By Motoki Aoki
Long the pariah in Sub Saharan Africa’s economic integration, Zimbabwe has recently made an effort to re-engage with the global community. In February 2015, the EU lifted its 12-year sanction and resumed aid to Zimbabwe. In June, after a decade-long freeze, an IFC delegation visited Harare to seek ways to reinvigorate Zimbabwe’s private sector and help the country’s economy continue trending upwards after it shrank by nearly 40 percent from 2000 to 2008. After what was essentially a lost decade, leaders in Zimbabwe are now seeking long-term, inexpensive funding for the country’s economy and undercapitalized firms. They have found willing partners in multilateral institutions.
The Political Landscape: The Root of Economic Underperformance
Zimbabwe has rich human capital, characterized by a high adult literacy rate of 86.5 percent. It is the political landscape, however, that Zimbabwean chief financial officers specify is the largest risk to business performance. Recognized as the world’s oldest leader, President Robert Mugabe will run for another term in 2018, when he will be 94 years old. Mugabe’s economic policies have been notoriously inconsistent and unfriendly to FDI. Continue reading