Geert Bekaert and Campbell R. Harvey's
Chronology of Economic, Political and Financial Events in Emerging Markets
Major Political and Economic Events
White voters approved a new constitution based on black majority rule but retaining white control of the military and security forces as well as the judiciary and the civil service.a
UN Security Council lifted the international embargo on trade with the country.a
Civilian elections. The Rhodesian Dollar was decoupled from the South African Rand. The unit's exchange value was linked to a "basket of currencies."a
Country became legally independent as Zimbabwe. Currency renamed Zimbabwe Dollar.a
Zimbabwe joins IMF.a
New foreign investment guidelines published which stipulated that foreign companies must provide a minimum 20% local participation in existing enterprises.a
ADR effective date. (Company=ZAMBIA CONSOLIDATED COPPER MINES LIMITED., Exchange=OTC)a11
All remittances of dividends, branch and partnership profits, rent and other income from nonresident equity holdings were suspended, except for dividend and profit remittances or venture capital entering after September 1,1979. a
Prime Minister Mugabe committed one of Africa's few remaining multiparty democracies to one-party rule and entrenched his supremacy as head of a new Politburo at his party's first congress in 20 years. New constitution to be drawn up based on Marxist-Leninist principles.a
President Mugabe announced that the Assembly seats reserved for whites would be abolished and the government would increase control of the economy to spur development.a
Remittances declared from March 27, 1984 through December 31, 1985 can be released by means of six-year 4% government bonds.a
United States suspends aid to Zimbabwe.a
As promised, the 20 seats reserved for whites in the National Assembly were abolished.a
The percentage of profit and dividend remittances was halved to 25% for new investments which entered the country before September 1979. Regulations involving the investment of surplus funds owned by foreign companies were relaxed.a
At the end of 1987, the nation's two rival political parties signed a "unity agreement" and were merged. Mugabe was elevated to executive President, the Premiership being dissolved. Former rival, Joshua Nkoma, became Vice President. One-party Socialist States was achieved committed to Marxist-Leninist principles.a
1988-1989 Budget announced that 75% of profits that foreign companies keep in Zimbabwe will be taxed. The Zimbabwe stock exchange was revived after a prolonged period of inactivity.a
Subject to the approval of the Reserve Bank, repatriation of funds invested in external government bonds at accelerated rates, depending on discounted sales prices of net equity, was allowed.a3(first entry)
Remittances of after-tax profits of up to 100% would be approved depending on the priority status of investments. The regulations applying to the use of blocked deposits were liberalized, whereby transfers of such funds to approved new investors at a freely negotiated price were permitted.a3
It was announced that the economy was to be gradually deregulated. A one-stop investment center was to be created to help attract overseas capital and foreign companies were to be able to borrow domestically up to 25% of their shareholder's funds. Restrictions on the payment of dividends to foreign investors were also relaxed. Special tax concessions were to be granted to companies expecting to be major foreign exchange earners. A new opposition party was formed.a
Plans formulated to revise the Constitution in order to allow for the confiscation of commercial (white) farmland for redistribution to blacks.a
President Mugabe scored a decisive political victory, his party taking 116 of 120 seats in the Parliament. A Limits on remittances of profits and dividends were eased. Mehrez and Kaufmann Liberalization date. a1
Signed investment protection agreement with the Untied States, insuring American companies against political risks. Later, a US$16 billion five-year Structural Adjustment Program was announced.a
Parliament authorized the government to confiscate factories, farms and private residences when it sees fit, with payment being whatever the regime finds appropriate.a
Zimbabwe launched a five year (1991-1995) Structural Adjustment Program. Designed to cut the fiscal deficit substantially by 1994. 
The World Bank's International Development Association made a special loan of US$150 million to help fund drought relief.
Approximately 6 million people registered for the government's drought relief program. On Dec. 3, a group of fifteen western nations agreed to provide Zimbabwe with US$1.4 billion in grants, soft loans, and commercial loans for 1993.
The use of ERS funds was extended to cover repatriation of FDI and cross-border investments.a3
Finance Minister Chidzero announced new investment guidelines and export incentives which effectively opened the Zimbabwe Stock Exchange to foreign portfolio investment. Foreign investors may participate on the ZSE provided that: 1) they finance the purchase of shares by inward transfer of foreign currency through normal banking channels; 2) the purchase of shares will be limited to 25% of the total equity of the company (excluding existing foreign shareholdings prior to May 1993) with a single investor acquiring a maximum of 5% of the shares outstanding; 3) investments will qualify for a 100% remitability after taxes; 4) capital and capital gains are freely remittable after capital gains deductions. In addition, foreign investors participating in the stock market, under the new rules, are not required to obtain exchange control approval and can register share purchases either in their own names or names of nominee companies.
Gold producers undertaking new expansion projects were permitted access to offshore financing in the form of gold loans.a3
Bekaert/Harvey Official Liberalization date. [NBER version].
Foreign investors were permitted to participate in the Zimbabwe Stock Exchange Market provided that they finance any purchase of shares with foreign currency received in Zimbabwe through normal banking channels. Purchase of shares by foreign investors would be limited to 25% of the total equity of the company, with limit for a single investor of 5% of the shares on offer. The initial investment plus any capital gains and dividend income would be freely remittable. Foreign investors were also permitted to invest up to a max of 15% of the assets brought to Zimbabwe in primary issues of bonds and stocks. Locally owned companies would be allowed to buy blocked funds from the original owners for investment purposes by using ERS funds provided that they export at least 75% of their output.a3
New investment guidelines effective June 23.
Bekaert/Harvey Official Liberalization date. [Final version].
Kim and Singal Liberalization date.
Exchange controls were abolished and interest rates was liberalized. Mehrez and Kaufmann's second Liberalization date. a1
Reserve Bank removed most remaining restrictions on current account transactions. Reserve Bank introduced a new two-tier foreign exchange system to establish a market-determined exchange rate for the Zimbabwe dollar.
The limit on foreign borrowing without prior approval of the External Loans Coordinating Committee was raised to US$5 million.a3
Two-tier system abolished leaving a single exchange rate to be determined by the inter-bank market.
All dividends declared by foreign investors in the export sector after Jan. 1, 1995 would be allowed to be remitted abroad after payment of applicable taxes.a3
A timetable for the liquidation of blocked funds relating to profits and dividends earned on foreign investments made prior to May 1993 was established.a3
In early April, President Magabe's ruling ZANU-PF party secured an overwhelming victory in the country's general elections.
(1)The "switching" of blocked funds, which allowed release of blocked funds under certain conditions if purchased by a foreign investor or local exporter, was discontinued; (2) Foreign investments of up to 25% in primary issues of stocks and bonds were permitted.a3
On Dec. 29, the Reserve Bank announced that it was increasing foreign ownership limits for ZSE-listed companies to 35% of the total equity of the company, from 25%.
New ownership rule took effect on Jan. 1. Raised limit to 35% from 25% for foreign ownership. (Announced December 29, 1995).
President Mugabe re-elected to a six-year term.
Appointment of Herbert Murerwa as finance minister helped bolster market sentiment.
Stocks rose following a 2% cut in the Reserve Bank's rediscount rate and lower inflation figures.
Reserve Bank eased the limit on foreign portfolio investment in a listed company from 35% to 40%.
In mid-October, a 0.5% cut in the Reserve Bank's rediscount rate and lower money market rates triggered a three-week equity rally.
Elimination of all duties on capital goods.
T-bill rates increased to more than 22%, up from around 16.6% , due to the inflation worries and pressure on the Reserve Bank by the IMF to maintain real interest rates.
The government offered for sale 80% of the shares in the Commercial Bank of Zimbabwe. The World Bank agreed to release $62.5 million in balance-of-payments aid to Harare.
Zimbabwe Agriculture Minister Kumbirai Kangal asked people to prepare for possible El Nino-induce drought.
President Robert Mugube stated his government's commitment to privatizing loss-making state enterprises. A failed coup attempt in Zambia.
Import cover fell to two months low. On November 11, the Zimbabwe dollar tumbled 10% against the U.S. dollar and depreciated as much as 29.4% on the next day. The World Bank had agreed to release Z$860 million to Zimbabwe for balance-of-payments support.
The government raised z$4 billion to pay independence war veterans and seized some 13.7 million acres of the country's prime industrial land for blacks who do not own land. $100 million in credits by the IMF. The World Bank had provided $60 million in balance-of-payments support.
The government said it would establish a privatization agency to spur the stalled privatization program.
A nationwide anti-tax strike called by trade unions.
President launched the second phase of the Zimbabwe Programmer for Economic and Social Transformation. Inflation surged to a two-year high of 27.9% in March. United Merchant Bank's license was withdrawn after its incapable of paying its debts.
IMF's announcement of a $176 million standby credit to support Zimbabwe's effort toward market reforms.
            9808 The IMF’s suspended its expected $176 million dollar loan because of the government’s re-application of price controls on staple food.
          980901 (Provisions specific to commercial banks and other credit institutions) The net open position limits of foreign exchange dealers were reduced.a3
          980930 (Provisions specific to commercial banks and other credit institutions) Capital requirements ratios were increased.a3
             9811 High annual interest rates of 42.0%, yearly inflation running at 34.3%, and a currency depreciating monthly at 4.0%.  On November 20, President Mugabe announced a plan  to forcibly acquire 841 mostly white-owned farms as part of a land redistribution scheme.
             9902 Political instability was expected by the detention and alleged torture of journalists by the military and President Robert Mugabe’s attack on judges for questioning his government’s commitment to the rule of law.
          990401 (Controls on liquidation of direct investment) The Policy allowing the creation of 12-year and 20-year 4% government bonds out of blocked profits accruing on pre-1993 investment was abolished.a3
Insurance giant Old Mutual was listed.
The IMF approved $193 million dollar loan, conditional on the government tightening fiscal and monetary policies, removing price controls, and allowing market forces to determine the exchange rate.
Zimbabwe Finance Minister Herbert Murerwa announced unfavorable annual budget announcement.
Parliament passed the Posts and Telecommunications Bill for privatization and liberalization of the telecommunication sector, permitting foreign investors to buy up to 40% of shares of dually-listed Zimbabwean companies. The IMF rejected the government pleas for an extension in implementing economic reforms. Cyclones devastated Zimbabwe, damaging the main timber-growing areas of Zimbabwe.
The Reserve Bank of Zimbabwe (RBZ) and local commercial banks agreed to allow the Zimbabwe dollar to depreciate by 10%.
Econet was investigated for issuing shares without shareholder approval and for allegedly transferring 1.8 million shares to London without official permission. The government introduced new measures requiring local financial institutions to obtain regulatory approval for corporate mergers.
The World Bank suspended project funds following overdue loan repayments.
The U.S. agreed to fund a US$57 million central depository for the ZSE to ensure improvements. The ruling ZANU PF party lost 56 seats to the Movement for Democratic Change (MDC), the opposition group, and the agriculture sector incurred losses in the escalating violence, after 1000 farms were seized by supports of the ZANU party.
The new finance minister devalued the currency by 24%.
Mobs of angry protesters demanded President Robert Mugabe's resignation. 3270 commercial farms were earmarked for redistribution. Zimbabwe faced its worst economic crisis since independence with unemployment, interest rates and inflation all soared to record highs. The ZSE ordered listed companies to release inflation-adjusted interim financial statements. Zimbabwe also faced fuel and electricity shortages, accumulated external debt arrears and the threat of HIV/AIDS to the labor force.
Interest rates reached 10-year lows.
Foreign currency shortages.
IMF threatened to suspend balance-of-payment support due to various concerns.
In the second quarter, the Reserve Bank of Zimbabwe (RBZ) responded with policy measures to restore viability of the weak mining sector. The Gold Floor Price Support Scheme set the gold price at US$343 per ounce and the currency was devaluated by 24%.
The government announced that it would sell its shares in listed companies.
Defence Minister Moven Mahachi killed in a car crash - the second minister to die in that way in a month
Zimnat Lion and First Banking listed on the ZSE and Trust Banking's IPO opened.
In the third quarter, the government imposed new price controls for retail importers and the RBZ tightened export and import controls. Zimbabwe failed to service its arrears and became ineligible to obtain IMF loans. Three local commercial banks were fined for buying scarce foreign currency on the black market. The government proposed a surtax on banking profits stating abnormal profits.
200107 Finance Minister Simba Makoni publicly acknowledges economic crisis, saying Zimbabwe's foreign reserves have run out and warning the country faces serious food shortages. Most western donors, including the World Bank and the IMF, have cut aid because of Mugabe's land seizure programme.
The RBZ raised the price of gold to US$430 per ounce.
The Abuja Agreement on land policy brought hope for a fair resettlement program.
The president and the ruling Zimbabwe National Union-Patriotic Front party intimidated the judiciary branch and media. Price controls were extended and hyperinflation worsened.
200110 Visiting Commonwealth ministers say the government has done little to honour commitments to end the crisis over the seizure of white-owned land.
200202 Parliament passes a law limiting media freedom. The European Union imposes sanctions on Zimbabwe and pulls out its election observers after the EU team leader is expelled.
200203 Mugabe re-elected in presidential elections condemned as seriously flawed by the opposition and foreign observers. Commonwealth suspends Zimbabwe from its councils for a year after concluding that elections were marred by high levels of violence.
200204 State of disaster declared as worsening food shortages threaten famine. Government blames drought, the UN's World Food Programme says disruption to agriculture is a contributing factor.
200206 45-day countdown for some 2,900 white farmers to leave their land begins, under terms of a land-acquisition law passed in May.
200209 Commonwealth committee - including leaders of South Africa, Nigeria and Australia - fails to agree on further sanctions against President Mugabe.
200211 Agriculture Minister Joseph Made says the land-grab is over. He says the government has seized 35m acres of land from white farmers.
200303 Widely-observed general strike is followed by the arrests - and reported beatings - of hundreds of people. A BBC correspondent says the evidence points to a crackdown of "unprecedented brutality".
200306 Opposition Movement for Democratic Change (MDC) leader Morgan Tsvangirai is arrested twice, amid a week of opposition protests. He is charged with treason, adding to an existing treason charge from 2002 over an alleged plot to kill President Mugabe
200311 Canaan Banana, Zimbabwe's first black president, dies aged 67
200312 Zimbabwe pulls out of Commonwealth after organisation decides to extend suspension of country indefinitely.
200403 70 men - said to be mercenaries planning coup in Equatorial Guinea - detained and charged after their plane is impounded in Harare




Regulations on Foreign Investors

Restrictions: Ownership of a Zimbabwe company is limited up to 5% per individual investor and 25% (excluding multinational investors) collectively for all foreign investors.

Taxation: 15% withholding dividend tax. A deduction of 10% for annual inflation is allowed. Capital gains of less than Z$1,000 are not liable for taxation.a6


Restrictions: No ownership limits or restrictions on foreign investment.

Taxation: Same that except a property transfer tax of 2.5% is paid by the seller of unlisted securities. The capital income tax rate is 30%.a7


The government re-imposed exchange controls in November 2002. According to the U.S. Trade Representative, “The Government of Zimbabwe has also placed severe restrictions on exporters, who are required to remit 50 percent of their foreign currency earnings to the Central Bank for exchange at the official rate.” The official exchange rate is Z$55 to $1, but the parallel exchange rate is Z$1,500 to $1. Virtually all capital transactions between residents and non-residents are subject to controls and government approval. zz1

Last updated on 7/9/04 by Jerome Mo, Duke University

tax rate is 30%.a7

2002 The government re-imposed exchange controls in November 2002. According to the U.S. Trade Representative, “The Government of Zimbabwe has also placed severe restrictions on exporters, who are required to remit 50 percent of their foreign currency earnings to the Central Bank for exchange at the official rate.” The official exchange rate is Z$55 to $1, but the parallel exchange rate is Z$1,500 to $1. Virtually all capital transactions between residents and non-residents are subject to controls and government approval. zz1

Last updated on 7/9/04 by Jerome Mo, Duke University