After A Free Fall, Zimbabwe Finds A Bit Of Stability
When hyperinflation spiraled out of control in Zimbabwe in 2008, huge numbers of citizens flocked across the border to find jobs, and escape food and water shortages.
That economic nightmare came on top of years of decline. While the country still hasn't fully recovered, Zimbabwe is much more stable and economic life is picking up, at least for some.
On Robert Mugabe Road in the capital Harare, taxi drivers shout out their destinations. Street vendors sell leather belts and cellphone accessories to passersby.
Reginald Kaskete, a cab driver, says Harare today is much different than it was just a few years ago, when the grocery stores were empty and there was no gasoline.
The shop was empty, we had to scramble for sugar, cooking oil; it was traumatic. Now we can afford to hire people and do business.
"Now we have got everything — food, petrol — everything is picking up," he says.
Zimbabwe's inflation rate topped 79 billion percent in late 2008, according to the Washington-based CATO Institute. The country switched to the U.S. dollar — a move that experts say greatly stabilized the economy.
Like many cab drivers, Kaskete now keeps a stack of old Zimbabwean dollars in his car to show tourists what it was like during hyperinflation.
"I've got a 100,000, a 25 million, a 10,000," he says as he flips through the worthless notes.
Food On The Shelves
In a small convenience store nearby, Blessing Chivandile stands by the cash register. He says that during the country's financial meltdown he couldn't get any food or goods to sell. He even had trouble feeding his family.
"The shop was empty, we had to scramble for sugar, cooking oil," he says. "It was traumatic."
Now, with the economy stabilized, his foreign suppliers are willing to sell to him again. The shelves are stocked with fresh fruit, snacks and drinks, and a steady stream of customers moves through," he says. "Now we can afford to hire people and do business."
Tony Hawkins, a professor of economics at the University of Zimbabwe, says Zimbabwe's economy shrank by roughly 40 percent in the years leading up to 2008. He says it has since recouped about half of what it lost, thanks largely to two trends in the mining industry.
Mining Revives Economy
"One was there have been very strong markets for our main exports — particularly gold and platinum — and the other was the discovery and exploitation of diamonds," Hawkins says.
But he adds that the economy is only doing well relative to how badly it was doing before.
Zimbabwe still has massive debt and roughly 80 percent of the population lives in poverty. Hawkins says the country's agriculture sector, which was once among Africa's strongest, hasn't recovered from a failed land reform policy under which thousands of white commercial farmers were forcibly evicted from land they owned.
"We are now a substantial net importer of food, whereas we used to be self-sufficient," he says.
To make matters worse, President Robert Mugabe's Zanu PF party recently sent shock waves through the mining industry when it announced plans for a government takeover of foreign mining companies.
It's part of a so-called "indigenization" program, allegedly designed to distribute wealth to Zimbabwe's millions of poor and unemployed.
But Derek Matyszak, a lawyer who advises mining companies, says the government isn't actually seizing control of any businesses.
"What the government is trying to do at the moment is to strong-arm mining companies into parting with cash that they can hand out to the communities, and look — Zanu PF is bringing you some money," he says.
But analysts say the government's actions are scaring foreign investors and threatening Zimbabwe's economic recovery.
Back in downtown Harare, 32-year-old Declay Alfondega sells candy and pirated movies on the side of the road. He says he keeps hearing about Zimbabwe's economic recovery, but he doesn't know what all the talk is about.
"We are not getting food. No food. Even right now. Things are there in the shops," he says, but they are too expensive.
He doubts that for people like himself things in Zimbabwe will get better anytime soon.
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