The last decade, the economy suffered greatly from underinvestment in critical infrastructure such as airports, roads, rail, energy generation and telecommunication infrastructure.
The economy also lost its competitiveness due to production inefficiencies and high costs of doing business.
Zimbabwe’s economy contracted since the beginning of the millennium owing to a litany of challenges including lack of investment to fund the development of critical infrastructure which drives the economy.
Failure to construct airports culminated in limited connectivity between tourist attractions dotted around the country thereby severely affecting the tourism sector which earned Zimbabwe huge sums of foreign currency, notes Minister of Tourism and Hospitality Industry Cde Prisca Mupfumira.
“It is difficult for tourists to easily connect from place to another because we do not have enough airports. Our tourism has greatly suffered due to that,” she said.
The manufacturing and mining sectors, which relied heavily on rail to transport bulky raw materials and finished goods, also suffered as the National Railways of Zimbabwe failed to upgrade its outdated rail equipment and procure new wagons.
The use of road transport to carry bulk goods further damaged the country’s highways and increased transportation costs.
An industrialist, Mr Tafadzwa Musarara said of the entire country’s road network, only a small portion is surfaced.
“As to transportation of grain we had to use road as rail was dilapidated. This led to high costs of more than $30 on top per tonne,” he said.
At a current production rate of around 1 200 megawatts against a projected national demand of 2 000 megawatts, Zimbabwe’s electricity generation capacity is failing to power the critical sectors including manufacturing and mining.
Mr Ainos Ngadya, a renewable energy expert said that lack of investment into renewable energy sources and coal mining meant that there was going to be intermittent energy supplies which continue to hurt the economy.
“Power outages affected almost every industry in Zimbabwe and this was worsened by the high cost of power in the region,” said Mr Ngadya.
According to the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) report internet usage is still low standing at only 50.1 percent of the population.
Mobile penetration rate has stalled over the years mainly due to the high cost of data as parastatals such as NetOne and TelOne lacked funds to invest in modern telecommunication infrastructure.
Further worsening the situation was the banking crisis of 2003 which crippled the financial sector whose effects continue to be felt today in the form of cash shortages.