Zimbabwe's economy falls on its knees

Once described as a jewel in Africa, Zimbabwe's economy has undergone a meltdown over the past five years, with the agriculture sector reeling from the seizure of white-owned farms and droughts, economists say. At independence from Britain in 1980, Zimbabwe was recording average annual growth rates of 4.5 percent but the economy hit a plateau during the 1990s and by the late 1990s, it was shrinking, according to University of Zimbabwe professor Tony Hawkins.
Since 1999, the economy has contracted by a third "and all the indicators - mining, manufacturing or agriculture - are down," says Hawkins. The fatal blow to the economy of what was seen as an agriculture powerhouse in southern Africa was President Robert Mugabe's decision in 2000 to embark on "fast-track" land reform that led to the seizures of thousands of white-owned commercial farms.
"I think the most important thing was obviously the decision to take over the land and basically destroy the main dynamo of the economy which is commercial agriculture," says Hawkins.
"Given that 70 percent of people reside in rural areas and that agriculture is the single largest employer in the country, the impact of the land reform is quite important," says Godfrey Kanyenze, director of the Labour and Economic Development Research Institute of Zimbabwe (LEDRIZ).
"They redistributed without basically making productive use of the land," he says.
As Zimbabwe heads for key parliamentary elections on Thursday, Mugabe has sought to pin the blame for his country's economic woes on "colonialist" powers like Britain and the United States who he says have undermined his policies.
Aside from food shortages, hyperinflation is tearing at the Zimbabwe dollar while unemployment hovering at between 50 and 80 percent, according to various estimates, has also sent living standards crashing to their lowest level in 25 years of independence.
The dire economic conditions are driving thousands of Zimbabweans across the border to South Africa every week to find work to support their families as illegal migrants.
As formerly war-torn countries like Mozambique and Angola are enjoying an economic revival, Zimbabwe is a black spot on the economic map of southern Africa, according to the UN Economic Commission for Africa in its 2004 report.
Over the past few months, Mugabe's government has said that Zimbabwe is on the verge of an economic turnaround as a result of the tight monetary policies put in place at the end of 2003 by Central Bank governor Gideon Gono.
Inflation which hit a record 623 percent in January 2004 has been brought down to 127 percent in February 2005, giving way to an interest rate cut.