Zim’s demagoguery a lullaby to a dying economy
THE decline in the rate of inflation from 1 193,5% to 1 184,6% has been greeted with ecstatic relief by the government which immediately attributed the slowdown to the efficacy of the Natio
nal Economic Development Priority Programme.
For a government with very little success to demonstrate to a largely despondent populace, the new inflation figure will be feted as a masterstroke and an act of genius. We wait for the spin from central bank governor Gideon Gono when he presents his Mid-Term Monetary Policy Review statement later this month.
But amid the din of celebration, our rulers continue to miss the bigger picture that our inflation is still the highest in the world. Those entrusted with leading the war on inflation have seen all their targets missed by the rampant scourge. The rate of inflation has in the past advanced by margins of over 30 percentage points. A small retreat of nine percentage points therefore is no cause for celebration. It could merely be a mathematical aberration as there is no respite for consumers of basic commodities and pensioners who today do not have anything to show for decades of gainful employment before retirement.
While the economic situation continues to deteriorate, government spin doctors are quick to tell us this is a passing phase. We are told that Zimbabwe still has some of the best infrastructure on the continent, that the country is endowed with immense natural resources and a well-educated and skilled labour force. But this is a lullaby to a dying soul.
As we focus on our troubles and tribulations at home, another sad scenario has been the unravelling on Zimbabwe’s status in the region.
Economist John Robertson in a presentation at the Zimbabwe National Chamber of Commerce congress in Victoria Falls earlier this month illustrated the declining influence of Zimbabwe in the Sadc region where it was until 2002 the second largest economy after South Africa.
It is now ranked 10th, only larger than the economies of Malawi, Lesotho and Swaziland.
Zimbabwe’s share of the regional GDP has slumped from 3,6% in 1996 to 1,4% today. Robertson says our economy is headed in the wrong direction when compared to the trend in the region.
He said between 1995 and 2000 — before the Zimbabwe crisis — the Sadc region (excluding South Africa) grew at less than 4% a year.
Since 2000 the regional economy has grown by over 11%. In comparative terms, our economic indicators have been heading south fast with 40% of GDP lost in eight years as a direct result of a massive decline in agriculture. Zimbabwe is also losing its market share in all industrial sectors — mostly, of course, to South Africa. It has lost ground in tobacco production and horticulture to Zambia, Malawi and Mozambique.
The manufacturing sector has lost its share mostly to South Africa and Botswana. Tourists are now opting to go to Zambia to see the Victoria Falls while those looking for big game are choosing Botswana.
KM Financial Solutions, in a manufacturing sector survey commissioned by the Confederation of Zimbabwe Industries last year, said the country’s manufactured products were losing competitiveness in the much bigger world out there as exports were now confined to the region.
These are grim statistics which will not be addressed by piecemeal measures like the NEDPP or appeals to regional fraternal bonds.
Zimbabwe is fast losing its hold on the pedestal of relevance and influence in the region. As Robertson pointed out, regional economies are not floundering in the mess that has been created by the Zanu PF government. They are actually cashing in on our misery.
They have seen an “opportunity for vultures to pick the bones”, he said. More than half of our skilled workers have left the country and are driving economic growth in the region. Our road network is transporting goods from South Africa to Malawi, Zambia and the Democratic Republic of Congo. South African companies are cherry-picking bargains among local companies writhing in intensive care and we call it investment. It’s not.
It is the mad rush of vultures to carrion. Even politically, we are headed the same way. South Africa and Namibia in their efforts to woo investors only need to reassure them they will not behave like Zimbabwe when implementing land policies in their respective countries. Hence recent strong statements from Pretoria and Windhoek saying they will not be following Zimbabwe’s example.
Yet our leaders still attend international conferences and engage in old-style demagoguery when given a platform.
Watch this space: the Sadc Summit in Maseru beckons.