Fixing Zimbabwe’s Economy to cost $5 Billion

Posted by Staff Writer on Wednesday, February 25, 2009 at 5:31pm.

Last year, official inflation based rates on the Zimbabwe dollar were estimated to be at a whopping 231 million percent(231,000,000%).  This once thriving economy is in the last stages of hyperinflation rendering its currency virtually useless.  As a result, Zimbabwe’s new unity government has already taken a multi-currency approach by paying civil servants in US Dollars, Sterling Pounds, South African Rand and other major currencies.

Zimbabwe’s new government, formed between Tsvangirai’s MDC party and President Robert Mugabe’s ZANU-PF, is faced with a mounting challenge of reversing the economic crisis in Zimbabwe manifesting itself in form of hyperinflation.

In recent statements, the new Prime Minister Morgan Tsvangirai said, that it would cost Zimbabwe as much as 5 billion US Dollars to fix the badly battered economy, in addition to aid and increased foreign direct investment(FDI).

In a country with a 94% unemployment rate, a defunct currency, unremitting hunger and a cholera epidemic, it will be no easy task for the new government to stabilize the economy, provide for the sick and restore Zimbabwe to its post independence luster.

Critics blame Mugabe for Zimbabwe’s economic collapse, in part because of land reforms that saw white-owned farms seized and given to Blacks. Already, there are calls to resettle these farmers, if Zimbabwe wants the good will of donor nations.

Africa Business Wire will continue to monitor the situation in Zimbabwe, as the new Unity government works to restore one of the worst economies in the world amidst  a global recession.