Zimbabwe's Export Performance: The Impact of the Parallel Market and Governance Factors
IMF Working Papers, January 1, 2006
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- Zimbabwe's Export Performance: The Impact of the Parallel Market and Governance Factors
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Bibliographic details
- Authors: Sònia Muñoz
- Published: January 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451862881.001
Summary and central finding
- The paper analyzes Zimbabwe's export performance in recent years and identifies factors that could improve export performance from both a quantitative and qualitative perspective.
- Improving export performance is critical to a turnaround in Zimbabwe's economic situation.
- The growth rate of total exports declined dramatically in the early 2000s, following a large real appreciation of the currency and the introduction of the fast-track land reform program.
- An important finding: policies that reduce (eliminate) the parallel market premium and lower ethnic tensions would be key to promoting export growth.
Empirical observations and drivers of export decline
- Timeline: dramatic decline in export growth occurred in the early 2000s.
- Key proximate drivers cited:
- A large real appreciation of the currency.
- The introduction of the fast-track land reform program.
- Governance and market distortions highlighted as impediments:
- The parallel market premium (a multiple currency/foreign-exchange market distortion).
- Ethnic tensions affecting governance and export performance.
Policy implications and recommendations
- Reduce or eliminate the parallel market premium to promote export growth.
- Address governance factors tied to ethnic tensions to improve export outcomes.
- Improve exchange rate practices and related competitiveness issues as part of a package to revive exports.
Subject areas and keywords (as provided)
- Subject: Exchange rates, Export performance, Exports, Foreign exchange, International trade, Multiple currency practices, Real exchange rates
- Keywords: Africa, Competitiveness, exchange rate, Exchange rates, export, export data, export demand equation, export growth, Export performance, export supply, Exports, Governance, Multiple currency practices, muted export response, Parallel Market, Real exchange rates, WP