Zimbabwe’s bizarre economic boom

The effects of the gold rush can be seen far beyond Mazowe. Zimbabwe, often considered an economic basket-case because of its history of farm seizures and hyperinflation, is enjoying an idiosyncratic boom. High prices for the metal and other commodities have led to a surge of cash through its highly informal economy. They have made it easier for authorities to stop printing money and meddling in currency markets; inflation is at its lowest in about 30 years. The IMF has repeatedly revised upwards estimates for economic growth, most recently to at least 7.5% for 2025, almost double the African average.

Yet while Zimbabwe’s economy is doing better than many outsiders assume, its politics are as nasty as ever. Emmerson Mnangagwa, the 83-year-old president, is following his predecessor, Robert Mugabe, in trying to amend the constitution to stay in power, perhaps for life.

Gold is a seam that runs through the country’s history. Cecil Rhodes colonised the area he would name after himself (Rhodesia) in pursuit of what some imperialists thought was the original land of Ophir, the source of King Solomon’s gold. Rhodesians never found much. But in Zimbabwe, as the country became in 1980, gold has grown ever more vital.

In 2025 the country officially produced 47 tonnes of gold, the most on record, more than double a decade ago. (Smuggling means the actual total will be higher.) That generated $4.6bn, about half of all exports by value, as volatility in global financial markets drove demand, pushing up the price. It has almost tripled in five years. “We never imagined these sorts of prices. Thank God for President Trump,” says Victor Gapere, a mining investor.

The effects have been widespread. At artisanal sites miners use mercury and cyanide that are recirculated into the water used for drinking and irrigation. Higher prices also mean more potential rewards for smugglers, which various investigations have linked to political bigwigs. American sanctions on Mr Mnangagwa cite his alleged involvement.

Yet some proceeds from mining end up in the pockets of the hundreds of thousands of Zimbabweans who work in artisanal mining. They can make many hundreds of US dollars a month. “These youngsters are loaded,” says a retailer, describing how sales of motorcycles, electronics and medicines have risen.

Gold is not the only source of growth. The current tobacco crop will be the largest on record. Lithium, chrome and platinum miners, many of them Chinese, have raised production. Zimbabwe’s diaspora, mainly in South Africa, sent back $2.5bn last year. So overall demand is higher than ever, says a banker.

Much of this spending is in the black market, bypassing customs and tax officials. This is “the Congo-fication of Zimbabwe”, says a financier. Houses in Harare are selling, in cash, for record prices: investors prefer property over bank savings because of the spectre of inflation. A private-vault industry is enjoying heady times. Perhaps $2bn-4bn in gold and cash are stored in these safes, says an informed official.

Policymakers have less need to print money when the country is actually digging it out of the ground. The Zimbabwe gold (ZiG), launched in 2024, has so far avoided the same descent into devalued irrelevance as the handful of previous currencies. John Mushayavanhu, central-bank governor since 2024, has largely refrained from forcing adoption of the ZiG in a country that in reality has dollarised. More than a year of relative macroeconomic stability led the IMF in February to agree to its first staff-monitored programme since 2019.

Yet if the economy is less bad than under Mugabe, the politics is not. In February the ruling Zanu-PF proposed a bill to lengthen politicians’ terms from five years to seven, delaying the end of Mr Mnangagwa’s rule from 2028 to at least 2030. If he argues that an amended constitution means he can serve two more terms, he could in theory still be in power aged 100. The bill would end direct presidential elections; MPs would elect him, allowing him to secure his stay through patronage.

Critical MPs and NGOs have either been co-opted or suppressed. Businesspeople fret about the bill, but would not dare criticise it in public. Some say the vice-president, Constantino Chiwenga, a former military chief who helped Mr Mnangagwa topple Mugabe in 2017, is plotting another coup, as he was expecting to take over in 2028. The president has tried heading this off, sacking officers close to his deputy.

Despite earlier hopes that Mr Mnangagwa might normalise relations with the West, his power grab makes it less likely. Zimbabwe has been unable to get official development finance for almost 30 years, having racked up unpaid debts of $7.4bn with the World Bank and several Western governments. Since restructuring that debt depends partly on political reform, the bill will make it harder for European governments to strike a fresh bargain.

The return of Donald Trump, who covets African minerals and cares little about African democracy, has not led to a rapprochement. Some analysts felt his transactional zest would suit Zanu-PF, but the party has barely bothered to make eyes at the Trumpists. In February it rejected an aid offer that would have kept American funding for, among other things, anti-HIV drugs for the country’s 1.3m sufferers.

The logical conclusion is that Zimbabwe’s elite enjoy the status quo. With high commodity prices there is money to be made, licit and illicit. As long as Zimbabwean nannies and gardeners in South Africa send home their pay, a welfare state sustained by the diaspora will endure for the millions not involved in the gold boom. And who needs the West, when you have your Chinese friends? Ultimately opening the economy would mean losing control—and Zanu-PF does not want that.

A respected businessman in Harare notes how visiting investors marvel at the lack of crime. Then he pauses, smiles and cracks a local joke. “The reason we have no criminal gangs in Zimbabwe is that the biggest gang is the ruling party.”