Unemployment tops the list of problems that Zimbabweans want their government to address, followed by food insecurity and health. There are a lot of figures for the rate of unemployment in Zimbabwe doing the rounds, from 95% to 5%, which is surely the biggest range you'll see for estimates of any indicator.
Official Statistics and Discrepancies
Officially, the unemployment rate was 21.8% in the third quarter of 2024 (Zimstat, 2024). It depends largely on what definition of unemployment you use.
The International Labour Organisation (ILO) calculated it at 5.2% for 2016. But that is a figure for strict unemployment, which means somebody must have been without work, available for work and actively seeking work. The broader definition does not require somebody to be seeking work.
Zimstat told Reality Check that the reason the 2014 figures are relatively low is that they included people like subsistence farmers, who consume all their own output, as employed. Their rules have now changed and when they do their next labour force survey such people will be counted as being unemployed, which should lead to a sharp increase in the rate.
Zimstat was supposed to be conducting another survey this year but "resource constraints" prevented that from happening. They now hope to conduct another one in 2018.
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Informal Economy and Its Impact
Less disputed is the staggering estimate that 80% of jobs in the country are in the informal sector, where work typically provides low pay and little security (Zimbabwe National Chamber of Commerce, 2024). The New York Times is clear that the figure it is citing is not the unemployment rate, it's the proportion of people in the country who are working in the informal economy. It also comes from Zimstat's labour force survey from 2014.
People working in the informal economy include people working unpaid for a family business or paid employees who are not entitled to sick leave or paid holidays. It is an important metric and it's extraordinarily high, but it's not the unemployment rate.
Even so, Prof Catherine Boone, from the LSE, confirms that the main distinction between very high and very low figures is how you treat informal employment. If the only people you count as employed are those on a payroll with taxes deducted at source and pension provision, then you get to a very high estimate of unemployment. Once you start getting into the informal economy though, things become less clear. So, for example, a consultant working part-time for various international organisations would not be considered to be formally employed by this definition but few people would consider him or her to be unemployed.
The Archbishop of York, John Sentamu, quoted a figure of 90% on the BBC's Andrew Marr Show last week. The 90% estimate comes from the Zimbabwe Congress of Trade Unions - speaking after that estimate was made, opposition leader Morgan Tsvangirai said that President Mugabe had turned the country into a nation of street vendors. But are street vendors not employed? They can't be if you are estimating a 90% unemployment rate.
The ILO, which sets the rules for unemployment statistics, says that unemployment is certainly not as high as 90%, but confirms that it will be higher than 11.3% once subsistence farmers are reclassified. But it also says that the actual proportion of people employed is not what matters in Zimbabwe at the moment.
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Government Policies and Employment
To make matters worse, the minister of finance and economic development recently announced that the government is freezing public employment in all sectors (Marufu, 2024), and the government is extending the retirement age for civil servants and uniformed forces by five years (Chidhakwa, 2025; Chronicle, 2025).
Economic Context and Challenges
The economy of Zimbabwe is a gold standard based economy. Zimbabwe has a $44 billion dollar informal economy in PPP terms which translates to 64.1% of the total economy. Agriculture and mining largely contribute to exports. The country has reserves of metallurgical-grade chromite.
This policy of widespread seizure of private land and property spooked international investors and negatively affected market confidence. Between 2003-2006, the Reserve Bank of Zimbabwe began printing money at an extreme rate, causing inflation to spike by a factor of 1,000. By the middle of 2008, Zimbabwe hit a breaking point.
After a period of relative economic stability, the government reintroduced local currency again in 2019, and quickly faced challenges in maintaining its value. In April 2024, the government launched a new currency, Zimbabwe Gold (ZiG), to replace the Zimbabwean dollar.
Government spending is 29.7% of GDP. State enterprises are strongly subsidized. Taxes and tariffs are high, and state regulation is costly to companies. Starting or closing a business is slow and costly. Due to the regulations of the labour market, hiring and terminating workers is a lengthy process. Zimbabwe came 140 out of 190 ease of doing business report released by the World Bank Group.
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Zimbabwe's internal transportation and electrical power networks are adequate; nevertheless, maintenance has been ignored for several years. Zimbabwe is crossed by two trans-African automobile routes: the Cairo-Cape Town Highway and the Beira-Lobito Highway. The Zimbabwe Electricity Supply Authority is responsible for providing the country with electrical energy. Zimbabwe has two larger facilities for the generation of electrical power, the Kariba Dam (owned together with Zambia) and since 1983 by large Hwange Thermal Power Station adjacent to the Hwange coal field. However, total generation capacity does not meet the demand, leading to rolling blackouts. The Hwange station is not capable of using its full capacity due to old age and maintenance neglect.
Commercial farming was almost exclusively in the hands of the white minority until the controversial land redistribution program began in 2000. Tobacco production recovered after 2008 thanks to the contract system of agriculture and growing Chinese demand. Land reform has found considerable support in Africa and a few supporters among African-American activists, but Jesse Jackson commented during a visit to South Africa in June 2006, "Land redistribution has long been a noble goal to achieve but it has to be done in a way that minimises trauma. The process has to attract investors rather than scare them away.
As other southern African countries, Zimbabwean soil is rich in raw materials, namely platinum, coal, iron ore, and gold. Recently, diamonds have also been found in considerable deposits. Copper, chromite and nickel deposits also exist, though in lesser amounts.
Zimbabwe has one of Africa's highest literacy rates at over 90%. The crisis since 2000 has, however, diminished these achievements because of a lack of resources and the exodus of teachers and specialists (e.g. doctors, scientists, engineers) to other countries.
Zimbabwe's Second Science and Technology Policy (2012) cites sectorial policies with a focus on biotechnology, information and communication technologies (ICTs), space sciences, nanotechnology, indigenous knowledge systems, technologies yet to emerge and scientific solutions to emergent environmental challenges. Zimbabwe has a National Biotechnology Policy which dates from 2005.
Historical Economic Trends
In 1997, Zimbabwe's economic decline began to visibly take place. It began with the crash of the stock market on November 14, 1997. Civil society groups began to agitate for their rights as these had been eroded under ESAP. In 1997 alone, 232 strikes were recorded, the largest number in any year since independence (Kanyenze 2004). During the first half of 1997, the war veterans organized themselves and demonstrations that were initially ignored by the government.
As the intensity of the strikes grew, the government was forced to pay the war veterans a once-off gratuity of ZWD $50,000 by December 31, 1997, and a monthly pension of US$2,000 beginning January 1998 (Kanyenze 2004). To raise money for this unbudgeted expense, the government tried to introduce a ‘war veterans’ levy,’ but they faced much opposition from the labor force and had to effectively borrow money to meet these obligations.
Following the massive depreciation of the Zimbabwean dollar in 1997, the cost of agricultural inputs soared, undermining the viability of the producers who in turn demanded that the producer price of maize (corn) be raised. Millers then hiked prices by 24 percent in January 1998 by 24 percent and the consequent increase in the price of maize meal triggered nation-wide riots during the last month. The government intervened by introducing price controls on all basic commodities (Kanyenze 2004).
Multiple interventionist moves were undertaken to try to reverse some of the negative effects of the Structural Adjustment Programs and to try to strengthen the private sector that was suffering from decreasing output and increasing competition from cheap imported products.
At the time of independence, annual inflation was 5.4 percent and month-to-month inflation was 0.5 percent. Currency of Z$2, Z$5, Z$10 and Z$20 denominations were released. Following the Lancaster House Agreement in December 1979, the transition to majority rule in early 1980, and the lifting of sanctions, Zimbabwe enjoyed a brisk economic recovery. Real growth for 1980-1981 exceeded 20%.
However, depressed foreign demand for the country's mineral exports and the onset of a drought cut sharply into the growth rate in 1982, 1983, and 1984. In 1985, the economy rebounded strongly due to a 30% jump in agricultural production.
In 1992, a World Bank study indicated that more than 500 health centres had been built since 1980. The percentage of children vaccinated increased from 25% in 1980 to 67% in 1988, and life expectancy increased from 55 to 59 years. Enrolment increased by 232 percent one year after primary education was made free, and secondary school enrolment increased by 33 percent in two years. These social policies lead to an increase in the debt ratio.
Several laws were passed in the 1980s in an attempt to reduce wage gaps. However, the gaps remained considerable. In 1988, the law gave women, at least in theory, the same rights as men.
The government started crumbling when a bonus to independence war veterans was announced in 1997 (which was equal to 3 percent of GDP) followed by unexpected spending due to Zimbabwe's involvement in the Second Congo War in 1998.
Recent Economic Hardship and Measures
In recent years, there has been economic hardship in Zimbabwe. Between 2000 and December 2007, the national economy contracted by as much as 40%; inflation vaulted to over 66,000%, and there were persistent shortages of hard currency, fuel, medicine, and food.
The Mugabe Government attribute Zimbabwe's economic difficulties to sanctions imposed by the Western powers. These countries on their side argue that the sanctions are targeted against Mugabe and his inner circle and some of the companies they own.
Financial institutions began withdrawing support for Zimbabwe. Terms of the sanctions made it such that all economic assistance would be structured in support of "democratisation, respect for human rights and the rule of law." The EU terminated its support for all projects in Zimbabwe. As of February 2004, Zimbabwe's foreign debt repayments ceased, resulting in compulsory suspension from the International Monetary Fund (IMF).
Zimbabwe began experiencing severe foreign exchange shortages, exacerbated by the difference between the official rate and the black market rate in 2000. In 2004 a system of auctioning scarce foreign currency for importers was introduced, which temporarily led to a slight reduction in the foreign currency crisis, but by mid-2005 foreign currency shortages were once again severe.
In August 2006 the RBZ revalued the Zimbabwean Dollar by 1000 ZWD to 1 (revalued) dollar. At the same time Zimbabwe devalued the Zim Dollar by 60% against the USD. New official exchange rate revalued ZWD 250 per USD. On 1 April 2007, the parallel market was asking ZWD 30,000 for US$1. By year end, it was down to about ZWD 2,000,000.
On 18 January 2008, the Reserve Bank of Zimbabwe began to issue higher denomination ZWD bearer cheques (a banknote with an expiry date), including $10 million bearer cheques - each of which was worth less than US$1.35 (70p Sterling; 0.90 Euro) on the parallel market at the time of first issue. On 6 May 2008, the RBZ issued new $100 million and $250 million bearer cheques. At the date of first issue the $250 million bearer cheque was worth approximately US$1.30 on the parallel market. On 15 May 2008, a new $500 million bearer cheque was issued by the RBZ. At the time of the first issue it was worth US$1.93.
On 30 July 2008, the Governor of the RBZ, Gideon Gono announced that the Zimbabwe dollar would be redenominated by removing 10 zeroes, with effect from 1 August 2008. On February 2, 2009, a final denomination was implemented, cutting 12 zeroes, before the Zimbabwe dollar was officially abandoned on April 12, 2009.
Dollarization and Government of National Unity
In February 2009, the newly installed national unity government (which included the opposition to Mugabe) allowed foreign currency transactions throughout the economy as a measure to stimulate the economy and end inflation. The Zimbabwean dollar quickly lost all credibility, and by April 2009, the Zimbabwean dollar was suspended entirely, to be replaced by the US dollar in government transactions. Dollarization reversed inflation, permitting the banking system to stabilize and the economy to resume slow growth after 2009.
In August 2014, Zimbabwe began selling treasury bills and bonds to pay public sector salaries that have been delayed as GDP growth weakens while the economy experiences deflation. US$2 million was sold in July through private placements of Six-month Treasury bills at an interest rate of 9.5%. According to IMF data, GDP growth was forecast to be 3.1% by the end of 2014, a major decline from an average rate of 10% between 2009 and 2012, while government data showed that consumer prices declined for five consecutive months by the end of June.
The Reserve Bank continued to issue large values of treasury bills to support the government's over-budget spending. In November 2016 a pseudo-currency was issued in the form of Bond Notes despite widespread protests against them. In June 2019 the use of foreign currencies in local transactions was prohibited as part of the prospective plan for a new national currency and thus ended the dollarization period. There was still low volume trade in US Dollars, particularly in the informal sector and using in-shop bureau de change.
Government of National Unity and Subsequent Policies
In response to the negative long-term economic situation the three parliamentary parties agreed on a Government of National Unity. Despite serious internal differences this government made some important decisions that improved the general economic situation, first of all the suspension of the national currency, the Zimbabwean Dollar, in April 2009. That stopped hyperinflation and made normal forms of business possible again, by using foreign currency such as the US American Dollar, the South African Rand, the EUs Euro or the Botswana Pula.
The former finance minister Tendai Biti (MDC-T) tried to hold a disciplined budget. Following ZANU-PF's landslide electoral victory in the 2013 general elections, Patrick Chinamasa was appointed finance minister. Policies encouraging the indigenisation of the economy were fast tracked and laws requiring that 51% or more of non-black Zimbabwean owned companies had to be handed over to black Zimbabweans were implemented. This has been credited with creating further uncertainty in the economy and negatively impacting investment climate in the country.
In April 2014, Chinamasa admitted that the country was heavily in debt and that the country needed to better attract foreign direct investment. Officially Zimbabwe's debt is $7 billion, or over 200% of the country's GDP. However, this figure is disputed, with figures as high as $11 billion being quoted, once debts to other African countries and China are included.
As of May 2014, it has been reported that Zimbabwe's economy was in decline following the period of relative economic stability during the Government of National Unity.
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