Zimbabwe’s economy: any hope for 2015?

Zimbabweans continue to debate the 2015 $4.1bn national budget which was presented by Finance Minister Patrick Chinamasa last month. Some say it is shallow, some say he did his best and some did not even follow it beyond just knowing some budget was passed last month. 

This article seeks to contribute to that discussion, especially taking the whole budget and economy and compare it with those of other countries in the region, and assess whether Zimbabwe is making progress or regressing. Whilst economic indicators are many, a relative analysis of Zimbabwe and her neighbours and how they manage their economies frames the scope of this paper.

Angola, Mozambique and Namibia are all doing 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 rate than that of Zimbabwe.

The notes below display these figures and rough trends.

Angola, with 27 years of regression during its civil war has a projected 2015 national budget of $70bn, 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 $29.8bn, which is seven 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 invite serious debate as well. These factors jointly contributed (or still contribute) at different times and in different degrees.

The ruling party and its scholars argue that the reasons for Zimbabwe’s collapse are neo-colonial, with Western international institutions responsible through covert and overt regimes of restrictions/sanctions.

Others cite leadership failure at the national policy level as Zimbabwe’s poison. This is what many political scientists discuss as the failure of the post-colonial state to move beyond the struggle to development.

From an economic perspective, and being a researcher on Zimbabwe, I concur with those that argue that leadership failure is the significant factor in Zimbabwe’s fall.

Perhaps, the fitting next question is: is there any hope on Zimbabwe?

This question solicits different answers depending on who is responding. 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 present.

Zimbabwe shares its geological endowments with its neighbours like Coal with Botswana and Mozambique, Platinum with South Africa, Diamonds and Gold among many other mineral endowments.

Assuming everything constant, if Zimbabwe fully explores only one mineral -platinum and purifies it in Zimbabwe and sell finished products, her economy can easily hit the $1 trillion mark. Yes, $1trillion US dollars!

The leadership that Zimbabwe needs is to change from politics of isolation into that of engagement. Hospitality is not a limited function of tourism only, but international relations.

The noise, both ideological and political that Zimbabwe makes is an antithesis of its economic development endeavours.

The risks of remaining behind the region in terms of development are too many, including, at some stage becoming the regions mafia-market. The corruption and politicisation of business that the leadership along Samora Machel Avenue in Harare tolerates is Zimbabwe’s enemy number one.

The very basic values of care, respect, tolerance, honesty, fairness are the very same magnets of investment.

Growth and happiness is possible- 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. 

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.

That country has no serious economic development plan like Angola or Mozambique have.

Like Zambia, the people- as workers, investors and consumers have to have free space to participate in the economy.

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 is sorry especially to vulnerable populations. Continued economic collapse may, soon, bring demise to the current political edifice. 

Time will tell!