The impact and lessons of the 2008 global financial crisis to Zimbabwe

Abstract

The global financial crisis that had its epicenter in the United States of America affected economies across the globe at varying degrees. Using Zimbabwean national data from The Reserve Bank of Zimbabwe, the study concludes that there is adverse effect of the global financial crisis on exports. An analysis on the graphical trends indicates that the falling commodity prices on the international market resulted in reduction of income from exports. The mining sector was the hardest hit since most of the minerals extracted in the country are exported. Quantifying the total effect of the global financial crisis in Zimbabwe cannot be precisely estimated since the crisis occurred concurrently with economic instability in the country. Since financial crisis is a common phenomenon around the globe, the impact of financial crisis can be mitigated by proper financial regulation, financial development, debt management, good governance, and preparedness of such eventualities. The paper looks at economic events that transpired between years 2007 to 2009 in Zimbabwe.