt.) Ltd (responsible 
for fuel trading);  and National Oil Infrastruct ure Company of Zimbabwe (Pvt.) Ltd (NOIC), 
responsible for the fuel logistics infrastructure (pipeline and bulk stor age facilities).  The companies, 
both 100% owned by the Government,  started operations in the first quarter of 2011.  The 
restructuring was meant to eliminate conflict of ro le and interests by separating service provision and 
infrastructure operations.  Other Government measur es include the import of liquid fuels by rail and 
through the Beira pipeline, and the enforcement of environmental impact certification for all 
infrastructure projects before commencement.  The curre nt electricity regulator is to be replaced by an 
energy regulator for all energy subsectors (including petroleum). 
138. Until 2003, the National Oil Company of Zimbabwe (NOCZIM), a parastatal, was the sole 
importer of fuel.  The other oil companies (BP & She ll, Mobil, Caltex, and Total), all multinationals, 
purchased fuel from NOCZIM for distribution thr oughout the country.  In 2003, the Government 
opened up the oil industry (majority  ownership should be by Zimbabweans), as well as the fuel import 
business, to all players registered as such, resulting in  a multiplicity of fuel importers in the country.  
Oil companies are registered as importers, wholesalers, or retailers.   
139. Since 2009, the energy industry, including NOCZI M, has been allowed to charge market 
prices and recover full procurement costs on its sales  to Government and farmers.  Government and 
the oil industry agree on a maximum fuel price for a month, based on cost factors that are plugged 
into a pricing model.  If cost factors change in the course of the month to warrant a review, 
adjustments will be made to ensure that fuel pr ices remain economic.  The elements used in the 
pricing model are f.o.b. prices, transport, taxes /levies, storage and handling, other administrative 
costs, and margins.  Since dollarization, price change s were caused just by movements in f.o.b. prices.  
In addition, because of competition, oil compan ies normally charge below the agreed prices. 
140. The Government of Zimbabwe has "take-or-pay  agreements" on the Beira-Feruka pipeline 
and the Beitbridge-Bulawayo Railway, whereby the Government will pay, whether it uses the 
facilities or not.  The government policy aims to discour age use imports of fuel by road rather than by 
pipeline and rail:  an extra levy of 4 cents per litre is charged for all imports by road.  Because this is a 
disincentive, it is not included as part of the prici ng model of oil.  Every registered importer can use Zimbabwe WT/TPR/S/252 
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  the pipeline and the related storage facilities for a fee.  Pipeline fees:  3.7 cents/litre for international 
transport, and 2 cents for local transport. 
141. The National Oil Infrastructure Company of Zimbabwe owns and controls fuel storage 
capacity of more than 420 million litres (Table IV.9).   The Government has decided to market these 
facilities to neighbouring countries so as to make Zimb abwe a hub for fuel trade and movement in the 
region.  The Government has invited international suppliers to store their product in Zimbabwe and 
export from there, instead of exporting into the re gion from Beira:  this is already happening, and 
some countries in the region import fuel either from or  via Zimbabwe.  The fuel arrives by pipeline, is 
stored in Zimbabwe, and is transported out by rail or road.  BP, Shell, and other private companies 
have their own storage capacities.  They also  make lease arrangements among themselves for 
secondary storage.  It is the Government's responsibili ty to maintain strategic reserves:  it procures the 
fuel using the Strategic Reserve Levy of 1. 5 cents per litre imported into the country. 
Table IV.9 
Fuel storage capacity in Zimbabwe  
(Million litres) 
  Diesel  Petrol Jet A1  Paraffin 
Msasaa 25,800 12,500 10,600 4,900 
Feruka 58,000 41,130 15,100 4,200 
Beitbridgeb 3,480 1,920 - 0,320 
Mabvuku 210,000 80,000 70,000 - 
Total 297,280 135,550 95,700 9,420 
a  Owned by Petrozimline, the company that also owns the local pipeline (Feruka-Msasa).  Government, through NOCZIM, has 
50% equity in Petrozimline. 
b  Owned by Government through the Ministry of Local  Government.  Feruka a nd Mabvuku are owned by NOCZIM. 
Source:   WTO Secretariat, based on inform ation provided by the authorities. 
142. Imported electricity and petroleum products are s ubject to customs tariffs of 12.8%, with rates 
varying from 0 to 45%, while the average MFN tariff  on imports of mineral fuels, oils and products 
(HS Chapter 27) is 11.3%, with rate ranging from 0 to 45%, plus other levies and taxes (Chapter III 
and Table AIII.3).  Altogether, the various levi es and taxes collected represent around 60% to 70%  of 
the price at the pump, which has the effect of placing considerable upward pressure on production costs in Zimbabwe. 
143. Gas reserves in Zimbabwe have been estim ated at 40 trillion cubic feet of potentially 
recoverable gas, available in coal seams and th e associated carbonaceous shale in the Lupane/Lubimbi 
area.  Studies have revealed gas contents of between 2m
3 per tonne to 5m3 per tonne.  Experts have 
also found that the gas is pure, with 95% methane.   According to the authorities, the next stage, 
subject to investor interest, is the verification of the cameral viability of extracting the gas.   
(iii) Electricity 
(a) Overview 
144. Availability of adequate and reliable energy is  critical for the economic recovery, growth, and 
transformation in Zimbabwe.  Power supplies underp in all other services, and the development of 
reliable, adequate, low priced power can contribut e significantly to the efficient and effective 
functioning of the national economy and the maintenan ce of Zimbabweans' standard of living, as well WT/TPR/S/252 Trade Policy Review 
Page 88 
  
  as to stimulating the expansion of existing businesses and the establishment of new ones.  Electricity 
supply is a key factor for output in mining, manufacturing, and agriculture.    
145. The hydroelectric and thermal facilities ha ve an annual generating capacity of around 
1,960 MW, and national demand is approximately 2, 200 MW, but this potential has not been realized 
over the past decade.  Domestic generation capac ity has fallen far below demand due to lack of 
maintenance of aging generation plants, and of tr ansmission and distribution facilities, as well as 
disruptions in the supply of coal for generation.  Consequently, current electricity production is 
approximately 60% of installed capac ity, with part of the shortfall me t by imports, (Table IV.10).  The 
two most important hydroelectric and thermal power plants, Kiriba (750 MW) and Hwange 
(920 MW), have been operating below their insta lled capacity while the two others (Harare and 
Bulawayo) have stopped operating (Table IV.11).   
Table IV.10 
Average daily electricity output MW/hr, 1996-2010 
Year Average daily production Im ports Average total electricity 
1996 833 458 1,291 
1997 833 458 1,291 
1998 751 562 1,313 
1999 809 602 1,411 
2000 799 582 1,381 
2001 905 488 1,393 
2002 980 458 1,438 
2003 1,004 399 1,403 
2004 1,109 290 1,399 
2005 1,072 351 1,423 
2006 888 484 1,372 
2007 852 335 1,187 
2008 853 196 1,049 
2009 838 235 1,073 
2010 947 209 1,159 
Source:  WTO Secretariat, based on informa tion provided by the authorities. 
146. Due to reduced economic activity, electricity cons umption patterns shifted in the past decade, 
with domestic users consuming more energy than  commercial users.  However consumption per 
capita also declined, from 738kWh in 1995 to around 600kWh in 2008.  The authorities expect this to 
change with the implementation of the Global Political  Agreement, which halted the political crisis in 
Zimbabwe. 
Table IV.11 
Electricity capacities, as at September 2010  
Power station Type Installed capacity  
(MW) Available capacity  
(MW) Available capacity as % 
of installed capacity (%) 
Kariba Hydro 750 650 87 
Hwange Thermal 920 547 60 
Harare Thermal 100 0 0 
Bulawayo Thermal 90 0 0 
Munyati Thermal 100 40 40 
Source:  WTO Secretariat, based on informa tion provided by the authorities. Zimbabwe WT/TPR/S/252 
 Page 89 
 
 
  (b) Regulatory framework 
147. The Ministry of Energy and Power Development formulates energy policy, including, in 
particular, the elaboration of energy strategy, intr oduction of a master plan for electricity and the 
regulation mechanisms, development of the potenti al for producing, transporting and distributing 
water and electricity, and developm ent of the capacity for the exploitation of electrical energy and 
domestic supplies. 
148. The Government's policy objectives are to restore and increase power generation capacity to 
meet national demand and for economic  recovery and growth, as well as for export in the region.  It 
aims also to improve the reliability of supply of comm ercial fuels;  to encour age more efficient use of 
energy by adopting pricing that reflects costs, and by providing technical assistance to increase 
efficiency in energy use;  and to improve wood- fuel supply and utilization efficiency and, where 
viable, to promote the substitution of wood-fuels with  modern fuels.  Private-sector participation in 
power generation and transm ission is now encouraged. 
149. The Electricity Act of 2002 designated the Zimbabwe Electricity Regulatory Commission 
(ZERC) as the regulatory body for the sector.  The Elect ricity Act calls for the restructuration of the 
Zimbabwe Electricity Supply Authority (ZESA) and the creation of the Rural Electrification 
Agency.31  These changes were set up to encourage invest ment in the power sector by putting in place 
an appropriate regulatory framework compatible with  those of other SADC members.  Zimbabwe is a 
signatory to the SADC Protocol on Energy and an operating member of the Southern African Power Pool (SAPP). 
150. Though the regulatory provisions state that th e ZERC must be independent, it is under the 
direct control of the Minister of Energy and Power Development.  In principle, the Electricity Act 
gives the Minister of Energy and Power Developm ent the authority to issue regulations on many 
aspects related to the power sector, including: the Commission's administrative affairs;  the duties, 
powers, rights, and obligati ons of a licensee;  the procedure for ap plying for, changi ng, or cancelling 
licences;  tariff- and price-setting by licences;  fees, fines, levies, and penalties payable by licensees or 
consumers;  the regulation of investment assets an d properties, and the interest on such assets and 
properties;  procedures for monitoring and mitiga ting market power;  terms and conditions to access 
the transmission and distribution networks;  custom er-related matters such as complaints, difficulty 
paying bills, connection and disconne ction procedures;  regulatory treatment of rural electricity 
schemes and investments;  and procedures for addr essing licensee merges, acquisitions, and affiliate 
relationships in the power sector.   
151. Competition, market power, and regulation of power tariffs, are within ZERC's mandate;  
ZERC oversees and determines whether electricity is provided competitively.  It is responsible for 
defining the pricing methodology and sets electri city prices, subject to Cabinet approval. 
152. According to the regulatory framework, tariffs acr oss categories should be set with a view to 
phasing out or substantially reducing cross-subsidi es, except for some customers and subsidies under 
the Rural Electrification Fund.  However, there is r esistance to tariff increases and the average tariff is 
lower than the generation costs.  For instance, in  2009, the average end-user tariff for ZESA was 
US$0.065 per kWh, while ZERC estimated the economic cost of providing the service at 
                                                      
31 The Zimbabwe Electricity Suppl y Authority (ZESA), the Zimbabwe  Electricity Transmission and 
Distribution Company (ZETDC) and the Zimbabwe Power Company (ZPC) form the ZESA Holding, a 
parastatal national power utility with a monopoly on the generation, transport, distribution, and marketing of 
electricity. WT/TPR/S/252 Trade Policy Review 
Page 90 
  
  US$0.098 per kWh;  and between US$0.12-15 per kW h for the generation cost of a new thermal plant 
based on coal, excluding the environmental cost.  These figures, coupled with other administrative costs, send a negative economic signal to poten tial private investors in power generation in 
Zimbabwe. 
(iv) Water 
153. Zimbabwe has limited renewable water resour ces, and generally depends on surface storage 
for its water needs.  The biggest consumer is agri culture (80%), followed by the urban and industrial 
sector (15%), rural (2%), conservation (2%), and mining (1%).  
154. In late 1990s, the share of the population w ith access to water and sanitation services was 
among the highest in sub-Saharan Africa.  However,  due to limited new inve stment and maintenance 
for services, and inadequate revenues for the in stitutions providing services over the last decade, 
water supply and sanitation systems in many ur ban and rural areas have deteriorated, and 
water-dependent businesses have been affected by s hortages.  Sewerage systems have experienced 
massive blockages, and water treatme nt plants have become dysfunctional, and lack chemicals;  many 
distribution networks have fallen into disrepairs.  The inability of the electric power system to deliver 
and sustain a reliable and regular supply of el ectricity has compounded problems in the water 
subsector and contributed to the breakdown.  A ccess to safer water and improved sanitation declined 
to 74% and 41% of the population from their respective peaks of 85% and 68% in 2000, causing a serious nationwide cholera epidemic in 2008 that claimed over 4,000 lives and affected more than 
100,000 people.
32 
155. There is no single document on the regulatory framework for the management of the 
Zimbabwe's water resources and the provision of  water and sanitation.  A number of Acts of 
Parliament have addressed various aspects of policy, organization, and management of the sector.  These include the Zimbabwe National Water Authority  Act of 1996, which established the Zimbabwe 
Water Authority (ZINWA);  and the Water Ac t and the National Water Authority Act, both 
promulgated in 1998, to regulate the management of  water resources.  The regulation of water and 
sanitation is also guided by the Land Acquisition Ac t of 2000, the Mines and Minerals Acts, Urban 
Councils Act, the Rural District Counc ils Act, and the Environment Act.  
156. Although more than 70% of Zimbabwe's water resources come from shared river basins with 
other member of the SADC, the Water Act does not ma ke any reference to issues of regional interest.  
However, Zimbabwe cooperates with other member s of SADC on the shared management of the 
region's river systems;  it is a signatory to the Sh ared Water Course Systems Protocol, which provides 
the basis for management of the international rivers in the SADC countries, and it is an active member 
of the Limpopo and Zambezi basin communities, wh ich oversee joint management of these rivers.  
157. Under the Water Act, the Minister of Wate r Resources Development and Management is 
responsible for the development of policies to ensu re the availability of water and its equitable and 
efficient allocation, subject to quality and environm ental requirements.  The Minister regulates quality 
and consumer-protection standards for water supply by any person and ensures that affordable clear 
water reaches underprivileged communities. 
158. The sector's pricing system is administered by the Ministry in charge of the economy via a 
Tariff Monitoring Committee, which includes repre sentatives from the Ministry in charge of the 
                                                      
32 Government of Zimbabwe (2009). Zimbabwe WT/TPR/S/252 
 Page 91 
 
 
  Economy, the Ministry in charge of Energy, the Ministry in charge of Water, the Ministry in charge of 
Finance, the Ministry in charge of the Budget, and the private sector. 
159. The Government intends to introduce a regulat ory framework on water and to assure quality; 
to establish an independent Water and Sanitati on Regulatory Commission to ensure appropriate 
pricing of water;  and to review allied Acts such  as the Mines and Minerals Act, urban Councils Act, 
Rural District Councils Act, Environmental Manageme nt Act, and other regulations that govern water 
and sanitation with a view to aligning thei r relevant provisions on the Water Act. 
(4) MANUFACTURING SECTOR  
(i) Overview 
160. Manufacturing accounted for 15% of formal employment and up to 25% of GDP between 
1980 and 1990, but the sector has compressed  to about 15% in the last decade. 
161. Compared with most African countries, Zimbabwe's manufacturing sector is relatively large 
and well-diversified.  It has strong direct linkages with the agriculture sector, to which it supplies 50% 
of its output in the form of fertilizers, feed-sto ck, and insecticides, while obtaining 63% of its input 
from agriculture.  Manufacturing also provides in puts and consumer goods to mining industries and 
processes minerals for export.33   
162. The sector has struggled in line with the decline in economic activity over the past ten years, 
losing almost 50% of its output, largely due to the hyperinflationary environment, shortage of foreign 
exchange, lack of funding for capitalization pur poses, unreliable utility and energy supplies 
(electricity, water, fuel, coal), and price distor tions arising from price controls and hyperinflation.34    
163. The sector grew by 3% in 2010 after a decade of deindustrialization.  Growth in 
manufacturing subsectors was subdued, with food production (0.5%), textiles and ginning (0.4%), 
chemical and petroleum products (0.3%), paper,  printing, and publishing (0.2%), and other 
manufactured products (0.1%).  Like other sectors, manufacturing has suffered from Zimbabwe's socio-political crisis in the last decade, and value-added has fallen considerably.
35  Processing units 
were cut off from their sources of supply, which made  it difficult to operate.  The sector is currently 
characterized by low capacity u tilization and poor competitiveness.  
(ii) Industrial policy 
164. The Ministry of Industry and Commerce is responsible for the formulation and 
implementation of industrial policy (Chapter II).  The main vision of the industrial policy is to 
transform Zimbabwe from a producer of primary goods into a producer of processed value-added 
goods for both the domestic and export market.    
165. According to the authorities, the manufactur ing sector faces international competitiveness 
challenges due to, inter alia , high production costs related to ve ry old plant and equipment, power 
shortages, exorbitant utility tariffs , higher-than-regional tax structure, and lack of working capital.  A 
major challenge is access to capital for recapitalization;  another is lack of technology, as products are 
becoming less competitive.  Infrastru cture also needs to be upgraded .  Due to supply-side challenges 
                                                      
33 Confederation of Zimbabwe Industries (2009). 
34 Confederation of Zimbabwe Industries (2010). 
35 UNIDO (2010). WT/TPR/S/252 Trade Policy Review 
Page 92 
  
  inflicted by the political crisis, the manufacturing sect or has almost collapsed.  Zimbabwe's wage rate 
is not high for the region;  the minimum wage is lower than that of South Africa and Zambia.  The 
wage burden is high because more labour is needed to compensate for the old equipment being used.  
166. Zimbabwe's Industrial Development Policy 2 011-2015 calls for the revitalization of the 
manufacturing sector by addressing the factors hindering its expansion.  The Government aims to 
create a vibrant, self-sustaining and competitive ec onomy through the promoti on of viable industrial 
and commercial sectors as well as domestic and international trade. 
167. Since 2010, a number of actions have been take n with the overall objective of restoring the 
manufacturing sector's contribution to GDP from the current 15% to 30%, and to exports from 26% to 
50% by 2015.  The Government plans to re-e quip and replace obsolete machinery with new 
technologies to enhanced value-added;  promote the use of local raw materials in the production of 
goods;  and to increase capacity utilization from around 43 % to over 90% by the end of the period.   
168. According to the authorities, the following measu res have been implemented:  sourcing of 
funds for distressed companies (several companies have benefited);  discour agement of exports of 
equipment used by local industry (most was origin ally imported) – export requires a permit, which 
would be granted if the equipment is to be replaced ;  deferment of VAT for up to three months.  The 
duty on certain raw materials is currently being revi ewed with a view to reducing import barriers that 
reduce the competitiveness of local industry. 
169. The new policy is to increase effective protec tion through enhanced tariff escalation.  The 
Government has identified four key industries to  be the driver and pillar of the manufacturing 
development policy for 2011-2015.  These are:  agri-processing (food and beverages, clothing and 
textiles, wood and furniture);  fertilizer industry;  pharmaceuticals and metals;  and electrical.  The 
criteria for priority in implementation are:  the expected contribution to GDP;  job creation and job retention;  levels of export earnings;  potential fo r value added, and forward plus backward linkages 
with other sectors of the national economy.
36 
170. According to the recent manufacturing survey conducted by the Confederation of Zimbabwe 
Industries, in contrast to the 1980s and 1990s, Zimbabwe's industries now buy more than 40% of 
inputs and sell at least a quarter of production abroad.  In some branches, the sector faces strong competition from informally produced and smuggled goods , in particular in the textile and clothing 
and basic cereal product industries, where the in formal sector and smuggling are believed to account 
for around 20% of production.
37 
171. Several measures influence international trade in the manufacturing sector.  In addition to 
tariffs and import surcharges, other trade policy measures affecting the sector include the duty 
drawback and inward processing rebate schemes,  import and export licensing, end-use tariff 
concessions on various imported inputs, and capital goods surcharge suspensions (Chapter III(2)).  
Tariff rates on manufacturing products average 15.4%.  Some of the more important branches (food 
products, beverages, tobacco, w ood and wood products) are protected by tariffs ranging from 10% to 
140%, as well as other import levies and taxes (Chapter  III(2) and (3), Chart IV.2 and Table AIV.1).   
                                                      
36 Ministry of Industry and Commerce (2010b). 
37 Confederation of Zimbabwe Industries (2010). Zimbabwe WT/TPR/S/252 
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  172. To help companies confronted with the severe credit and liquid ity shortage, Zimbabwe has set 
up a financing mechanism to support industries and those in difficulty via loans granted by the 
Zimbabwe Economic and Trade Revival Facility (ZETREF) (Chapter III(3)).38  
173. The Government also intends to revitalize and support small and medium enterprises (SMEs).  
It intends to conduct a census a nd establish a database of all SM Es,  to cover issues such as 
employment, product varieties, concentration, numbers of SMEs, and other relevant economic 
indicators, including the contribution of the SMEs to overall economic growth of the country.  It will support investment and growth in SMEs, and will recapitalize the Small Enterprise Development 
Corporation (SEDCO), which will play the role of training, financing, and incubating SMEs.
39  
(iii) Policy by subsector 
(a) Food products and beverage 
174. An analysis by principal industry reveals important differences in terms of trade policy and 
performance.  Unlike most other manufacturing industries, the beverages industry succeeded in 
increasing its value added between 2000 and 2010.  Zimbabwe has a dozen breweries whose main 
products are beer and aerated be verages (including mineral water).   Local inputs include sugar, 
bottles, stoppers and labels, and packaging;  on the ot her hand, barley and (barley) malt are imported.  
The customs duties on imports of competing beverage  products average 66.2%, with a rate of 76.7% 
on wines and 81.4% on non-alcoholic  beverages and mineral water (Chapter III(2) and Chart IV.2). 
175. The food industry, which is heavily depe ndent on domestic agricultural production, 
contracted sharply in the last decade follo wing the near collapse of agriculture due, inter alia , to the 
fast track land reform programme and erratic weat her (drought and shortage of inputs (fertilizer)).  
The Government maintained price controls on some  food products;  and aerated beverages are among 
the few remaining items on the import licensing list (Chapter III).  
(b) Clothing and textile 
176. In the past, Zimbabwe's clothing and textiles industry was well developed, producing a wide 
range of products, including variou s yarns, shoe laces, twines, co rds, school uniforms, socks and 
hosiery, sanitary pads, cotton wool, undergarments, clothing, blankets, and carpets.  The industry, 
which is vertically integrated, combining cotton production, ginning and oil mills, together with 
spinning, weaving and finishing (for printing, synt hetic fibre, dyeing and bleaching fabrics), has 
shrunk considerably in recent decades. 
177. The textile industry is protected by an average tariff rate of nearly 22% (Table AIV.1).  
Zimbabwe enjoys preferential access on clothing to  most parts of the world (COMESA, EU, the 
United States but Zimbabwe does not qualify for AGOA) on a "single transformation" basis.  
However, the "double transformation" provision in the SADC rule of origin on clothing appears to be 
                                                      
38 ZETREF is the Government's initiative (in collabo ration with the Africa Export and Import Bank) 
available to Zimbabwean registered companies (includi ng medium and small enterprises).  It is aimed at 
supporting industries' effort s to recapitalize, as well as restore un der-utilized production ca pacity potential 
through the acquisition of equipment and capital goods. 
39 Government of Zimbabwe (2009). WT/TPR/S/252 Trade Policy Review 
Page 94 
  
  restrictive.40  Zimbabwe is seeking to relax this rule through requests for waivers and derogation.  The 
Government also intends to tighten qualit y control and close loopholes on smuggling and 
counterfeiting, which it claims render lo cally manufactured goods uncompetitive.  
178. Policy changes are having a profound impact on th e textiles and clothing industries.  Cotton 
lint was previously a controlled commodity:  the Cotton Marketing Board (CMB) set prices to 
domestic spinners and held a monopoly on internati onal trade.  The set prices tended to be below 
available world prices, and the regime thus had the effect of subsidizing the supply of cotton lint to 
the domestic spinning industry.  Since early 1994, the CMB selling price for the domestic industry has 
reflected the world price, based on an export parity calculation;  this reform has been reversed from 
time to time.  
(c) Fertilizers and pesticides 
179. The fertilizer industry is well developed and h as a cross-linked ownership structure.  By 
virtue of its links to other sectors, the fertilizer  and chemical industry is a leading industry in 
manufacturing and the Zimbabwean economy in general.   According to the authorities, about 32% of 
fertilizer and chemical supplies are produced locally.  Fertilizer and pesticide imports are subject to an 
average tariff of 5%, and imports of other ch emicals products to an average tariff of 10.1% 
(Table AIV.1). 
180. The Government's new industrial policy is to support fertilizer production through new 
technologies such as coal gasification and coal bed me thane gas.  It is among the industries targeted 
for import substitution by means of ince ntive schemes and escalatory tariffs.  
(d) Metals and metal products 
181. The metals processing subsector provides strong forward and backward linkages to sectors 
such as agriculture, mining, construction, transport, and machinery.   
182. The Government has been heavily involved in  iron and steel through the Zimbabwe Iron and 
Steel Company (ZISCOSTEEL), which is state-owned and received government subsidies equal to as 
much as 1.6% of GDP in the 1990s.  The industry has not been performing well, and has been on the 
verge of collapse since 2009 due to the clos ure of production plants at ZISCOSTEEL, which 
accounted for 80% of total productio n of metals and metal products. 
183. ZISCOSTEEL has been transferred into private ha nds and is expected to be fully operational 
by end 2011.  This will increase production to a bout 500,000 tonnes of steel within 12 months, and 
full capacity of 1.2 million tonnes within 27 mont hs.  Prior to restructuring the company was 
exempted from all duties and taxes, and from the obligation to market minerals through MMCZ;  it 
was also exempted from the "use it or lose it" mini ng rights provisions during its recovery period. 
184. Currently, the average applied tariff of 9.2% on iron and steel (ISIC 371), is below the 
average for manufacturing (of 15.4%);  while th e average tariff on fabricated metal products 
(ISIC 381) at 20.5%, is higher than the manufactur ing average (Table AIV.1 and Chapter III(2)).   
 
                                                      
40 Single transformation implies that the garment must be manufactured in Zimbabwe, while double 
transformation means that in order to benefit from preferential access, cl othing must be manufactured within 
Zimbabwe, from fabric manufactured within SADC. Zimbabwe WT/TPR/S/252 
 Page 95 
 
 
  010203040506070
311
312313
314*
321
322
323324331332341342351352353354355
356
361362369371372381382383384385
390Chart IV.2
Tariff protection in the manufacturing sector, 2011
Per cent
WTO Secretariat calculations, based on data provided by the Zimbabwean authorities.International Standard Industrial Classification, Revision 2
Source :311
312
313314*
321
322
323
324
331
332
341
342351
352Description
Food production
Other food products and animal feeds
BeveragesTobacco manufacturing (only non-zero specific rates are 
applied)
Textiles
Manufacture of wearing apparel, except footwear
Leather products, except footwear and wearing 
apparelFootwear, except vulcanized rubber or plastic footwear
Wood and wood products, except furniture
Manufacture of furniture and fixtures, except primarily of  metal
Paper and paper products
Printing, publishing and allied industriesIndustrial chemicals
Other chemicals, including pharmaceutical
Petroleum refineries Description
Manufacture of miscellaneous petroleum and coal
products
Manufacture of rubber products n.e.s.Manufacture of plastic products n.e.s.
Pottery, china and earthenware
Manufacture of glass and glass products
Other non-metallic mineral products
Iron and steel basic industries
Non-ferrous metal basic industriesFabricated metal products, except machinery and 
equipment
Non-electrical machinery including computersElectrical machinery apparatus, appliances and 
supplies
Transport equipmentProfessional and scientific equipment
Other manufacturing industries354
355
356
361
362
369
371
372381
382
383
384
385
390Tariff average on 
manufacturing 
products
15.4not available
 WT/TPR/S/252 Trade Policy Review 
Page 96 
  
  (e) Other industries 
185. The wood and timber industries contribute 4% of  the total value of agri-industrial products 
and employ about 25,000 persons.  The furniture  industry (especially the home industries) is 
recovering and expanding more rapi dly more than the wood subsector .  However, due to the political 
and financial crisis, the main enterprises Mutare Board Paper Mills, Hunyani Norton (manufacture of 
papers company) operating in the subsector lack  the financial underpinning to make the necessary 
investment to improve their competitiveness.  The ti mber processing industry is protected by customs 
duties averaging 25% with tariff rates ranging from 5% to 40% (Table AIV.1).  
186. Zimbabwe's pharmaceutical industry is second to South Africa, both in size and development, 
in the SADC region, producing more the 65% of the essential drugs list, and less than 15% of 
Zimbabwe's special essential drugs  list.  The industry has performed poorly due to the prevailing 
economic situation, characterized by lack of trade finances, competition from imported drugs, drug donations, declining Government spending on drugs,  prolonged registration times (about 24 months), 
and electrical power shortages.  The lack of credit lines hampered the industry's ability to participate 
significantly in the export market.  
187. Pharmaceutical products receive low tariff protec tion, for instance, drug and medicine imports 
are subject to an average tariff of 4.2%. 
(5) S
ERVICES  
(i) Overview 
188. Services is the largest sector in Zimbabwe (Chapt er I).  It has been negatively affected by the 
crisis, but its GDP share has increased due mostly to the more severe decline of the other key sectors 
(agriculture and manufacturing).  In absolute term s, financial services, telecommunications, tourism, 
transport, construction, infrastructure, and related engineering services have been more affected by the 
crisis than other services categories.  Nonetheless, in relative terms, the contribution of transport and 
telecommunications to GDP almost doubled, from 8% in 2000 to 15.2% in 2009, while tourism 
accounted for 6% of GDP and 10% of foreign exch ange earnings.  The financial services subsector 
remains developed, and the Zimbabwe Stock Exchange is one of the leading stock markets in Africa.  
Education is well organized in developing human ca pital:  over 90% of Zimbabweans are literate, and 
the country was ranked first in Africa in 2010 by the United Nations. 
189. Zimbabwe is a net services importer.  Trav el (tourism) has dominated services exports, 
illustrating the country's importance as a tourist a ttraction, while transportation has been the main 
service import, reflecting long distances from key markets.  More efficient services delivery is a 
government priority;  however, state intervention remains significant, rendering the supply of key services inefficient and costly.  Companies suppl ying services are subject to several taxes and 
controls. 
190. Zimbabwe's specific commitments in Uruguay Round covered only three services sectors:  
financial services (insurance and insurance-related services, and banking and other financial services);  
tourism;  and telecommunication services.
41  Zimbabwe's Schedule includes some horizontal 
restrictions on market access applying to all three sectors;  and some sector-specific commitments, mainly in financial services and telecommunications .  The horizontal restrictions on market access 
limit foreign investors (mode 3) seeking to acquire shares in companies listed on the Zimbabwe Stock 
                                                      
41 WTO document GATS/SC/94, 15 April 1994. Zimbabwe WT/TPR/S/252 
 Page 97 
 
 
  Exchange to a maximum of 25%, and 5% of shares per single investor.  Foreign investors bringing in 
hard currency may invest a maximum of 15% of their assets in primary issues of bonds and stocks.  With respect to modes 3 and 4, the market access restrictions also apply to temporary presence for 
intra-corporate transferees (ICT)
42, and for those engaged in the supply of certain services;  as well as 
financial services related to lending, financial leas ing, payment, guarantees, and commitments, money 
transmissions services including credit, charge, an d debit cards, travellers  cheques, and bankers 
drafts.43 
191. Limitations on national treatment relate to tourist guide services.  Foreign-based tour 
operators must pay park-entry fees in foreign curre ncy and only locally registered safari operators 
may obtain concessions to offer hunts through "leasing", or auctions by which hunting areas are 
leased out.44 
192. Zimbabwe did not participate in the extended negotiations on basic telecommunications or on 
financial services, or otherwise upgrade its GATS commi tments (in any sector).  However, in 1999, it 
accepted the Fourth Protocol (basic telecommunica tions) and the reference paper, and the Fifth 
Protocol (financial services), but did not commit to op en a number of subsectors to full competition.  
It continues to impose restrictions on foreign invest ment, particularly in the data-transmission-related 
subsector, including packet-switched data transmi ssion and circuit-switched data transmission.  
Zimbabwe grants MFN treatment in services to all WTO Members.  It did not list any exemption to the principle of MFN treatment.
45  In June 2009, Zimbabwe adopted, along with other COMESA 
members, the Regional Regulations governing trade in services.  Accordingly, Zimbabwe adopted the 
Rules and Procedures of the Committee on Trade in Services and the Guidelines for Services 
Negotiations under the regulations of COMESA in September 2009. 
193. Notwithstanding the limitations set out in Zimbabwe's Schedule, the authorities view services 
liberalization as important in attracting foreign inv estment and developing infrastructure.  However, 
this has not yet resulted in any decisi ons to further open the services sectors. 
(ii) Financial services 
194. Zimbabwe has a well-developed banking and fina ncial infrastructure, arguably second only to 
South Africa in terms of depth and skills in the region.  The sector covers the Reserve Bank of 
Zimbabwe, major international and domestic commercial banks, venture capital companies, 
development banks, a number of merchant banks  and discount houses providing financial services 
such as medium-term loan finance, foreign mark et transactions, equity issues, stock exchange 
transactions, portfolio management, company broking, corporate restructuring, etc.  The state-owned 
Agribank provides agricultural loan financing.46  Commercial banks are the largest segment of the 
financial sector followed by life insurance companies.  There are two state-owned banks in Zimbabwe;  all other banks are privately owned (Table IV.15). 
                                                      
42 An intra-corporate transferee (ICT) is an employ ee of a foreign firm, who is temporarily transferred 
to an affiliate of that firm (branch subsidiary, office, joint-venture, etc.) in Zimbabwe.  Zimbabwe's schedule does not provide distinction for ICT of managers, executives, and specialists.  The quantitative limitations as 
presented in the Schedule are broad and unclear. 
43 WTO document GATS/SC/94, 15 April 1994. 
44 WTO document GATS/SC/94, 15 April 1994. 
45 WTO document GATS/SC/94, 15 April 1994. 
46 Republic of Zimbabwe (2009), p. 15. WT/TPR/S/252 Trade Policy Review 
Page 98 
  
  195. The Zimbabwean economy has been declining pr ogressively for the past decade, reflecting 
underperformance in the broad sectors of the economy including the financial sector.  The financial 
sector fell back "into territories of indiscipline a nd general malaise" with inflation rocketing to 
5 billion per cent, and people becoming instant "multi-sextillionaires" from doing nothing other than 
stringing-up "connections".47  The IMF described Zimbabwe's ci rcumstances as "grave" in 2009.48 
196. Against the backdrop of the economic and financia l situation, the Monetary Policy aims to:  
undertake currency reforms, which could bring tran sactional convenience to the public;  remove the 
pricing distortions in the economy in a manner that  promotes producer viability;  streamline and end 
the Reserve Bank's quasi-fiscal operations, leaving it  with the core responsibilities of managing price 
stability factors, banking-sector licensing and supervis ion, in addition to offi cial foreign exchange 
reserves management;  liberalize the foreign exchange market with a view to making it  a strategic policy instrument for efficient  production and res ource allocation in the economy;  deepen financial 
sector stability by enhancing the prudential superv isory guidelines;  and adopt and  allow the 
circulation of multiple currencies in the economy. 
(a) Banking
49 
Overview 
197. Zimbabwe's banking sector comprises commerc ial banks, merchant ba nks, discount houses, 
finance houses, microfinance banks, building socie ties, a savings bank, a development bank, and 
microfinance institutions (Table IV.12).  The sect or did not escape the severe consequences of the 
economic and political crisis during the last decade:   it underwent a turbulent period, due mainly to 
liquidity and solvency challenges du, in part, to poor risk-management systems and weak corporate 
governance.  At end 2010, Zimbabwe had 24 banki ng institutions, down from 32 at end 2005, while 
microfinance institutions had shrunk by almost  50%, from 213 units in 2005 to 114 in 2010 
(Table IV.12).  
Table IV.12 
Structure of the banking sector, 2005-10 
Institution 2005 2006 2007 2008 2009 2010 
Commercial banks 13 14 14 15 14 15 
Merchant banks 5 5 5 6 7 5 
Discount houses 6 5 4 3 1 0 
Finance houses 4 3 1 0 0 0 
Building societies 4 4 4 4 4 4 
Total 32 31 28 28 26 24 
Savings banks 1 1 1 1 1 1 
Asset management companies 20 17 17 17 16 16 
Microfinance institutions 213 244 309 75 95 114 
Source:  Reserve Bank of Zimbabwe (RZB). 
198. Over the last decade, financial repression a nd high financing cost s not only discouraged 
investment but seriously hampered Zimbabwe's ec onomic growth.  Banking op erations in Zimbabwe 
                                                      
47 Reserve Bank of Zimbabwe (2009a). 
48 IMF (2009a). 
49 This section is based on Reserve Bank of Zimbabwe (2011). Zimbabwe WT/TPR/S/252 
 Page 99 
 
 
  have become inefficient and costly, and there has been significant government intervention and 
control.  
199. Following a spate of astronomical and unjustifia ble increases in bank charges, as well as 
continued disregard of moral suasion and advice to  uphold ethical banking practices, the RBZ set 
maximum thresholds for bank charges with effect fr om 4 October 2008 (Table IV.13).  The thresholds 
were prescribed in the Zimbabwe currency durin g the hyperinflationary period, and were removed 
after adoption of the multicurrency in February 2009. 
Table IV.13 
Maximum thresholds for bank charges, 2008 
 Effective 04.10.2008 Effective 13.11.2008 
Product/service charge Individuals Corporates Individuals Corporates 
Ledger fees (per transaction)  1,000 25,000 10,000 25,000 
Statement request  250 5,000 10,000 20,000 
Certificate of balance  250 5,000 10,000 25,000 
Monthly admin fee  100 1,000 10,000 10,000 
RTGS  500 500 1,000,000 1,000,000 
Inter-account transfer  1,000 5,000 500,000 500,000 
ATM withdrawals  50 15,000 10,000 .. 
Cheque book (50 leaf)  1,000 1,000,000 40,000,000 900,000,000 
Bank cheque  2,000 50,000 1,000,000 1,000,000 
Counter cheque  2,000 415,000 .. .. 
Unpaid cheque (refer to drawer)  1,000,000 10,000,000 2,000,000 50,000,000 
Unpaid cheque (technical irregulariti es)  10,000 1,000,000 500,000 5,000,000 
Unpaid cheque (effects not cleared)  10,000 1,000,000 500,000 5,000,000 
Stop payment  100,000 1,000,000 500,000 5,000,000 
Post dated cheque  20,000 1,000,000 500,000 5,000,000 
Stop orders  1,000 50,000 50,000 500,000 
Reactivation of dormant a/c  20,000 15,000,000 500,000 500,000,000 
Service fees (e.g. safe custody)  5,000 10,000 50,000 5,000,000 
POS Charges  1,000 1,000 10,000 10,000 
.. Not available. 
Source:  Various directives of the Reserve Bank of Zimbabwe. 
200. Prior to 2009, the RBZ had imposed limits on da ily cash withdrawals, with a view to curbing 
an illicit parallel market for foreign exchange .  The limit was increased from Z$5 billion to 
Z$10 billion for both individuals and companies, with effect from 4 June 2008.  (As the exchange rate 
(including on the parallel market) changed very frequen tly, it is difficult to compute US$ equivalents.)  
The thresholds are no longer in force. 
201. The liquidity and solvency challenges during 2003-04 were mostly attributed to non-
performing related-party and insider loans, esp ecially among owner-managed institutions.  These 
challenges negatively affected public confidence in the integrity of the system and Reserve Bank 
intervention was required to avert a total collapse of the system, via defaults on interbank obligations.  
The turbulence forced bank restructuring through liqui dation of assets, such as properties and equities;  
and consolidation through mergers and acquisitions. WT/TPR/S/252 Trade Policy Review 
Page 100 
  
  202. As part of liquidity assistance provided to st ruggling financial institutions, the Reserve Bank 
operated a Troubled Bank Fund in 2003-04 to assist in the rehabilitation of banks facing systemic 
risks;  it is no longer operational.  Institutions that  failed to resolve their liquidity challenges within a 
reasonable time were placed under the management of a curator in order to safeguard depositors' 
interests.  CFX Bank, Intermarket Banking Corpor ation, and National Discount House (NDH), which 
were placed under curatorship in 20 03 to 2004, were rehabilitated, while Barbican Bank, Royal Bank 
and Trust Bank, had their assets sold and transfer red to a newly formed bank, Zimbabwe Allied 
Banking Group (ZABG), in January 2005.  Four bank ing institutions, Century Discount House, Rapid 
Discount House, Sagit Finance House and First Na tional Building Society (FNBS) were liquidated 
after determination by the Reserve Bank that they were too insolvent and beyond any hope for 
rehabilitation. 
203. In an effort to consolidate the banking structur e and ensure compliance with regulatory capital 
requirements, the Reserve Bank of Zimbabwe appr oved a number of mergers and acquisitions:  ABC 
Asset Finance and ABC Discount House merged into the ABC Merchant Bank in 2006, while 
Kingdom Financial Holdings Limited and Meikles Af rica merged to form Kingdom Meikles Africa in 
2008.  Due to board room wrangles within the merged entity, the latter merger was unwound in 2010.  
TN Financial Services Limited acqui red Trust Finance House in 2007, and was itself acquired in 2009 
by Tedco Limited.  TN Finance House (TNFH) acq uired a controlling interest in TEDCO Limited (a 
furniture manufacturing and retailing company) through a reverse takeover in December 2009.  Also in 2007, ZB holdings Limited acqui red Intermarket Holding Limited,  while First Banking Corporation 
Limited acquired SARE.  In 2010, CBZ Holdings Li mited acquired Beverly Building Society:  the 
building society was divisionalized but retained its  operating licence.  Interfin Holdings Limited 
acquired CFX Financial Services Limited following  a rights issue, resulting in Interfin Banking 
Corporation merging its operations with CFX Bank to form Interfin Banking Corporation. 
204. In 2008, the Reserve Bank prescribed U.S. dolla r-linked capitalization levels for all classes of 
banking institutions;  Zimbabwe adopted a multiple currency regime in February 2009.  The banking 
sector was hence faced with a new operating environm ent characterized by general illiquidity in the 
market, unstable and short-term de posits, lack of tradeable money-market instruments, and the 
absence of the lender of last resort function.  Faced with reduced business volumes, discount houses 
and finance houses converted their operating licences  to higher classes of banking such as merchant 
and commercial banks:  ABC Merchant bank and Tr ustfin Discount House converted to commercial 
banks;  while Tetrad Securities (a discount house)  and NDH discount house became merchant banks.  
ZDB Financial Services Limited, a finance house w as also divisionalized into the Infrastructure 
Development Bank of Zimbabwe (IDBZ), after failing to meet the required minimum capital 
requirements of US$7.5 million.  
205. As a result of the restructuring and conversi on of licences, there are currently no discount 
houses or finance houses in Zimbabwe.  However, in  August 2010, a limited number of new licences 
were given back to institutions previously placed under curatorship.  The relicensing of Royal Bank, 
Trust Bank, and Barbican Bank called for the unbundling of the Zimbabwe Allied Banking Group 
(ZABG), which must return assets previously sold to  it by the curator during the troubled period.  The 
assets were transferred back to thei r respective institutions by 31 January 2011.  Trust Bank and Royal 
Bank have commenced banking operations. 
Regulatory framework 
206. The Reserve Bank of Zimbabwe (RBZ) is re sponsible for commercial bank regulation and 
supervision.  The operations of the Reserve Bank ar e governed by the Reserve Bank of Zimbabwe Act Zimbabwe WT/TPR/S/252 
 Page 101 
 
 
  (Chapter 22:15).  The Act provides the Reserve Ba nk powers to regulate and supervise the banking 
sector through the Banking Act, as the principal Ac t, and other legislation, such as the Building 
Societies Act (Table IV.14).  The Reserve Bank s ubscribes to international best practices on banking 
supervision, for example as prescribed by the Basel Committee on Bank Supervision.  The Reserve 
Bank has also adopted and implemented guidelines on best practices based on the King Report, FSI 
Guidance on Supervision, and Basel Core Principles on Supervision.   
Table IV.14 
Principal banking legislation  
Type of 
institution Statute Key requirements for establishing a 
domestic or foreign bank (e.g. minimum 
capital requirements) Key activities 
Commercial 
banks Banking Act (Chapter 24:20) 
Banking Regulations Statutory 
Instrument 205 of 2000 Minimum capital - US$12.5 million;  
shareholding structure complying with stipulated holding limits for individuals, 
financial, and non-financial entities;  
shareholders with capacity to provide adequate capital on an on-going basis;  
capital structure that does not prevent 
effective supervision;  sound corporate governance and risk-management structures 
and systems;  sound internal controls;  fit 
and proper board and senior management 
and principal shareholders;  viable business plan Accepting deposits 
withdrawable by cheque or otherwise;  
lending;  foreign 
exchange transactions;  money market 
instruments;  custodial 
services among others.  Activities are 
prescribed in section 7 
of the Banking Act (Chapter 24:20) 
Merchant banks Banking Act (Chapter 24:20) 
Banking Regulations Statutory 
Instrument 205 of 2000 Minimum capital - US$10 million 
Other requirements as above Issuance of bankers' 
acceptances;  
acceptance of deposits;  
trade finance;  corporate finance;  and 
advisory services 
Discount houses Banking Act (Chapter 24:20) 
Banking Regulations Statutory 
Instrument 205 of 2000 Minimum capital - US$7.5 million 
Other requirements as above Discounting of bills;  
short-term investments 
Finance houses Banking Act (Chapter 24:20) 
Banking Regulations Statutory 
Instrument 205 of 2000 Minimum capital - US$7.5 million 
Other requirements as above Hire-purchase 
financing and financial 
leasing or factoring 
Microfinance banks Banking Act (Chapter 24:20) 
Banking Regulations Statutory 
Instrument 205 of 2000 Minimum capital - US$1 million 
Other requirements as above The target market is the unbanked and 
under-banked communities Accepting deposits 
(time and savings);  
offering credit facilities 
and other ancillary 
banking activities prescribed in the 
Banking Act except 
offering checking accounts, foreign 
exchange transactions 
and speculative activities 
Building societies  Building Societies Act (Chapter 24:02) 
Banking Act (Chapter 24:20) Banking Regulations Statutory 
Instrument 205 of 2000 Minimum capital - US$10 million 
Other requirements as above Mortgage finance;  
savings accounts and 
investments 
POSB Post Office Savings Bank Act 
(Chapter 24:22) and some section of the 
Banking Act (Chapter 24:20) Not prescribed Lending, savings 
accounts, investments 
Table IV.14 (cont'd) WT/TPR/S/252 Trade Policy Review 
Page 102 
  
  Type of 
institution Statute Key requirements for establishing a 
domestic or foreign bank (e.g. minimum capital requirements) Key activities 
Asset 
management 
companies Asset Management Act (Chapter 24:26), 
Collective Investment Schemes Act 
(Chapter 24:19), and Collective Investment (Internal Schemes) 
Regulations 1998 
Some sections of the Banking Act 
(Chapter 24:20) were invoked to apply 
to asset management companies Minimum capital - US$0.5 million;  sound 
corporate governance and risk-management 
practices;  emphasis is on sound internal controls Fund management (unit 
trusts) and portfolio 
management 
Micro finance 
institutions and 
moneylending 
institutions Moneylending and Rates of Interest Act 
(Chapter 14:14) Minimum capital - US$5,000.00;  
shareholding structure complying with 
stipulated holding limits for individuals and 
entities;  shareholders with capacity to 
provide adequate capital on an ongoing basis;  sound corporate governance;  
structures and systems commensurate with 
the size of the instituti ons;  fit and proper 
board and senior mana gement and principal 
shareholders;  viable business plan  Credit only (lending) 
Source:   Reserve Bank of Zimbabwe. 
207. Various texts and statutes govern the operations of  the various financial institutions under the 
jurisdiction of the Reserve Bank of Zimbabwe (Table IV.14).   The authorities recognize that 
regulation and supervision of banki ng institutions are important to the stability of both domestic and 
international financial systems and to safeguard depositors' funds.   
208. In 2010, there were 16 registered commercial banks in Zimbabwe;  12 were domestic and 
6 foreign owned;  4 registered merchant banks (3 locally owned and 1 foreign owned – Ecobank);  
and 4 building societies (3 locally owned and 1 foreign owned – CABS).  Major banks, including 
CBZ, Stanbic, Stanchart, Banc ABC, and Barclays , all of which are privately owned, account for 
51.69% of total assets and have a strong presence in the country.  Foreign participation in these banks 
has increased, though not significantly since 2000 .  Requirements for establishing a domestic or 
foreign bank (e.g. minimum capital requirement s) are the same.  However, the opening of 
foreign-owned banking institutions is subject to additional requirements, such as compliance with 
Exchange Control and Indigenisati on regulations, as well as clearance with the Zimbabwe Investment 
Authority (ZIA).  Despite the adoption of the multip le currency regime, exchange control still applies 
when a foreign investor buys a stake in a local bank, in order to avoid a flight of capital through undervalued sale of shares abroad.  If a company's capitalization is above US$500,000, indigenization 
regulations apply (regardless of sect or);  all banks will have to comply, if they reach that threshold 
(and would likely require a local partner).  Banks mu st provide plans for compliance to the Ministry 
of Indigenisation.  All capital account transactions must be ratified by (the RBZ division of) Exchange 
Control, as the capital account is not yet liberalized.  In addition to the commercial banks and 
merchant banks, several private micro-finance ins titutions and moneylending institutions have been 
created to finance projects in specific sectors, to support SMEs, and to provide banking services to the 
"unbanked" sector of the population (Table IV.12 and Table IV.15). 
209. Foreign-owned banks may operate in Zimbabwe as :  branches of their foreign subsidiary but 
only with domestic registration;  subsidiaries of  their foreign parent (and legally constituted as 
domestic banks);  or as foreign representative offi ces.  Branches and subsidiaries are subject to the 
same supervisory requirements as domestic banks.  There are no foreign-representative offices in Zimbabwe.  Foreign branches are not allowed to operate;  they may enter only as subsidiaries.  
Foreign banks require local incorporation.  Zimbabwe WT/TPR/S/252 
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  Table IV.15  
Ownership structure of banking institutions, 30 September 2010 
(%) 
Banking Institutions Government shareholding  Local shareholding Foreign shareholding 
Commercial banks    
ABC Corp 0 46.17 53.83 
AGRIBANK 100 0 0 
BARCLAYS 0 32 68 
CBZ 25.81 42.93 31.26 
CFX BANK 8.52 91.48 0 
FBC 22.43 77.57 0 
IBC 0 100 0 
KINGDOM 0 100 0 
MBCA 0 23.31 76.69 
METROPOLITAN 0 40 60 
NMB BANK 0 64.04 35.96 
STANBIC 0 0 100 
STANCHART 0 0 100 
TN BANK 0 100 0 
ZABG 92 8 0 
ZB BNAK 64.45 32.55 0 
Merchant bank    
GENESIS 0 100 0 
INTERFIN 0 100 0 
PREMIER 0 46 54 
RENAISSANCE 0 100 0 
TETRAD 0 100 0 
Building societies    
CABS 0 0 100 
FBC BUILDING SO CIETY 40 60 0 
ZB BUILDING SOCIETY 0 100 0 
Saving banks    
POSB 100 0 0 
Source:  Reserve Bank of Zimbabwe. 
210. The banking sector is recovering in Zimbabwe.50  As of 30 September 2010, most banking 
institutions' balance sheets showed resilience to shoc ks with respect to all risk assessment factors, 
which include credit, sovereign, foreign exchange, interest rate, and liquidity risks.  Bank deposits 
have continued to grow by a monthly av erage of US$82 million, from US$298 million in 
January 2010 to US$2.3 billion in September 2010, implying improved confidence in the sector.  The 
increase in bank deposits, coupled with foreign shor t-term capital inflows, has strengthened the 
intermediation capacity of the financial sect or, with loans and advances increasing from 
US$0.76 billion in January 2010 to US$1.42 billion in  September 2010, resulting in an improvement 
of the loan-deposit ratio from 52.4% to 62.4%, compar ed with regional and inte rnational thresholds of 
over 75%.   
211. Short-term deposits (30-90 days, and excepti onally 180 days) still account for about 94% of 
total deposits.  This is a reflection of:  an inclina tion towards a cash economy;  generally low salaries;  
                                                      
50 Ministry of Finance (2011). WT/TPR/S/252 Trade Policy Review 
Page 104 
  
  and a sluggish money market with very limited fina ncial instruments.  Furthermore, bank spreads 
remain high, with average maximum annualized  lending rates unmoved at margins above 20%, 
against deposit rates close to zero.  While the gap be tween average real lending and borrowing rates is 
still too wide, suggesting room fo r improvement, nominal and real lending rates have also risen 
needlessly high in view of high and variab le inflation, discouraging saving deposits. 
212. The scale of the Zimbabwean banking system is li mited.  The sector has been recovering:  the 
solvency ratio equity to assets moved from 56.57%  in December 2008 to 15.82% in December 2010;  
and other major banking ratios (asset quality, liquidity, capital adequacy, etc.) also improved during the period (Table IV.16).  
Table IV.16 
Banking system performance, 2008-10 
(% and Z$) 
 December 2008 Decemb er 2009 December 2010 
Total balance sheet (Z$) 20,837,914,065 2,185,834,516 3,611,685,786 
Total deposits (Z$) 2,485,559,777 1,358,681,585 2,181,927,031 
Demand deposits (Z$) 2,439,004,121 792,605,659 1,178,136,170 
Foreign currency deposits (Z$) 207,622,988 86,028,379 129,507,838 
Deposits by enterprises .. .. .. 
Loans/deposits (%) 63.84 50.99 65.01 
Total loans (Z$) 1,586,871,127 692,844,395 1,583,501,329 
 (%) 
Doubtful debts rate  50 50 50 
Provisioning rate  .. .. .. 
Solvency ratio equity/assets 56.57 30.85 15.82 
Adversely classified/total loans 7.86 1.91 7.46 
Past due/total loans 20.92 12.40 18.60 
Capital adequacy    
Regulatory capital to risk-weighted assets 43.45 21.61 15.25 
Percentage of banks greater or  equal to 10% 92.86 100 88.20 
Percentage of banks below 10% a nd above 6% minimum .. .. .. 
Percentage of banks below 6% minimum 7.14 .. 12.50 
Capital to assets 41.67 11.96 9.39 
Asset quality    
Foreign exchange loans to total loans 0 2.94 1.12 
Past-due loans to gross loans 59.50 19.87 16.05 
Non-performing loans 6.53 1.82 3.08 
Watch-listed loans 52.97 18.04 12.97 
Provisions as % of past-due loans 4.43 10.78 10.75 
Liquidity    
Liquid assets/total assets 15.87 40.71 30.78 
Liquid assets/short-term lia bilities 90.04 55.88 37.52 
Loans/deposits 73.10 48.06 79.09 
Liquid assets/total deposits 67.65 61.66 51.83 
Foreign exchange liabilities/tota l liabilities 4.53  4.82 4.39 
.. Not available. 
Source : Reserve Bank of Zimbabwe. Zimbabwe WT/TPR/S/252 
 Page 105 
 
 
  (b) Zimbabwe Stock Exchange 
213. The ZSE has been open to foreign investment since 1993 and lists over 65 securities.  The 
repealed Zimbabwe Stock Exchange Act (Chapter 24:18) of 1973 provided for foreign participation 
on the ZSE with limits of 10% per individual and a coll ective foreign threshold of not more than 40%.  
These thresholds are still in place.  The ZSE has b een a major source of money creation, driving 
money supply into the national economy.  There ar e two indices:  the Zimbabwe Mining Index and 
the Zimbabwe Industrial Index.   
214. After a downward trend and a temporary closur e of the ZSE, due to a settlement gridlock 
during the period 19 November 2008 to 17 February 2009, stocks activities have generally been on 
the rise since 2009 due mainly to the introduction of  the multi-currency system.  When multi-currency 
trading began on the ZSE in February 2009, the indu strial and mining indices were both re-set at a 
base of 100%;  they have since risen to 167.10% and 171.32%, respectively.  In addition, in order to 
curb the fraudulent speculative behaviour that had gripped the stock market in 2008, the Reserve 
Bank of Zimbabwe introduced restrictive measur es, such as cancellation of provision for unsecured 
accommodation to all banks;  suspension from the cl earing house of any bank that failed to fund its 
clearing obligations;  blacklisting of companies and stock-broking firms that issued fraudulent 
cheques;  and cancellation of the trading licence of any bank involved in the issuance of fraudulent bank cheques.  The improved performance, in volume a nd share prices, is reflected in the increase in 
market capitalization, from US$1.5 billion in Februa ry 2009, to currently about US$4.3 billion.   
215. New listing rules, a central securities depos itory, and securities regulations are being 
promulgated to conform to similar laws being impl emented by other SADC members.  The Securities 
Act (Chapter 24:25), which repealed the Zimbabwe Stock Exchange Act, is also being amended in 
order to develop the legislation governing the regula tions of capital markets in Zimbabwe.  This will 
make it easier for companies to seek dual listing in any of the SADC states.  The ZSE is an active 
member of the SADC Stock Exchange Comm ittee (SADC COSSE), which includes Botswana, 
South Africa, Mauritius, Zambia, Lesotho, and Namibia. 
(c) Insurance
51 
216. Zimbabwe's insurance industry comprises long-te rm (mostly life) insurance, short-term 
insurance (corporate, general, personal, motor vehicle,  fire, transport), and reinsurance.  At the end of 
2010, there were 26 registered and operating direct insurers and 8 reinsurers, down from a total of 
88 registered insurance companies in 2001.  Si nce 2009, short-term insurance business has been 
growing, due to growth in motor, fire, and misce llaneous insurance services.   Gross premiums written 
(GPW) by direct insurers increased by 36.13 % from US$60.13 million in 2009 to US$83.12 million 
in 2010, while reinsurance business recorded GPW growth of 37% over the same period. 
217. Main insurance groups such as Old Mutual, FML,  Zimre, ZB Re, FBC Re, CEZ, and Altfin 
have close ties  with Zimbabwe's main commercial banks.  A number of financial conglomerates have 
insurance or banking subsidiaries (and vice versa).  Old Mutual owns CABS Building Society;  Zimre 
has shareholding in Genesis;  ZB Bank has ZB  insurance companies;  CBZ Bank has insurance 
subsidiaries;  Interfin Bank owns Altfin insura nce;  Renaissance Holdings is in banking and 
insurance;  and FBC Bank is also in insurance.  Most insurance companies in Zimbabwe are owned 
by indigenous people, except for Old Mutual and Eagle Insurance.  Conditions of establishment are 
spelt out in the Insurance Act (Chapter 24:07)  and the respective principal regulations.   
                                                      
51 This section is based on Insurance and Pensions Commission (2010). WT/TPR/S/252 Trade Policy Review 
Page 106 
  
  218. During 2000-09, performance in the insurance sector, like that of banking sector, was weak, 
reflecting a worsening economic environment and an unstable equity market.  In terms of the GPW, 
fire, motor, and miscellaneous accident insurances dominate the business, for both direct insurance 
and reinsurance.  Because of the severe economic conditions, some insurers were undercapitalized;  
and insurance companies went bankrupt.   The In surance and Pensions Commission, the regulatory 
authority for the insurance industry, has instructed all institutions that have shown signs of financial 
weakness to take the necessary corrective action.  Due also to the global financial crisis, the 
supervisory authority has strengthe ned supervision of the most important insurance groups, to identify 
any potential problems and threats.  In 2010, all undercapitalized institutions were de-registered.  
219. Every insurer or reinsurer is required to be registered for a specific class or classes of 
business, i.e. assistance, disability, fu nd, health, life, and/or sinking fund.  The requirements are the 
same for all national companies and the legislat ion prohibits foreign ownership of insurance 
companies.   
220. Minimum capital requirements are set at US$500,000 for long-term insurers and US$300,000 
for short-term insurers (for one or more kinds of short-term insurance policies).  Before an applicant is 
registered as a long-term or short-term insurer, th e company auditors must confirm that the required 
capital has been paid.  The Registrar must be sat isfied that the proposed shareholders have the 
financial means to provide the minimum start-up  capital as well as the ability to provide further 
capital to the insurer when required.52 
221. Reinsurers are required to register in Zimbabwe  in order to conduct business in the country.  
However, Zimbabwean insurance co mpanies often enter into reinsu rance arrangements with foreign 
reinsurers.  In order for this reinsurance to  be acknowledged for purposes of capital adequacy 
requirements, the foreign reinsurer must provide secu rity in the form of a monetary deposit with the 
Zimbabwean primary insurer or an irrevocable guara ntee or a letter of credit issued by a Zimbabwean 
bank.  
222. Acquisition of 25% or more of the value of the sh ares in a registered insurer, by nationals or 
foreigners, requires the written approval of the Regist rar of Insurance.  Application for approval to 
acquire control over an insurance company requir es information similar to that required when 
applying for registration; the application is treat ed in the same manner as a new application for 
registration of an insurer.  Power to approve an a pplication for acquisition of a controlling share in an 
insurance company is vest ed in the Insurance and Pensions Commission. 
223. Motor third-party, bodily injury, and death cove r are compulsory in Zimbabwe.  The workers' 
compensation insurance is compulsory under the Nati onal Social Security Authority (NSSA), but this 
is not the case for private insurance companies.   Zimbabwean residents may purchase policies from 
non-resident insurance companies.  However, foreign insurers may not solicit business in Zimbabwe.  
Short-term insurance 
224. The short-term insurance market in Zimbabwe reflects an oligopoly market structure, with 
seven companies (29% of short-term insurance co mpanies) accounting for 72% and 70% of the total 
GPW and Net Premium Written (NPW) respectively in 2010. 
225. Direct insurers had shareholder equity to talling US$37.83 million on 30 September 2010, up 
16.5% on the 30 June 2010 figure of  US$32.49 million.  Fourteen direct insurers (58.3% of the 
                                                      
52 Statutory Instrument 183, 2009. Zimbabwe WT/TPR/S/252 
 Page 107 
 
 
  market) had a combined total capital of US$4.57 m illion, representing 12% of the total capital;  seven 
of these insurers, representing 30% of the market, were inadequately capitalized, with capital below 
the minimum requirement of US$300,000.53  Their solvency ratio was 52.8%, well above the 25% 
generally regarded as the accepted minimum for a fi nancially sound short-term insurer.  However, 
three institutions had solvency ratios below 25%.54   
226. The deterioration of the solvency risk ratio, from 80% at the end of the second quarter 2010 to 
51% at end of the third quarter, reflected inadequa cy in the capitalization of some direct insurance 
companies, in terms of minimum requirements, and in the level of business they were underwriting.  
The gap between the growth of GPW, of 38%, and of  total capital, of 16%, reinforces the need for the 
industry to recapitalize. 
227. The authorities, through the Insurance and Pe nsions Commission, recognize that the legal 
minimum capital requirement for the insurance i ndustry as a whole is significantly below the level 
necessary for underwriting the volumes of business that  would sustain the insurers' operations on an 
economic level.  The level is also low by regional and international standards.  In addition, most of the 
industry's assets were lost when their value fell w ith the introduction of the multi-currency regime;  
with under-priced equities;  and the deterioration of  real property markets.  The low level of the 
capital was set to allow adjustment to the dollarized  economy.  The authorities plan to increase the 
minimum capital for short-term insurers to be tween US$1,000,000 and US$1,500,000 in the near 
future from the current US$300,000. 
228. The asset quality of the short-term insurance co mpanies affects their ability to meet claims 
liabilities.  With current assets representing only 36% of  the total assets, the asset profile continues to 
be skewed towards non-current assets (60%);  cash and cash equivalent assets form 6% of total assets 
and 17% of current assets, respectively.  The insurers  need to align their balance sheets so that they 
are skewed towards current assets in  line with the nature of their business to enable them to meet 
claims timeously. 
Reinsurance 
229. With a market share of more than 70% in terms of both the GPW and NPW, three of the 
eight registered companies dominated the sector as at 30 September 2010.  Fire insurance accounted 
for 37% of GPW, followed by motor (16%), and mi scellaneous accident (24%).  As motor business 
constituted the biggest percentage of direct insuranc e business, there is more risk retention for motor 
than for fire insurance. 
230. As at 30 September 2010, the short-term reinsurance industry had a capital base of 
US$50.18 million and the eight reinsurers were ad equately capitalized, meeting the legal minimum 
level of US$400,000.  Their average solvency ratio  is 212%, within a range of 34% to over 700%;  
however, the structure of the assets is skewed towa rds non-current assets (63% of the total, while the 
current assets only cover 29%).  The pattern is the same as for direct short-term insurers, which 
heightens the inherent liquidity risk in the industr y.  The Commission intends to set a statutory reserve 
of no less than 50% of the minimum capital require ment.  On average, the industry retains 63% of 
written business. 
                                                      
53 The Statutory Instrument 183, 2009, fixes the minimum capital requirement of short-term insurance 
companies at US$300,000. 
54 The solvency ratio is defined here as total capital divided by total liabilities. WT/TPR/S/252 Trade Policy Review 
Page 108 
  
  (iii) Post and telecommunication services 
(a) Overview 
231. Three mobile cellular services operators curren tly provide services in Zimbabwe and one has 
been granted a licence to begin offering the servi ces;  there is only one fixed telephone service 
provider and no wholesale market in backbone capacity .  A national backbone is not yet available.  
Each operator has their own network, resulting in a fragmented wholesale market, and is responsible 
for national and international traffic for their networ k.  TelOne is licensed to operate international 
gateway services but is not carrying out these operati ons.  Econet Wireless has its own International 
Gateway.  Operators continue to use very expensiv e satellite links for international communications.   
232. The Government has set a target to increase national teledensity by 10% annually between 
2010 and 2014.55  In 2010, the teledensity rose to 54% from 39% in 2009.56  This was attributed to an 
increase in mobile telephony subscriptions as the three mobile telephone providers (ECONET, 
Telecel, and NetOne) competed for subscribers.  ECONET, a privately-owned company is the largest 
mobile telephone provider in Zimbabwe, with about 62% market share (NetOne has 20% and 
TeleCell has 18%57).  As demand for voice services is increasingly being met, future growth is likely 
to occur in mobile internet and broadband provision;  all mob ile operators and internet access 
providers will benefit from this second wave of growth.58  
233. The Government policy also aims to increas e teledensity in rural and other under-served 
areas.  To achieve this objective, the Regulator y Authority sets connectivity targets for fixed and 
mobile licensees;  it created a Universal Services Fund for this purpose.  The general targets for 
teledensity are at least 10 fixed telephones per 100 ci tizens for urban areas, and 3 per 100 citizens for 
rural areas.  Overall, the policy aspires to achie ve international best practices by the already 
established SADC standards.  Zimbabwe is shifting from the expensive, slow satellite internet data 
connection to fiber-optic cable, as it seeks to bring telecoms and internet connectivity to rural areas.59 
234. Zimbabwe has undertaken specific GATS comm itments on telecommunications. It did not 
participate in the WTO negotiations on basic tel ecommunications that ended in 1997, but it accepted 
the GATS Fourth Protocol (on basic telecommunica tions) in 1999.  Zimbabwe did not commit itself 
to open a number of subsectors to full competition or  to unrestricted foreign investment, particularly 
for data-transmission services, such as packet-switc hed data transmission and circuit-switched data 
transmission services. 
235. Zimbabwe is a member of Universal Po stal Union (UPU), the International 
Telecommunications Union (ITU), the Pan-African Postal Union (PAPU) and the African 
Telecommunications Union (ATU).  As a signatory of  the SADC Protocol, Zimbabwe is a member of 
the Southern African Postal Operator's Association (SAPOA), the Southern African 
Telecommunication Operators' Association (SATOA), and the Communications Regulators' Association of Southern Africa (CRASA).  In addition, as a signatory of the COMESA Treaty, 
Zimbabwe is a member of the Telecommunication Regulators' Association for Eastern and Southern 
                                                      
55 Ministry of Information Communication Technology (2010). 
56 Postal and Telecommunications Regulatory Authority of Zimbabwe. 
57 Subscriber figures provided by the operators. 
58 ITU online information.  Viewed at:  http ://www.itu.int/ITU-D/ict/new slog/SearchView.aspx? 
q=zimbabwe%20telecommunication. 
59 Itnewsafrica online information.  Viewed a t:  http://www.itnewsafrica.com/tag/zimbabwe/ 
[24 May 2011]. Zimbabwe WT/TPR/S/252 
 Page 109 
 
 
  Africa (TRASA), and the Association of Regulator s of Information and Communications for Eastern 
and Southern Africa (AFRICEA).  
(b) Institutional and regulatory framework60 
236. Zimbabwe has four separate pieces of legi slation with a bearing on the regulatory 
environment for the information and communications technology (ICT) sector:  the Postal and 
Telecommunications Act of 2000, the Broadcasting Services Act of 2001, the Access to information 
and Protection of Privacy Act of 2002, and the Interception of Communications Act of 2007.  
Regulation of the sector is divided between the Po stal and Telecommunications Authority (POTRAZ), 
which is accountable to the Minister of Tran sport and Communications;  and the Broadcasting 
Authority of Zimbabwe (BAZ) and the Media and Information Commission (MIC), which report to 
the Minister of Media, Information and Publicity.   
237. Operation and provision of telecommunication services require an appropriate licence.  To 
obtain a telecom licence, the applicant must, inter alia , be locally incorporated in Zimbabwe with a 
majority Zimbabwean ownership.  Government pol icy is to ensure that, in granting the licence, 
specific preference is given to the "previously economically disadvantaged groups" in Zimbabwe. 
238. POTRAZ, the country's spectrum authority, allocates radio frequency spectrum through its 
Spectrum Management Department;  it also regulates  the activities of the telecom and postal services.  
The Authority is responsible for granting licences, promoting the development of telecom and postal 
services, promoting effective competition in these s ubsectors, and regulatory functions generally over 
telecommunications and postal servic es, including protecting consumers.61  The BAZ deals with 
allocation of radio frequency spectrum to its own licensees;  issuance of broadcasting and signal 
carrier licences;  manages the frequency spectrum;  and protects consumers.  The MIC mandate includes fostering freedom of expression in Zi mbabwe;  developing mass media and upholding 
professional and ethical codes of conduct;  and en suring unbiased and balanced reporting by the mass 
media in the country. 
239. Though these regulatory institutions are meant to  be independent, the Government has powers 
to intervene in a range of matters, including c onnection fees, tariffs and connectivity targets for 
licensees;  the Minister responsible for the sector, in consultation with the President on matters of 
national or public interest, may direct the Board of  the Authority to reverse, suspend or rescind its 
decision or actions.
62  The law provides for interconnection between licensees.  Once a licence is 
requested to interconnect with another licensee, any ope rator is obliged to interconnect with its system 
in accordance with the conditio ns provided by the law.63  All telecommunication apparatus used by 
any licensee must be approved by the Authority.64  However, the law does not stipulate whether 
end-user devices must be approved. 
240. There is overlap and duplicati on of functions between the agencies regulating the sector.  The 
fragmented nature of their arrangements impedes effi cient development and harm onization of efforts.  
Both POTRAZ and BAZ manage radio frequenc ies and regulate electronic transmission of 
information and data.  Both are funded through re venue from licensing and the levy on gross turnover 
of the telephone operator, internet access provide rs, data communication providers and postal and 
                                                      
60 Part of this subsection relies on African Development Bank (2011). 
61 Section 4 of the Postal and Telecommunication Act (Chapter 12:05). 
62 Section 26 of the Postal and Telecommunication Act (Chapter 12:05). 
63 Section 61 of the Postal and Telecommunication Act (Chapter 12:05). 
64 Section 62 of the Postal and Telecommunication Act (Chapter 12:05). WT/TPR/S/252 Trade Policy Review 
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  commercial courier operators.  The licensees are also  required to contribute to the Universal Service 
Fund (UDF), which is under the control of th e POTRAZ Board.  This duplication affects the 
relationship of the two institutions with interna tional and regional bodies, such as the International 
Telecommunications Union (ITU), COMESA, and SADC. 
241. The policy on universal service includes both telecommunications and postal services.  The 
policy aims to ensure that rural and other under-served areas are given access to these services, 
regardless of whether they are commercially viable  in these areas.  Accordingly, a fund has been 
established under the Authority to subsidize provision of universal service.  
242. Telecommunications growth has been hampered  by regulatory constraints restricting 
competition, especially the state monopoly on fixed wire services, and the resulting high charges and 
inadequate services that penalize consumers, including businesses. 
(c) Postal services 
243. There are about 200 full post offices, and 125 sub-post offices and postal agencies in 
Zimbabwe.  Four sub-post offices have been clos ed for viability reasons.  Given the population of 
around 12.5 million, Zimbabwe has a postal density of 33,000 people per postal outlet.  About 40% of 
business in postal services is social, and 60% comm ercial.  The universal service provision obliges 
operators to provide services even where not comm ercially viable, giving citizens equal access to 
basic letter services. 
244. The postal services, like the telecommunications  services, are regulated by the Postal and 
Telecommunication Act (Chapter 12:05).  They are under the mandate of the Postal and 
Telecommunication Authority of Zimbabwe. 
(iv) Transport 
245. Transport makes a significant contribution to Zimbabwe's GDP (Chapter I).  The sector is 
regulated by the Ministry of Transport, Communicat ions and Infrastructure Development, which also 
formulates policies for transport services.  Under the Ministry various agencies and authorities are 
responsible for specific areas:  Zimbabwe National Roads Administration (ZINARA);  the National 
Railways of Zimbabwe;  and the Civil Aviation Authority of Zimbabwe. 
246. Transport policy has been evolving with the adop tion of a number of reforms in recent years.  
Many of the reforms aim to make Zimbabwe's tran sport policy compliant with SADC requirements.  
For instance, under Article 2.4 of the SADC Protocol on Transport, Communications and Meteorology state-owned enterpri ses and public utilities must be restructured into financially 
independent and commercially viable entities.  
247. Zimbabwe also uses water and pipeline transpor t, as the country is landlocked;  there are 
limited water transport services.  Pipeline transport is used for petroleum products:  the pipeline is 
212 km long and links with Mozambique.  It is re gulated by the Pipelines Act (Chapter 13:08), and 
the Mozambique - Feruka Pipelines Act (Chapter 13: 07).  The Government allows concessionaires in 
pipeline transport services. 
(a) Road transport 
248. Zimbabwe has a total road network of 85,208 km, of which 20.4% are surfaced roads; 14% 
are gravel roads;  and 65% are earth roads (Table IV.17).  A portion of the Pan-Africa Highway Zimbabwe WT/TPR/S/252 
 Page 111 
 
 
  passes through Zimbabwe and plays a major role in  the movement of the country's imports and 
exports as well as transit freight.  Zimbabwe is a signatory to the SADC Protocol on Transport, 
Communications, and Meteorology (1996), which set out significant changes to road sector management and financing in the region.  The ag reement commits SADC member states to reforming 
road sector institutions, in particular separati ng responsibilities for funding, implementation, and 
commercialization of road sector activities.   
Table IV.17  
Zimbabwe road network 
Road authority Surfaced (km) Gravel (km) Earth (km) Totals (km) 
Department of Roads 8,900 7,577 1,985 18,462 
District Development Fund .. 2,161 19,914 22,075 
Rural district councils 356 2,133 33,988 36,477 
Urban councils 8,164 26 4 8,194 
Totals 17,420 11,897 55,891 85,208 
.. Not available. 
Source:  WTO Secretariat, based on informa tion provided by the authorities. 
249. There are four road authorities:  the Department of Roads (DoR), which is the main authority;  
District Development Fund (DDF);  rural district  councils (RDCs);  and urban councils (UCs).  
Regulatory responsibilities (design standards, signs and signals, parking, congestion, routing of heavy 
vehicles) for all types of roads are assigned to the main DoR, though these may be delegated to other 
road authorities or competent bodies, especially responsibilities that are likely to have significant 
urban impact. 
250. As a result of structural adjustment reform s in the 1990s, Zimbabwe deregulated many 
sectors, including transport.  The deregulation led to a significant increase in the number of privately 
operated public transport vehicles, a substantial in crease in capacity, and an expansion of the urban 
transport network as new services were introduced.  There has also been a co nsiderable reduction in 
average waiting times for passengers.  Road transp ort is currently private-sector driven, but the 
Government still runs the Zimbabwe United Passenger Company (ZUPCO);  a parastatal that provides 
public transport services in Harare along with other private players who use mainly omnibuses for 
public transport.  ZUPCO's activities diminished, as private players came into the sector, and the 
strong competition pushed its operations out of Harare into rural areas. 
251. The trucking industry has grown rapidly due to liberalization and increased trade with 
South Africa.  The vehicle fleet grew at an average of 4% during 2000-09, while the number of trucks registered in Zimbabwe increased from 27,400 in 1990 to an estimated 75,000 in 2009.  However, 
freight costs remain higher than the regional aver age.  Domestic freight companies quoted freight 
rates of US$0.10-11 per tonne/km for domestic freight  in 2010.  The trucking industry is boosted by 
Zimbabwe's bilateral agreement w ith South Africa, its biggest tr ading partner.  Between 1990 and 
1996, imports from South Africa increased from 20% to  38% of all imports, and are currently 60%.  
South Africa was the destination for about 10% of Zimbabwe's total exports in 2001 and more than 
50% in 2009.  The bilateral agre ement between Zimbabwe and South Africa restricts the transport of 
bilateral trade to carriers from the two countries;  cargo rates and charges are determined by market 
forces.
65 
                                                      
65 African Development Bank (2011). WT/TPR/S/252 Trade Policy Review 
Page 112 
  
  252. The Road Act spells out the management of Zi mbabwe's 85,208 km road network.  It also 
provides for Zimbabwe National Roads Administra tion (ZINARA) and its functions, as well as the 
Road Fund (RF).   
253. According to the authorities, due to present fiscal conditions, the Government cannot increase 
budget allocations to maintain roads.  This issu e has been addressed by separating road financing 
from the Government's consolidated budget.  An explicit road tariff has been introduced, consisting 
primarily of vehicle licence fees and a fuel levy.  The revenues are collected independently of the 
Government's sales and excise taxes and are deposited  directly into the Road Fund, administered by 
the Zimbabwe National Road Administration (ZINAR A), which functions as defined by the Road Act 
(Chapter 13:18). 
254. Furthermore, the Government introduced a system of road tolls on the major highways in 
2009, to finance the Road Fund.  The tax collected  by the Zimbabwe Revenue Authority (ZIMRA) is 
managed by the ZINARA, in conjunction with the Ministry of Transport, Communications and 
Infrastructure Development (Chart IV.3).  Trans port operators are subject to the presumptive tax, 
introduced in 2009. 
Source :    Information supplied by the Department of Roads, Ministry of Transport, Communications and Infrastructure Development.  Chart IV.3
Institutional relationship for the road sector
Ministry of FinanceMinistry of Transport, Communications 
and Infrastructural DevelopmentMinistry of Local 
Government, Public Works, & 
Urban Development
Department of 
RoadsDDF Road FundLocal Road Authorities: 
Urban Councils; Rural District 
CouncilsZINARA Board
 
255. Zimbabwe has signed bilateral road-transpor t agreements (BRTAs) with:  Botswana, 
Democratic Republic of Congo, Malawi, Mozambi que, Namibia, South Africa, United Republic of 
Tanzania, and Zambia.  Cabotage is prohibited in acco rdance with the 'third-country rule' enshrined in 
the BRTAs, unless authorized by the competent authority. 
(b) Railway transport 
256. The National Railways of Zimbabwe (NRZ), a state-owned enterprise incorporated under the 
Zimbabwe Railways Act (Chapter 13:09), is mandate d to provide, operate, and maintain an efficient 
system of public transportation of goods and passenge rs by rail.  It has an extensive rail network 
system of 2,760 km.  The NRZ's rail network consists  of both electrified and un-electrified sections 
and its motive power fleet consists of steam, electric, and diesel locomotives (steam trains are used for tourism). 
257. The NRZ has been essential to the growth of Zimbabwe's domestic, regional, and 
international trade, as it connects all major ec onomic centres and provide s transport for bulk raw 
materials, finished goods, and passengers.  As Zimb abwe is a landlocked country, the railway network Zimbabwe WT/TPR/S/252 
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  plays a major role in its regional trade by linking  with contiguous railways of Mozambique, South 
Africa, Botswana, and Zambia.  In South Africa, the NRZ links to the ports of Durban, Richards Bay, 
and Port Elizabeth.  Due to its central location in  the southern African region, the NRZ acts as a hub 
in the movement of transit cargo. 
258. Institutionally, there are three authorities with  different roles:  the National Railways of 
Zimbabwe (NRZ);  the Bulawayo-Beitbridge concessionaire;  and the Ministry of Transport, Communications, and Infrastructural Development.  Railway services are regulated by the Zimbabwe 
Railways Act (Chapter 13:09), which also establis hed the National Railway of Zimbabwe Board, 
which controls the operations of railways.  
259. The government policy since 1996 has been to pr ivatize (concession) the railways to allow 
private-sector participation.  The Railways Act w as modified in 1997, to allow for the concessions.
66  
The Government's objective is to split the National Railways of Zimbabwe into three:  the Railway 
Regulatory Authority;  Railway Operations Company;  and Railway Infrastructure Company.  However, this has not yet been achieved. 
(c) Air transport 
260. Zimbabwe has three major international airports :  Harare International Airport, J.M. Nkomo 
International Airport in Bulawayo, and Victoria Falls International Airport.  It has eight airports and 
aerodromes spread across the country, five domestic and three international.  Domestic airports 
include Kariba Airport;  Buffalo Range Airport;  Charles Prince Airport;  Hwange Airport;  and Masvingo Airport.  However, Kariba Airport has immigration facilities and has been exchanged as an 
international entry point during bilatera l air services agreement negotiations.   
261. In 2009, the number of international airlines serving Zimbabwe dropped from 24 to 12 due to 
economic challenges and negative pe rceptions due to economic and political problems.  This has led 
to a sharp decline in tourist arrivals.
67  Air transport has been severely affected by the economic 
decline of the past decade;  the number of passe ngers fell from a peak of 2.6 million in 1997 to 
846,000 in 2009.   
262. State-owned Air Zimbabwe is the only nati onal carrier.  According to the authorities, 
12 international carriers provide international ai r transport services to and from Zimbabwe under 
bilateral air service agreements.  These are Air Zimbabwe, which is the primary domestic carrier, 
Kenya Airways, Air Malawi, Botswana Airlines, South African Airways, South African Air link, Comair (which is a franchise partner with British Airways), Air Namibia, Fly Kumba, Zambezi 
Airlines, Ethiopian Airlines, and Angola Airlines.
68   
263. The only authorized ground handlers are Nati onal Handling Services (NHS), for both cargo 
and passenger operations;  and Av iation Ground Services (AGS) for cargo operations only.   NHS is 
wholly owned by the Government whilst AGS is privately owned.  
264. Zimbabwe ratified and domesticated, throug h the Aviation Act (Chapter 13:16), the 
International Convention on Civil Aviation (Chica go Convention), which governs rules of airspace, 
aircraft registration and safety, and rights of the signatories in relation to air travel.  It is also a 
                                                      
66 African Development Bank (2011). 
67 Zimbabwe Tourism Authority (2010). 
68 African Development Bank (2011). WT/TPR/S/252 Trade Policy Review 
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  signatory to the Yamoussoukro Decision, whic h governs the arrangement among parties for the 
gradual liberalization of scheduled and non-sch eduled intra-Africa air transport services.69 
265. The authorities note that Zimbabwe follows the Chicago Convention with regard to policy on 
airline ownership and control.  While Zimbabwe  has ratified the Chicago convention, compliance 
with the 25% threshold is not guaranteed, as the curr ent view of the authorities is that 25% represents 
substantial ownership in a high capital industry.   
266. Access to the Zimbabwean aviation market is regulated by the Aviation Act, Air Services 
Act, Carriage by Air Act, and the Civil Aviation Act.  The Civil Aviation Act (Chapter 13:16) 
established the Civil Aviation Authority of Zimbab we (CAAZ), which controls and regulates the 
operation of the industry, manages the civil aviatio n infrastructure, and provides airspace management 
services.  CAAZ is also responsible for aviation security, aircraft registration, and provision of 
aeronautical information services. 
267. Foreign air transport companies apply to the CAAZ for landing and take-off rights.  These 
rights are based on bilateral agreements.  Zimbabwe  has concluded several BASAs:  few have been 
signed;  the majority have only been initialled,  although these are being operationalized by signed 
memoranda of understanding (MoUs).  None of the ag reements has this far been deposited with the 
International Civil Aviation Organization (ICAO).70 
268. The carriage of passengers, goods, and mail via a th ird country is referred to as the 'exercising 
of fifth freedom traffic rights'.  Zimbabwe's polic y is that:  'this is only allowed on a case-by-case 
basis and where such rights are granted, reciprocity applies'.71  
269. Zimbabwe is a member of the International Ci vil Aviation Organization and the African Civil 
Aviation Commission (AFCAC).  It has no open sky ag reements.  It has started to renegotiate and 
review existing air transport agreements in li ne with the key principles of the Yamoussoukro 
Decision.  In 2009, the Inclusive Government of Zimbabwe made a decision to operate an open sky 
policy.  According to the Short Term Emerge ncy Recovery Programme (STERP), the Inclusive 
Government hopes to introduce more liberal and less  protective air transport policies, and offers 
competitive incentives to attract foreign air lines in accordance with the open sky policy.72 
(v) Tourism 
270. Tourism is one of Zimbabwe's major economic drivers, contributing about 3.8% to GDP in 
the 1990s;  8.73% of total capital investment and at least 8.8% of the country's total exports.  The 
sector employs over 300,000 people (about 10% of formal employment), as well as a large number 
                                                      
69 United Nations Economic and Social Council document ECA/RCID/CM.CIVAC/99/RPT. 
70 Zimbabwe has concluded BASA negotiations with:  the United Kingdom;  United Republic of 
Tanzania;  Mozambique;  South Africa;  Kenya;  Egypt;  Pakistan;  Zambia;  Ethiopia;  Gabon;  Libya;  United 
Arab Emirates;  West Germany;  East Ge rmany;  Nigeria;  Italy;  Union of Soviet Socialist Republics;  Bulgaria;  
Romania;  India;  Portugal;  Cuba;  Swaziland;  Korea;  Burundi;  Mauritius;  Netherlands;  Lesotho;  Comoros;  
Singapore;  Malawi;  Poland;  Switzerland;  Uganda;  Belg ium;  Botswana;  Ghana;  Spain;  the United States;  
Australia;  Yugoslavia;  Malaysia;  France;  Angola;  Cyprus;  Namibia;  Cameroon;  Thailand;  The Gambia;  Senegal;  Indonesia;  Greece;  Bahrain;  Kuwait;  Austria;   Democratic Republic of Congo;  State of Qatar;  
Turkey;  China;  Brazil;  and Hong Kong, China. 
71 In road transport, we talk about 'cabotage', that is, the carriage of goods destined to a third country.  
In Zimbabwe, this is prohibited in acco rdance with the 'Third Country Rule' that is enshrined in the Bilateral 
Road Transport Agreements (BRTAs).   
72 Government of Zimbabwe (2009). Zimbabwe WT/TPR/S/252 
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  employed informally in the sector and in supply chains such as production and marketing.  After a 
sluggish 1% annual growth of tourist arrivals in 1999-2009, the tourism sector has been growing at 
10% since 2009, and is expected to contribute 15% to GDP in 2015.73  Zimbabwe has many tourist 
attractions, including Victoria Falls, Hwange Na tional Park, Gonarezhou National Park, the River 
Zambezi, wild life and the rich history and heritage. 
271. Zimbabwe is second to South Africa in terms of tourist arrivals in the southern region of 
Africa.  According to the Regional Tourism Organi sation of Southern Africa (RETOSA), it accounted 
for about 9.5% of tourist arrivals in the region.74  Zimbabwe lost a substantial amount of its market 
share in 2000-09 as tourist arrivals plummeted from 16% to 9.5%. (Chart IV.4).  This was due to 
negative perceptions about Zimbabwe in the traditional source markets of Europe and the 
United States.  The socio-politico-economic cris is during the period pushed several foreign 
governments and travel agencies to issue a dvisories against travelling to Zimbabwe.75 
582.6607.0675.2879.51,039.01,415.51,596.7
1,335.62,090.42,249.6
1,966.62,217.4
2,041.22,256.2
1,854.5
1,558.52,286.62,506.0
1,955.62,017.3
05001,0001,5002,0002,5003,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Zimbabwe Tourism Authority (2010), Tourism Trends and Statistics, Annual Reports, 2000-2009.('000)Chart IV.4
Tourist arrivals to Zimbabwe, 1990-2009
Source :
 
272. Zimbabwe has large potential for growth as many  natural and cultural tourism resources have 
not been fully exploited.  In addition to ecot ourism, other forms of tourism with development 
potential, include cultural tourism (diverse customs a nd historical heritage);  agri-tourism;  safari 
photography and hunting;  business and conferences;  s port;  and "health and medicinal plant-related" 
tourism.   
273. Historically, tourism has been the preserve of minority segment in Zimbabwe.  Current 
government efforts are geared towards making t ourism an activity for all Zimbabweans.  The 
Government is also undertaking diversification in the tourism sector including the products offered 
and the source markets, while encouraging local- or community-based tourism. 
                                                      
73 Ministry of Tourism and Hospitality Industry (2010a). 
74 Government of Zimbabwe (2010). 
75 Zimbabwe Tourism Authority (2010). WT/TPR/S/252 Trade Policy Review 
Page 116 
  
  274. Zimbabwe developed a National Tourism Policy Paper in 2010 to guide the development of 
tourism, with a vision of developing the country  into a world-class destination.  The policy puts 
emphasis on developing tourism that meets the requi rements and expectations of the market, while 
contributing to the economic and social well-being of  Zimbabweans in a sustainable manner.  It also 
underscores the importance of ecological and environmental sustainability in tourism and 
tourism-related activities.  The policy seeks to cr eate an environment conducive the development of 
entrepreneurship in the tourism industry, while promoting indigenization and economic empowerment 
of the previously disadvantaged groups.76  
275. Tourism in Zimbabwe is regulated by the Tour ism Act.  The Act provides for:  licensing of 
persons who provide tourism and t ourism-related services;  the Tour ism Authority and its functions; 
and a Tourism Fund.  The Tourism Authority in Zi mbabwe is responsible for promoting tourism, 
registration and grading of tourist facilities, and investigations and recommendations to the Minister 
on matters affecting tourism.  Provision of tourism and tourism-related services requires a licence;  to 
be designated as a tourist facility, any place or  facility must be graded and registered. 
276. Various incentive schemes are in place, aimed at improving tourism services.  The 
Government intends to revitalize the sector by streamlining customs and immigration formalities, 
facilitating the introduction of the UNIVISA for tourists;  upgradin g and diversifying the tourism 
product and attractions;  providing di rect financial support and marke ting support, chiefly to smaller 
resorts and SME tourism enterprises.  The Governme nt plans to work with the private sector and 
international partners.    
277. Poor quality services and other weaknesses in Zimbabwe's tourism industry are attributed to a 
lack of skills and training.  Specialized institutio ns are to be set to tr ain and upgrade personnel 
engaged in the tourism industry. 
278. Zimbabwe is a signatory to the Tourism Charte r, the Tourist Code of 26 September 1985, and 
the Global Code of Ethics for Tourism, of 1 October 1999, drawn up by the World Tourism Organization (UNWTO), of which it is a member.  Zimbabwe is currently chairing the Regional 
Tourism Organization of Southern Africa (RETOSA ) and sits on the Executive Council of the United 
Nations World Tourism Organization (UNWTO).
77  The country is also a member of the Africa 
Travel Association (ATA) and the Indian Ocean Tourism Organization (IOTO).   
279. Under the GATS, Zimbabwe made commitments  on tour operator servi ces and tourist guides 
services.  It applies limitations on national treatment  to tourist guide services.  Foreign-based tour 
operators must pay park-entry fees in foreign curre ncy, and only locally registered safari operators 
may obtain concessions to offer hunts through "leasing" or auctions of hunting areas.78 
 
                                                      
76 Ministry of Tourism and Hospitality Industry (2010b). 
77 RETOSA is the SADC body responsible for promoting and marketing tourism in Southern Africa.   
78 WTO document GATS/SC/94, 15 April 1994.