History, Politics, Economy and Startups in Zimbabwe.

Zimbabwe is a country of ancient ruins.
Zimbabwe hosts unique dry stone towers of the Great Zimbabwe — the ancient Zimbabwe Kingdom’s remnants. In fact, Zimbabwe today is covered by ruins not only archaeological but also political, economic and social.
Until 1965 Zimbabwe (at that time named Rhodesiaafter the British mining tycoon Cecil Rhodes) had been one of the most prosperous countries in Africa. After the Unilateral Declaration of Independencewas signed by a former pilot and farmer Ian Smith on 11 November 1965, the anti-colonial movement, led by two parties Zimbabwe African National Union or ZANU and Zimbabwe African People’s Union or ZAPU, arose in opposition. The first rebellion faction was headed by a former teacher Robert Mugabe and the second — by a railroad trade unionist Joshua Nkomo.
The devastating civil war between Rhodesian army and ZANU/ZAPU supported by communists USSR and China had started in 1968 and continued until 1979. At the same time the United Nations imposed economical and political sanctions on Smith’s government. That double pressure had cause the Lancaster House Agreement which ended the war and led to 1980 elections won by ZANU.
After assuming the Presidential post Mugabe took a classical Marxist-Leninist course on a complete nationalization of the economy and on establishing one-party state. In 2000, that politics culminated in the Fast Track Land Program which announced the forced nationalization of all lands belonging to the white minority population. This program had had a catastrophic results — economically, politically and socially.
Lacking necessary investments, experiencing a shortage of skilled labor (all professionals urgently fled the country), overwhelmed by external wars and corruption Zimbabwean economy reached the point of collapse at the start of 2000th. From 2004 for 2009 the inflation rate in Zimbabwe had became legendary. During the five years it reached the unprecedented level of 231,000,000 percentages.
Pursuing another branch of its one-sited politics Mugabe suppressed any signs of internal opposition to his regime applying as much of the brutal force as possible. He even employed the North Korean ‘spetsnaz’ to eradicate the political protests in one of Zimbabwean districts. As a result, absolutely atrocious incidents of genocide were widely reported all across the country.
On a social level, Zimbabwe nation, which in the colonial time was one of the most educated and advanced in Africa, was quickly reduced to a dismal conditions. The unemployment rate reached 95% — the World’s absolute record. The educational system deteriorated to the point when schoolchildren, lacking papers and pens, had to write their lessons on dusty floors by fingers.
After 2009 dollarization of economy, several successive Zimbabwean governments had tried to improve the situation. However, with a corrupt legal system, absence of international investments and dilapidated educational institutions this task proved to be unsurmountable. In 2016 the budget’s deficit reached 12% of GDP and massive layouts were announced.
Zimbabwe — one of the most promising countries in Africa at the start of 20th century — is the country in ruins at the beginning of 21st.
Zimbabwean high-tech entrepreneurs may soon find themselves squeezed between a rock and a hard place. On the one side, it’s a decreasing disposable income of population, from which 60% works in agriculture and more than 80% are living below poverty line. On the other — increasing pressure on SME from side of government, which gradually tightens its tax (personal effective income tax rate stays on 25%) and legal regimes in an attempt to stabilize state microscopic budget (less than 2% of 16-billion-size GDP).
On top of that, current country’s educational system is not capable to meet the requirements of high-tech businesses. Highly centralized and bureaucratized local system of scientific research institutions has proven to be disconnected from economy of innovation. Additionally, with skyrocketing unemployment, many young people are leaving this country in a search for jobs. Those few Zimbabwean startup incubators (located mostly in Harare), which are funded by representative offices of foreign telecom corporations, are not capable to alleviate general deficiency of local innovation ecosystem.
Business Notes for Startups Founders:
- political climate: not friendly;
- economic climate: not friendly;
- regions to focus: locally;
- industries to focus: FinTech, mobile, E-commerce, E-Jobs;
- major limitations: shrinking economy (in four previous years GDP growth rate has diminished from 5% to almost 0%), high bureaucratic, tax and legal barriers for SME, outdated educational system, concentrated, agriculture industry based economy, absence of high-tech sector outside of few big corporations, very high unemployment, very low personal income (per-capita less than $200);
- stimulus: low costs, low competition, expanding young population;
- opportunities: to bootstrap on local niche markets in mobile e-commerce, e-jobs, ads and FinTech.