As the year 2014 comes to the
end, Zimbabweans continue to ponder on what year 2015 promises on the economic
front. Part of that debate focuses on 2015’s $4.1bn national budget which was
presented by Finance Minister Patrick Chinamasa in November. It seems two
schools of thought are competing on reading 2015. Firstly, the government or the
“new government” with new policy makers seem to promise a robust implementation
of Zimasset and hence better economic fortunes for Zimbabwe in 2015 going
forward. On the other hand, ordinary citizens who were largely cash strapped in
2014 and smarting from the introduction of “valueless” bond coins and a
non-delivered public service bonus are already bracing for a worse 2015.
As things stand, it appears the
external factor of weather seems to be bringing smiles to the faces of ordinary
Zimbabweans as the xmas and new year week seems to be wet, hence good for both
crops and livestock; themself significant factors of household food security
and food sovereignty.
This article seeks to contribute
to the debate on Zimbabwe’s economic fortunes. In particular, it shall focus on
the 2015 budget and compare it with those of other countries in the region, and
assess whether Zimbabwe is making progress or regressing. Whilst we have the
latitude to use many economic indicators, a relative analysis of Zimbabwe and
her neighbours’ gross budgets will be sufficient in assessing where Zimbabwe
will likely lie in 2015.
In 2014, Angola, Mozambique and
Namibia did far better than Zimbabwe both in real and nominal terms of economic
development. Their projected budgets for 2015 are much higher than that of
Zimbabwe. Their economies are also growing at faster rates than that of
Zimbabwe.
The notes below display these
economic figures and rough development trends for these countries.
Zimbabwe’s 2015 national budget
remains largely pegged at $4bn, with a growing budget deficit meaning Zimbabwe
may fail to pay her bonuses again in 2015.
Angola, with 27 years of
regression during its civil war has a projected 2015 national budget of $70bn
which will be 17 times bigger than that of Zimbabwe.
Mozambique, also with a sad
history of a post independent civil war has a growing budget of $8.9bn, double
that of Zimbabwe in 2015. Using the gross investment flows into the region,
Mozambique tops with more than $2bn of investments in 2013/2014. Zimbabwe had
less than $400million real new productive investments in 2014.
Zambia, Zimbabwe’s Siamese twin
has out leaped her southern sister. Zambia’s budget for 2015 is pegged at $11.8bn,
which is two times bigger than that of Zimbabwe. Zambia like Zimbabwe is
largely a mining economy even though it is diversifying its economy.
To really display what is
happening to Zimbabwe, it is important to state that Zimbabwe had a higher
budget in US dollar terms in 1980. Its economy was more diversified and its
growth rate was far much higher than most of these countries in this cluster.
This story of Zimbabwe’s demise
is not new. The key policy questions are-perhaps; why and is there light at the
end of the tunnel?
The reasons for Zimbabwe’s
economic collapse are many and have historically invited serious debate and
disagreements. These factors jointly contributed (or still contribute) at
different times and in different degrees to Zimbabwe’s sorry state.
The ruling party and its scholars
argue that the reasons for Zimbabwe’s collapse are largely due to neo-colonial
forces, with Western international institutions responsible through both covert
and overt means to destabilise Zimbabwe.
Others cite leadership failure at
the national policy level as Zimbabwe’s challenge. This is what many political
scientists discuss as the failure of the post-colonial state in Africa,
Zimbabwe included.
From an economic perspective, every
fair economist concurs with those that argue that leadership failure is the
significant factor in Zimbabwe’s fall. Leadership failure including lack of
viable alternatives is the biggest challenge confronting Zimbabweans in 2015
and the medium term.
It is important to qualify the
phrase leadership failure as it is loaded and may mean different things to
different people. The leadership discussed herein refers to leadership of the
state. The state has a primary duty to promote growth and stability of business
and the economy. The Zimbabwean state, rather, focuses on “deception and
operations” thereby making investors and ordinary citizens largely uncertain
thereby taking a normal “wait and see” stance which further leads to zero or
negative response to the numerous and incoherent but often false incentives/declarations.
The current rejection of bond
coins and mass-withdrawal of money from banks is a good example.
The Zimbabwean economy in fact
shrunk in 2014, and yet the government “declares” a 3% growth rate. A
government that pumps 80% of its revenue to salaries and allocates 12% of its
budget to defence in times of relative peace reaps what it sows- hunger and
recession!
At the risk of sounding pessimistic and losing hope on the
future, perhaps, the fitting question would be: is there any hope on Zimbabwe?
From an economic perspective, yes, there is
lots of hope on Zimbabwe. Zimbabwe is fairly endowed with economic resources
ranging from natural resources to brain power. Investors from Zimbabwe and
abroad have enough information on economic opportunities that Zimbabwe presents.
That piece of information is golden and other things being equal, Zimbabwe can
easily turn-around within a year of sound, coherent and business friendly
policy regime.
Assuming everything constant, if
Zimbabwe were to fully explore only one mineral -platinum and purify it in
Zimbabwe and sell it as a finished product, her economy can easily hit the
$20billion mark per year.
The leadership that Zimbabwe
needs is to change from politics of isolation into that of engagement.
Hospitality must be seen not as a limited function of tourism only, but
international relations.
The noise, both ideological and
political that Zimbabwe makes is an antithesis to her economic development
endeavours.
The risks of remaining behind the
region in terms of development are too many, including, at some stage becoming
the regions dumping ground. Unbridled corruption and politicisation of business
that the leadership along Samora Machel Avenue promotes and protects choke
entrepreneurship.
Business leadership is not
directly co-related to being a Zanu PF party member and of a particular faction
in fact. Promotion and protection of business has to be non-partisan and in the
national interest.
The very basic values of care,
respect, tolerance, honesty, fairness are the very same magnets of investment
that the political leadership in Harare knows but practices not.
Growth and happiness is possible
Zimbabwe- if and only if Zimbabwe drifts from its narrow and person/party centred
leadership schemes of Mnangagwa /Mujuru or Zanu PF/MDC onto national
development plans which promote growth and development of the country
irrespective of race, politics, ethnicity and gender.
Party politics and personalities
must be junior to the country’s development plan.
Sadly for Zimbabwe, the state was
captured. This state capture in Zimbabwe is defined along party politics,
tribe, gender and race. The more associated one is to those in power the
better. The stampede by people of the Midlands province to swear allegiance to
the new Vice President Mnangagwa at his celebration party was shocking but
revealing how and why things (don’t) work in Zimbabwe.
Zimbabwe has no serious economic
development plans like Angola or Mozambique. Zimasset is not an economic
development plan (EDP), but a stepping stone towards an EDP.
Now that Zimbabwe has a new
cabinet, does that mean change for the better or more of the same in terms of
economic development?
The hope is that things change
for the better as the social cost of regression will be terrible especially to
vulnerable populations.
Conversely, this continued
economic collapse may, soon, bring demise to the current political edifice. The
economy and its mismanagement are bigger threats to Mugabe and his succession
politics than Mujuru and her team.
The
choice is the leaderships to make- propaganda or delivery.
Welcome 2015!
Itai Zimunya is a socio-economic analyst based in Mutare and
participates in the Institute for new economic thought.