Poverty Grips Half of Zimbabwe, but the Economy is Proving Harder to Break
Zimbabwe has long struggled with the issue of poverty, with a recent report indicating that 49.2% of its population is under the poverty line.
This is in sharp contrast to headlines that suggest that the country is on a recovery path, primarily fueled by a growing revenue base and the introduction of a gold-backed currency, simply referred to as ZiG.
This year, gold miners capitalized on gold’s 48% increase, leading to a strong performance on Zimbabwe’s dollar-denominated Victoria Falls Stock Exchange.
The exchange’s benchmark index jumped 45%, increasing its market capitalisation to $1.8 billion by the end of September.
Currently, as disclosed by Mrs. Tafadzwa Bandama, Director General of the Zimbabwe Statistical Agency, another factor contributing to the recovery of Zimbabwe’s economy is a narrowing gap in the country’s trade deficit.
“The fact that exports increased significantly, without a big rise in imports, suggests that Zimbabwe is earning more in foreign currency, which leads to foreign currency reserve accumulation for the country,” she revealed in the African Current podcast, by Sputnik.
She also added that primary industries such as mining and agriculture were responsible for a surge in the commodities the country exported in recent months.
Referencing the trade deficit in July, she noted that the month was particularly pivotal for the country’s improved trade deficit.
July’s trade deficit for the Southern African nation dropped by 94.5 percent to just US$8.7 million, as sen on The Herald.
According to the country’s statistics department, exports increased 22.9 percent in August, increasing the country’s foreign exchange reserves to $900 million.
In the same month, Business Insider Africa found that the ZiG recorded its largest single-day gain against the U.S. dollar.
The rally followed a near-46% jump in gold production in the first half of the year to 20,104 kilograms, according to Fidelity Refineries.
“We operate in a foreign currency surrender, which entails the surrender of 30% of all export proceeds to the interbank market […]. So the foreign currency liquidity is important in the supply and demand dynamics as regards the cost of money, which is the interest rate,” Mrs. Tafadzwa Bandama added.
