How Did The Zimbabwean Economy Collapse?

January 13, 2024
8 mins read

By Rumbidzai Dube |With thanks to Blacklooks
Monday, September 26, 2011.
I have been asking myself why it is that people never want to take responsibility for their own actions especially when the consequences of their actions are negative. Why is it so much easier to find scapegoats and shift the blame on others what is called chipomerwa in Shona, my mother tongue than to face the truth and find ways of dealing with the problem? Why then is it that people expect problems to disappear yet they have not addressed the part of the problem to which they are the problem? These are questions I have been asking myself every time I think of the economic meltdown that Zimbabwe has undergone and the consequences that the meltdown has had on the lives of ordinary Zimbabweans, especially women and children.
In 2008; the worst year ever in Zimbabwean economic history since its independence in 1980, the lives of many people were transformed for the worst. The nation was plunged into poverty and the burden of poverty wore heavily on women as the mothers and in some cases sole breadwinners for their families. The food that most people grew up taking for granted was no longer so easily accessible and the content of the basket which was once considered basic consisting of bread, milk, tea-leaves, sugar, margarine, mealie-meal, meat, vegetables, cooking oil, washing and bathing soap and Vaseline became a privilege. Families were forced to eat a single meal each day and the meal would consist of food rich in starch to stave off starvation. Such an unbalanced diet led to increased reports of malnutrition.
Women with school going children struggled to pay school fees. Some failed to pay the fees forcing the children to drop out of school. In some cases where they could afford the fees, school uniforms were unaffordable so the children were sent to school with no uniforms. At a time when food was hard to get by, healthcare was not a priority, no wonder there was an increase in maternal and infant mortality. Access to proper medical care and medication became the preserve of the affluent.
In their resilience, women channelled their energy to the informal market and a spring of misikas (vegetable market stalls) and flea markets ironically manned by women became a growing phenomenon as women tried to make ends meet. Some started going to neighboring states to bring any goods that could be sold and the phenomenon of cross-border trading became a house-name in Zimbabwe.
When social justice movements and watchdogs of democracy spoke their minds against this deterioration in the lifestyle of Zimbabweans, they were thrown into prison cells. The stories of the arrest, detention and harassment of members of the Women of Zimbabwe Arise (WOZA) and Zimbabwe Congress of Trade Unions (ZCTU) among others hit the headlines.
But, it is also at that time that the black-market flourished as mainly young men engaged in shady deals madhiri. The field of gold panning chikorokoza and diamond dealing zvengoda made many people rich. But, these fields were the preserve of men as very few women were daring enough to engage in such cutthroat business. So yes, women in Zimbabwe bore the brunt of an economic era that was unregulated and chaotic.
The question remains how did the Zimbabwean economy collapse? The responses to this question will always vary depending on whom it is addressed to. The general public will say it is because of the corruption by political leaders. Economists and other political analysts will say it is because of the disastrous economic policies and politics that the ZANU-PF government implemented. The ZANU –PF loyalists and party members will say it is because of the sanctions imposed by the West (Europe, Australia and North America) which some of our own (meaning the MDC) supported. The West will say it was the mismanagement of the economy by ZANU-PF especially a disorderly land reform process that destroyed an agro-based economy. Viewed separately each response has a ring of truth. But these responses also reflect certain levels of bias and a failure by each group to appreciate and acknowledge its own role and contribution to the demise of the economy.
Disastrous economic policies
Zimbabwe’s involvement in the Coltan War in the Democratic Republic of Congo (DRC) between 1998 and 2003 significantly impacted the economy. The military initiative emptied the public coffers. Zimbabwe’s contribution was estimated at 11 000 in human resources and an unaccounted number of war-equipment. Most people viewed the war as unnecessary since the country was not under any strategic threat given Zimbabwe’s geographical positioning from the DRC. A report by the then Finance Minister of Finance Simba Makoni in his briefing to Parliament in August 2000 revealed that government expenditure directed towards the war was over USD $200 million. The reasons for that controversial intervention, the depth of losses incurred and the impact it had on the economy have never been fully accounted for and hence the real details remain mere speculation.
The disorderly and sporadic land reform process which began in 2000 not only failed to redistribute land equitably, but also removed land from the hands of the white population and placed it in the hands of a few elites. Most of the beneficiaries neither have farming skills nor do they have the business sense of approaching farming at a large scale. Under-utilisation of the land and reduced production destroyed the basis of an economy which was agriculturally based and hence shoved the economy many steps into the dungeons. Zimbabwe used to grow enough food to feed its own people and feed the region as well but now thousands go hungry and each year. The World Food Programme and other relief agencies have had to intervene to feed Zimbabweans.
It is also true that the widespread mismanagement of funds and excessive spending on luxury vehicles contributed in increasing government expenditure. This milked the government’s revenue and widened the debt deficit the country owed to international monetary institutions. The response of the Reserve Bank, between December 2008 and 2010, to limited foreign currency flows into the formal market with constant devaluation of the Zimbabwean dollar and the printing of higher denomination value bank notes backed by nothing fuelled inflation and completely rubbished our currency. It also promoted speculative tendencies which drove trade in foreign currency to the black market where rates were more lucrative than the formal channels. This caused even greater reduction to the foreign currency flows in the formal market and the result was hyperinflation.
The corruption that surrounds the mining of diamonds, platinum and other precious minerals has seen the country incurring losses with a few beneficiaries amassing wealth from the country’s resources. The politics of violence and intimidation that the country has experienced since 2000 has also led to its designation as an ‘unsafe tourist destination’ hence reducing the amount of revenue flowing into the coffers through tourism. Hence it cannot be disputed that the ZANU-PF led government played a major role in taking the Zimbabwean economy to the doldrums.
SanctionsThe role that Western powers have played to the death of the Zimbabwean economy cannot be dismissed as insignificant. The sanctions imposed by the United States under the banner of the Zimbabwe Democracy and Economic Recovery Act of 2001 (ZIDERA) contributed to the economic woes. This Act significantly reduced Zimbabwe’s access to finance and credit facilities. With limited access to foreign currency, inability to apply for debt cancellations, coupled with the global financial crisis, Zimbabwe’s chances of surviving in such harsh conditions were next to nil. This catalysed fuel shortages witnessed acutely in 2008 which in turn catalysed price increases of all basic commodities and significantly made the cost of living higher.
The EU targeted sanctions which imposed an asset freeze on a few prominent leaders not only failed to serve their intended purpose which was to address the violation of human rights in Zimbabwe but they also fuelled corruption. With their lifestyles demanding huge cash-flows, individuals with political influence whose assets were frozen, simply used their influence to siphon state resources to make up for the financial gap created in the absence of their frozen fat bank balances.
Absence of the rule of lawThere is nothing wrong with citizens expecting state institutions to enforce the rule of law. Under normal circumstances it is the responsibility of the state to ensure that there is rule of law. However in the absence of effective state institutions and in the absence of sanctions then the resultant end is anarchy. But who is the anarchist? It is the citizens. It is you (who is reading this article) and I. When citizens obey the law because they fear sanctions and act against the same law when the sanction goes away or if there is no one to enforce it, I believe it is their fault if their actions have negative consequences on themselves.
My point is to ask, how many Zimbabweans will stand and say they never traded foreign currency on the black market because there was no regulation to stop them? How many did not sell whatever they had and which they knew to be on demand at exorbitant prices ignoring the 40% mark-up needed to make a decent profit? How many people pay their domestic workers meagre wages because the Labour court never came knocking on their door? How many Zimbabweans are involved in informal trade yet they have not given a dime to the government in tax returns because the Zimbabwe Revenue Authority has not caught them out? How much revenue was lost through tax evasion by Zimbabwean citizens?
Many argued and will argue of course that paying tax under the previous regime was tantamount to feeding a corrupt government, but how many still evade paying tax with the new inclusive government in place and despite its clear appeal for revenue to get the economy back on track. The private sector has taken to mimicking the exploitative nature of the government, paying employees peanuts despite making mega profits and forcing thousands of skilled labour out of the country in search of greener pastures. So who should be blamed? For the shrinking pool of skilled labour? For the corruption that has become endemic? For the government‟s bankruptcy? For the demise of the Zimbabwean economy?The realityThe response I will never get from all the different groups would be; “The Zimbabwean economy collapsed because we all contributed in some way to its demise.” The ‘we’ implies an assumption of responsibility and acknowledgement that everyone is part of the problem. It is not a mere shelving of responsibility on other parties’ shoulders and it is a reflection of honesty. Honesty that speaks of commendable levels of self-introspection and a wish to change the fate of this beautiful country I call home.
Indeed the government, the Western powers, the politicians and we the people of Zimbabwe have all contributed to our economic woes and until we accept this reality and take concrete steps to solve the part of the problem in which we are the problem then Zimbabwe’s economy shall never rise out of this pit. Zimbabwe is currently rated as the country with the largest diamond deposits in the world. It has gold, copper, coal, platinum, silver and vast amounts of mineral deposits. It has wide expanses of land for agriculture. One of the Seven Wonders of the World, the Victoria Falls, is in Zimbabwe and the country could be bringing in revenue through tourism. Yet this same country ranked 172 out of 191 states on the Human Poverty Index in 2010, 159th on the Ease of Doing Business Index and is one of the lowest ranked countries on the General Inequality Index (GINI).
People are starving surrounded by arable land and flowing rivers. Scores are unemployed and the government is broke!! This suffering that Zimbabweans are going through could have been avoided and can still be overcome. Accountability for a few hundred diamonds could change so many things. Strategic and well thought out redistribution of land could also make food available on people’s tables. Black empowerment strategies that are reasoned and conscientious of the global market paradigm in which we live would also ensure employment and production of good quality, affordable goods for Zimbabwean people.
Initiatives that seek to empower grassroots economically targeting women who have proved to be the breadwinners and providers of families in trying times would ease the poverty. The politicians may jump in like bull frogs into hot water, dragging whole nations along and when a whole nation’s legs are burnt then they want to drag it in yet another wrong direction, but the ‘people’ do not have to let them continue doing so. The end to corruption starts with the individual, choosing to be a whistleblower. Choosing not to be corrupt is choosing a transparent nation and possibly a stable economy.
Rumbidzai Dube is a writer and researcher. She is currently an intern with the Cairo Institute for Human Rights Studies.

  Send to a friend  |

View/Hide Comments (0)   |


Leave a Reply

Your email address will not be published.

Previous Story

Libya, Madunagu and False Imperialism

Next Story

Yes Mr President, Democracy is African too!

Latest from Blog

A virgin’s quest

A Short Story by Bunmi Fatoye-Matory Wednesday, May 22, 2024.   Somewhere in Rọ́lákẹ́’s childhood, she learned about Mercedes Benz, but not