A combination of political instability, economic mismanagement, economic sanctions and arguably hostile relations with major developed countries, has led to a collapse of the Zimbabwean economy. Zimbabwe’s political landscape has been defined by sharp political confrontation between Zimbabwe African National Union Patriotic Front (ZANU-PF) and opposition parties, mainly the Movement for Democratic Change led by Morgan Tsvangirai (MDC-T), which has resulted in political instability.
The Zimbabwean economy is currently experiencing severe challenges of slow economic growth, low commodity prices and drought impacts. Slow economic growth and low commodity prices are intrinsically linked, as the global downturn has brought about a situation whereby the world’s leading economies, such as China, are slowing down, and this has a trickledown effect on emerging economies such as Zimbabwe, as demand for their raw material wanes.
The Zimbabwean economy has lost economic impetus since 2012 after there was indication of an economic resurgence in the period 2009 to 2012, with economic growth averaging 11% annually. In 2009, Zimbabwe introduced a multiple currency system, accepting the US dollar and the South African rand as legal tender.