About Zimbabwe Country Profile



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About Zimbabwe



Country Profile


Zimbabwe is a landlocked country, centrally situated in Southern Africa and sharing borders with Mozambique (to the East), South Africa (to the South), Botswana (to the West) and Zambia (to the North). It has a surface area of 390 757 square kilometres with approximately 1% being water. The country has a sub-tropical climate which supports a wide range of agricultural activities. Although Zimbabwe is landlocked, the country enjoys access to the sea ports of Beira and Maputo in Mozambique; Durban, Port Elizabeth and East London in South Africa; and Walvis Bay in Namibia. With a population of about 12 million people, the country’s literacy rate is over 90%, one of the highest in Africa. The country was a former colony of Britain and was granted independence in 1980.

Zimbabwe: Leading Urban Centres



Harare is the capital and leading city in Zimbabwe while Bulawayo, once the country’s most important city, is now Zimbabwe’s second city and has been a centre of anti-government movements.

Key Facts and Data


Official Name

Republic of Zimbabwe

Capital

Harare

Government Type

Parliamentary democracy

Head of State President

Robert Mugabe (since 1987)

Head of Government Prime Minister

Morgan Tsvangirai (since 2009)

Population

12,084,000

Land Area

386,670 sq. km

Total GDP (US$)

$7.5 billion

Per Capita GDP at PPP (US$)

$1,500

Currency

Zimbabwean dollar

Source: ISA - Country Report Zimbabwe, 2013


Economic Environment

Zimbabwe maintained a positive economic growth throughout the 1980’s and 1990’s but declined from 2000 onwards where it experienced hyperinflation. The economy experienced severe challenges over the decade, reaching crisis proportions in 2007 and 2008. According to the draft Medium Term Plan (MTP), 2010, Gross Domestic Product (GDP) estimated to have contracted by a cumulative 50.3 percent, official inflation peaked at 231 million percent in July 2008 and capacity utilisation in industry fell below 10 percent by January 2009.

The major factors that contributed to Zimbabwe’s poor economic performance during that period include:


  1. Unstable macroeconomic environment;

  2. Hyperinflation leading to cost pressures and high interest rates;

  3. Low and unstable commodity prices on the international market for primary exports such as gold, tobacco, cotton;

  4. Tight foreign exchange control policy characterised by unofficial multiple currencies (parallel foreign exchange market) and fixed exchange rate policy used for surrender of export earnings;

  5. Foreign exchange shortages hindering the economy’s capacity to import essential inputs for industrial production (Source: Zimbabwe National Trade Policy 2012-2016)




Source: ISA Economic Forecasts, national statistics, 2013

However, after embracing the Short Term Emergency Recovery Programme (STERP) and the multi-currency system in 2009, the economy has been on a recovery path. The introduction of the US dollar as the national currency has eliminated the exchange rate risk and the conditions for doing business are better than in many neighbouring countries.

The below diagram shows that Zimbabwe's economy recorded real Gross Domestic Product (GDP) growth of 9.4% in 2011 before decelerating to 5.0% in 2012. However, according to the African Economic Outlook (2012), GDP growth is projected to improve to 5.5% in 2013.




Source: ISA Economic Forecasts, national statistics, 2013

Zimbabwe’s Economy

The country is endowed with rich natural resources including minerals, energy, popular tourist attractions, as well as an excellent climate for agriculture. In the mining sector, Zimbabwe has huge reserves of over forty different types of minerals that include gold, chrome, nickel, granite, chrysotile asbestos, coal, copper, lithium, platinum and diamonds. The country is among the low-cost producers of minerals due to abundant shallow deposits.

In the agricultural sector, the country produces high quality maize, tobacco, cotton, beef, sugar, tea, coffee, wheat, soya beans, fruits, timber, floriculture and horticulture products, livestock and dairy. The country also has a manufacturing industry base. The major industries include metals, leather and leather products, wood and furniture, clothing and textiles, chemicals, paper and plastic, among others. Most of these manufacturing industries make use of the agricultural and mining output as their raw materials.

Real GDP growth is driven by growth in the above mentioned sectors such as agriculture. Growth in agriculture is mainly driven by tobacco, maize, sugar and cotton. However, for 2012, agricultural output was weighed down by the late onset of rains, and delays in the distribution of inputs. On the other hand capacity utilisation in the manufacturing sector at the end of the first half of 2011 was estimated at 57.2%, an improvement from 43.7% in 2010. However, capacity utilisation in the manufacturing sector is constrained by the limited and high cost of capital, erratic power and water supplies, the high cost of utilities, dilapidated infrastructure, obsolete technologies and frequent machinery breakdown (Source: African Economic Outlook, 2012).

Zimbabwe – Regional Economies

The temperate highlands of central Zimbabwe have long attracted people for their good soil and mild climate. As a result, this region which stretches from Harare to Bulawayo is the centre of Zimbabwe’s industrial and agricultural sectors.


Source: ISA Economic Forecasts, national statistics, 2013

Zimbabwe: Economic Risk Outlook

The below diagram shows the challenges facing the economy including limited resources and the lack of investment, inconsistencies, especially with respect to currency fluctuations and inflation. These downside risks are further exacerbated by the disputes among the government and pending national elections.




Source: ISA Economic Forecasts, national statistics, 2013

Political Environment

During the period 1990 to 2008, the Republic of Zimbabwe experienced a political crisis that negatively impacted the economy of the country. President Mugabe has dominated politics in Zimbabwe since independence in 1980. In the past the opposition was ineffective but this has changed with the formation of the Movement for Democratic Change (MDC). Zimbabwe politics seem to revolve around land reform. President Mugabe’s policies have increasing met with vocal opposition from the international community. The government’s decision to go ahead with land redistribution schemes has thrown the country’s agricultural sector into chaos. While many in Africa see him as a champion of black empowerment, others see him as the man responsible for the economic collapse of what was once one of the continent’s richest countries. The major problem with Zimbabwe’s politics to date has been the concentration of power in the presidency.

Zimbabwe Political Risk Outlook

Political risk levels have soared since President Mugabe began his campaign of intimidation against the opposition and the country’s white population. The political risk levels have soared to some of the highest levels in Sub-Saharan Africa.



    • ISA Risk Ratings

        • 0.0 to 1.9 = Low Risk

        • 2.0 to 3.9 = Low to Moderate Risk

        • 4.0 to 5.9 = Moderate Risk

        • 6.0 to 7.9 = Moderate to High Risk

        • 8.0 to 10 = High Risk
      Zimbabwe’s risk measurements


Source: ISA Economic Forecasts, national statistics, 2013



Zimbabwe’s Leading Political Forces

Zimbabwe African National Union - Patriotic Front (ZANU-PF)

The ZANU-PF party has ruled Zimbabwe since its independence in 1980 and is dominated by its leader Robert Mugabe. The party is facing its biggest challenge with the rise of the opposition MDC. The party originally followed a Marxist-Leninist line with regards to economic issues. However, in recent years, the ZANU-PF has become a party of patronage, trying to balance a wide-range of support groups. For many in the country and throughout Africa, the ZANU-PF represents the fight for freedom against white rule.

Movement for Democratic Change (MDC)

The MDC has become the first serious threat to the ZANU-PF’s hold on power. After losing 2002’s controversial election, MDC leader Morgan Tsvangirai has been put on trial for treason. The charges were only dropped in 2005. The MDC’s roots are among the black working class in Zimbabwe, with its leader being a former miner. The MDC has become the party of people opposed to the ZANU-PF, which includes the unemployed as well as whites. The MDC has been dealt with a series of defeat’s by the ZANU-PF government in recent years. Nevertheless, the party will retain its core of supporters but is unlikely to receive a fair chance at unseating the ZANU-PF at any time in the near future.

The Structure of Zimbabwe’s Government

Zimbabwe is a Semi-Presidential Republic. The structure of the Zimbabwean Government separates power between the executive branch, the legislative branch and the judicial branch.

The Executive Branch

The executive branch currently consists of two executives, the President and the Prime Minister, both of which serve 5-year terms. Robert Mugabe holds the Presidential seat while Morgan Tsvangirai holds the Prime Minister seat. The President is the head of the state and is in charge of the Cabinet. The Prime Minister, on the other hand, is head of government and oversees the Council of Ministers. There are two vice presidents and two deputy prime ministers. Joseph Msika and Joice Mujuru hold the vice presidential positions, and Thokozani Khuphe and Arthur Mutambara hold the deputy prime minister positions.

The Legislative Branch

Legislative power is vested in both government and parliament. The Cabinet and the Council of Ministers hold legislative power along with the elected Parliament. The Cabinet, overseen by the president, is the policy decision-making body. The Council of Ministers headed by the prime minister functions as a liaison office. The parliament is divided between the Senate and the House of Assembly. The House of Assembly consists of 120 members elected by the common-roll electorate, 10 tribal chiefs, 12 presidential appointees, 8 presidentially appointed provincial governors, a speaker and an attorney general. Sixty-six members make up the Senate; five representatives from each province constitute 50 of these members.

The Judicial Branch

The Zimbabwean judicial branch function consists of a Supreme Court and local court system. A Chief Justice is appointed by the president to direct the judicial system in Zimbabwe.

Social Environment

Population

The population of Zimbabwe on 18 August 2012 was 12,973,808 and it is to be noted that the number of estimated Zimbabweans living abroad range between 3 million and 5 million, following the country's economic collapse. Of this population 6 234 931 were males and 6 738 877 were females. This means that the overall sex ratio was 93 males per every 100 females. The population constituted 3 076 222 households, leading to an average of 4.2 persons per household. With an area of 390 757 square kilometres, Zimbabwe has a population density of 33 persons per square kilometre.

Source: Zimstat, 2012

Distribution of Population by Province



The distribution of the population by province for 2012 indicates that Harare with 16 percent of the total population is the most populous province. Manicaland Province is next with 14 percent, followed by Midlands (13%), Masvingo (11%), Mashonaland West (11%), Mashonaland Central (9%), Matabeleland North (6%), Bulawayo and Matabeleland South with (5%) each (Source: ZimStat, 2012).

Total Population by Age Group


Source: ISA Economic Forecasts, national statistics, 2013

Ethnic groups

The major ethnic groups are the Shona, the Karanga and Ndebele. 71% of the population belongs to the Shona ethnic group while 16% are Ndebele. The Shona are the main ethnic group of northern Zimbabwe. The white minority are less than 2% of the population. There are small minorities of mixed and Asian descent.


Source: ISA Economic Forecasts, national statistics, 2013

Languages

The official Zimbabwe languages are English, Shona and Ndebele. English is mostly solely used in all business private and government. Local languages, led by Shona, are the dominant languages of everyday use.








Source: ISA Economic Forecasts, national statistics, 2013

Literacy


Zimbabwe has an adult literacy rate of approximately 90% which is amongst the highest in Africa.

Religions

Zimbabwe religion plays an important role in the day-to-day life of the Zimbabwean people. The majority of Zimbabweans are of Christian faith, often mixing their beliefs and practices with those of local religions.


Source: ISA Economic Forecasts, national statistics, 2013

Business Hours

Business- 8.00 am - 4.30/5.00 pm

Lunch Breaks - Between 12.00 and 2.00 pm

Note: Saturday: Government offices are closed but the commercial sector opens in the morning until noon.

Banking Hours

Monday to Friday: 8.00 am - 3.00 pm

Wednesday: 8.00 am - 1 pm

Saturday: 8.00 am - 11.30 am

Media and Marketing Channels

The rapid adoption of technology is redefining the way Zimbabweans communicate. In the decade ending 2009, the number of mobile subscribers grew tenfold, while the number of internet users grew at nearly three times that rate. In urban and peri-urban areas, 88% of Zimbabweans use mobile phones than watch TV (74%) or listen to the radio (59%). The mobile phone as an internet device is popular with 26% of mobile phone owners (comprised mainly of trendy Aspirants, progressive affluent and evolving Juniors) use their mobiles to go online and visit social networking websites such as Facebook.

Newspapers are also widely read in Zimbabwe’s main urban centres, particularly Harare and Bulawayo. They are mostly bought by relatively affluent people who can afford to buy them. However, each copy sold passes through the hands of many readers.

Climate

Most of Zimbabwe is a highland plateau. In the east, the land slopes downwards toward the border with Mozambique. Zimbabwe has a moderate climate due to its higher altitude. In Zimbabwe, rains come principally in December, January, February and March. Zimbabwe's higher eastern areas usually receive more rainfall than the lower-lying western ones.



By April and May most of the rain is gone, leaving a verdant setting. The nights in June, July and August are much cooler while the days are still clear and warm. During the month September and October the temperatures start rising once again. The month November is quite unpredictable in the sense that it can be hot and dry.

Transportation in Zimbabwe


Road Transportation

There are 88,100 km of classified roads in Zimbabwe, 17,400 km of which are paved. About 5 percent of the network is classified as primary roads and has some of the most trafficked arterials that link Zimbabwe with its neighbours. A portion of the Pan-Africa highway passes through Zimbabwe. This part of the road network plays a major role in the movement of the country’s imports and exports as well as transit freight. Some 14 percent of the network is classified as secondary roads that link the main economic centres within the country, enabling internal movement of people and goods.

In general, Zimbabwe has a good network of tarred roads which are lacking maintenance, but are fit for use. On the major road route from Beira to Mutare, the first 170 km of road after crossing the border of Zimbabwe is in relatively good condition.

Rail Transportation

Rail transport from either Beira or Durban into Zimbabwe has been a challenge, mainly due to the fact that National Railways of Zimbabwe (NRZ) has experienced significant cash flow constraints. Exclusive rail routes from both ports to Harare would eventually have to rely on NRZ, and its limited resources have impacted the operational viability of the system to deliver an efficient service at minimal risk. As a result, commercial businesses have resorted to road transport. Although rail costs are lower from either port to Zimbabwe, commercial businesses currently prefer road because it is viewed as more efficient and less risky.



Source: Zimbabwe USAID – Best Analysis, 2012

Airports

There are three main airports in Zimbabwe namely; Harare International Airport, Bulawayo Joshua Mqabuko Nkomo Airport and Victoria Falls Airport. Harare is the main hub, but its operations and that of the other major airports have been affected by the poor performance of the economy. During 1997-2007 more than twenty scheduled airlines discontinued services in Zimbabwe, including major carriers such as Air France (1997), KLM (1998), Lufthansa (2000), Swiss Air (2000), and British Airways (2007). At present, 12 airlines operate services to and from Zimbabwe. These include Air Zimbabwe, which is the primary domestic carrier owned by the Government, Kenya Airways, Air Malawi, Botswana Airline, South African Airways, South African Airlink, Comair (which is a franchise partner with British Airways), Air Namibia, Fly Kumba, Zambezi Airline, Ethiopian Airlines and Angola Airlines.

Seaports


Zimbabwe is landlocked. Currently, the ports of Durban in South Africa, and Beira in Mozambique, are mostly used for trading of goods.

Port of Beira, Mozambique

The Port of Beira, Mozambique is located on the east African coast, 20 km from the open sea and at the mouth of the Pungwe River at Longitude 34º 50’ E and Latitude 19º 51’ S. It is the second largest port in Mozambique, and is considered one of Africa’s most modern ports in terms of equipment. The port has served primarily as a transit gateway, handling import and export cargo from Zimbabwe and other countries in the region. The Port of Beira handles a wide variety of traffic, including containers, break bulk, general (bulk) cargo (wet and dry), and roll on-roll off cargo. The port handled nearly 160,000 twenty-foot equivalent units (TEUs) in 2011, approximately 2.15 million MT. Port authorities expect this figure to increase by about 50 percent, to 239,000 TEUs, by 2015, based on anticipated future increased capacity. However, congestion is a major challenge at the Port of Beira. This congestion is mostly due to large amounts of silt deposited annually from the two rivers that serve the channel.

Port of Durban, South Africa

Africa’s largest port, the Port of Durban, is situated at longitude 31º 02’E and latitude 29º 52’S, 680 nautical miles northeast of Cape Agulhas, the southernmost tip of continental Africa. The port handles approximately 4,550 vessels, 42.6 million MT of bulk cargo, and 2.5 million TEUs (approximately 34.5 million MT) annually. In comparison, the Port of Beira handled 160,000 TEUs in 2011, only 6 percent of Durban’s annual quantity. The container terminal can handle vessels with a draft of up to 12 metres, and has 2,128 metres of quayside divided into seven berths. The Port of Durban would be the recommended port of entry for goods, largely due to the fact that ocean freight costs to Durban are less expensive than to Beira. And, also transport from Beira to Zimbabwe is also viewed as riskier than transport from Durban to Zimbabwe due to long transit times, breakdowns, and theft along the route.

Sea-Rail Freight Rates from Mauritius to Harare



The sea freight applicable from Mauritius to Zimbabwe, are as follows:

Description

Destination

Currency

20 FT

40 FT

FAS

CSF

Carrier

T/Time

OCEAN

SA (Durban)

USD

600

1100

80/160

11

MSC

5 days

 

























Description

Destination

Currency

20 DV (22000kg)

40 DV (26000kg)

THC

ISPS

Carrier

T/Time

RAIL

ZIMBABWE (Harare)

ZAR

39575

55775

1229/1816

12 USD

MSC

21 days

Notes:

Local charges upon departure

Description

20 FT

40 FT

Loading

MUR 2247

MUR 4494

Marine

USD 50

USD 100

Handling

USD 33

USD 66

B/L

USD 65

USD 65

Dossier Fee

MUR 500

MUR 500

Agency Fee

MUR 500

MUR 500

Customs Fee

MUR 850

MUR 850

Fowarding Fee

MUR 300

MUR 300

Air Cargo rates from Mauritius to Zimbabwe

Cargo service by Air Mauritius is as follows:



Destination

Airport

Routing

Airline

MIN

-45K

+45K

+100K

+200K

+300K

+500K

+1000K

Zimbabwe

Harare

Via JNB




3500.00

255.30

99.75

94.50

87.15

86.15

74.05

73.00







Via JNB

EB/4Z

3500.00

255.30

79.30

74.05

66.70

65.70

64.60

63.55


The Zimbabwean Market Context


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Understanding and targeting consumers groups in Zimbabwe


The Nielsen Emerging Market Insights Study, 2012 provides an in-depth understanding of the Zimbabwean market segments and consumers behaviour. The study is based on face-to-face surveys from a sample of 5,000 urban and peri-urban residents between the ages of 15 and 45 across around key cities The study provide vital information into growth opportunities within the marketplace, insight into consumer attitudes that drive decisions on what Zimbabwean consumers watch and buy.

The Zimbabwean economy is fast recuperating after a decade of economic contraction. This has resulted in greater confidence across all consumer groups. Mauritian companies eager to participate in Zimbabwe’s growth story will have to consider strategies that target both the low income and affluent consumer segments. The high literacy combined with high penetration of mobile and print media makes it convenient for companies to communicate to consumers their new product offerings.

It is important to note that despite the recent growth, the wide income disparity between consumer segments still exists. Nielsen’s Emerging Markets Insight Survey, conducted in different cities in Zimbabwe stated that at the lower end of the income scale, Struggling Traditional and Female Conservatives made up of 52% of respondents, but accounted for just 35% of the total income. Though they have high usage of mobile phones, TVs and radios, these segments are underdeveloped for print and internet and display lower consumer packaged goods (CPGs) consumption than other Zimbabweans.

In sharp contrast, Trendy Aspirants and Progressive Affluents comprised just 11% of the population, but accounted for 28% of the total income. These consumer segments are more likely than the general population to own consumer durables such as TVs, DVD players, satellite dishes, refrigerators, and personal computers/laptops. They are also more likely to read newspapers and magazines and tend to use their mobile phones to connect to the internet. Trendy Aspirants like to spend time with friends and are willing to pay more for products that are tailored specifically to their needs.





Source: (Emerging Markets Insight Survey- 2012)

Overall, Zimbabweans are family oriented, but traditional values do not limit a free lifestyle. Though affordability, familiarity and availability are the top drivers of Consumer Packaged Goods category purchasing, Zimbabweans also continuously express an interest in trying many newer categories like air fresheners.


Consumers’ attitude to price


Zimbabweans are very conscious and sensitive to price to the extent that they will buy a product which is a cent less from one shop to another. It is generally noted that 60 percent of high income earners, 88 percent of middle income earners and 90 percent of low income earners place price ahead of product quality, personal needs and preferences, brands, shop reputation, displays, and family size in determining quantity of goods purchased, because Zimbabwe is just recovering from a depressed economy.

Consumer Spending

Consumer behaviour focused on how individuals make decisions to spend their available resources (time, money, effort) on consumption-related items. This includes what they buy, why they buy it, when they buy it, where they buy it, how often they buy it, and how often they use it.

Consumer Packaged Goods (CPG) categories account for 31% of Zimbabwean monthly household expenditure. An organised retail landscape is popular in Zimbabwe as almost over 78% of the people buy their groceries mainly from supermarkets. Traditional trade outlets, such as tuck shops (small shops selling mostly food items) or kiosks, are less important in Zimbabwe, with only one in four of consumers likely to shop at them.

Affluent consumer segments, such as Trendy Aspirants and Progressive Affluents, showed a tendency towards buying value-added products like breakfast cereals, energy drinks and air fresheners. In contrast, lower income consumer segments, such as Female Conservatives and Struggling Traditionals, have low to average consumption of most CPG categories, yet they embrace a desire to try products like packaged juices, which are higher on the value chain. It has been noted that across all segments, affordability, familiarity and availability are the top purchase drivers.

Consumers’ attitude to quality and brand

The important product decisions by Zimbabweans are variety, product performance, product features, product design, product presentation, sizes and brand name. Quality is a critical purchase criterion for Zimbabwean high income earners. Although the middle and the low income earners appreciate quality they are limited by their disposable income. Brands also play an important role in Zimbabwean purchase decisions. The research indicates that Zimbabweans are loyal to their long tasted brands and the majority of consumers have a tendency to equate popular brands with quality. For example Mazoe drink is popular to Zimbabweans because of its quality and the brand has stood because of its taste giving it an advantage over other drinks.



Source: (http://www.nielsen.com)

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