Zimbabwe this week celebrated 36 years of independence, but for many Zimbabweans there is little to celebrate.
The Ritesh Anand Column
Racial oppression has been replaced by economic oppression as many Zimbabweans struggle to survive. Hope and promise has been replaced with fear and hopelessness.
A country that showed tremendous promise post-Independence has been led to despair. In the first two decades after Independence in 1980, Zimbabwe made tremendous and unexpected progress in many sectors and was considered to be the jewel and bread basket of Africa. Zimbabwe’s GDP grew by 4% per annum between 1980 and 1997, almost twice the rate of growth for Sub-Saharan Africa.
Zimbabwe boasted single digit inflation, a trade surplus and a stable currency. A thriving agricultural sector, stable banking sector and a dynamic and growing manufacturing sector. All this was about to change in 2000 following the implementation of the fast-track land reform programme.
Britain, frustratingly for the Zimbabwean government and its populace, had reneged on her pledge to compensate white farmers as part of the Lancaster House Agreement. Zimbabweans were “hungry” for land and little had happened for 20 years since the end of the war for liberation.
The “willing buyer willing seller” arrangement was moving at a snail’s pace, if at all. Growing discontent from the landless masses and from those who had fought for freedom, Britain had left President Robert Mugabe with little choice but to embark on the fast-track land reform programme.
Over the next decade, Zimbabwe would sink into an economic crisis. The currency was the first to go as people and capital began to flee the country. Inflation jumped higher and agricultural output declined. Agriculture was the mainstay of the economy accounting for over 25% of GDP. It was the backbone of the economy and supported many other industries including financial services and manufacturing. Over the next decade GDP declined by over 50% in what has been coined “the lost decade”.
A once thriving economy was gradually being torn apart, with it the dreams and hopes of so many Zimbabweans. Over three million people left the country in search of greener pastures. By 2008, inflation had reached 128 billion percent or 98% per day, the second highest rate in the history of the world. Only Hungary in the 1940s recorded a higher rate of inflation.
The economy was on the verge of collapse when Zimbabwe entered into the Government of National Unity in September 2008. Zimbabwe abandoned its own currency and adopted the multi-currency regime in February 2009. The stock market, which was shut in September 2008, was reopened and Zimbabwe was back in business.
Over the next three years, Zimbabwe’s economy recovered with GDP growth averaging over 8%. Was this a new beginning or another false dawn? Many Zimbabweans returned from the diaspora in search of opportunities. The multi-currency regime, combined with other factors, brought much-needed stability and allowed companies to plan their activities. The mining sector developed rapidly given the buoyant commodity market. Between 2009 and 2012, the mining sector grew by 35% per annum and by 2012 its share of GDP had grown to over 15%.
Growth started slowing down in 2013, in part due to political and regulatory uncertainty and an unfriendly investment climate. As the economy stalled, the high cost of borrowing was no longer sustainable and non-performing loans started to increase once again. In the absence of any new money how was the economy expected to grow again?
What are the key impediments to growth? How do we kick start the economy again? Where are the bottlenecks and how do we unlock the gridlock in the system? How do we become attractive again?
In an increasingly globalised world, we compete for capital. How is it that we receive less than US$400 million in foreign direct investment while our neighbours Zambia and Mozambique receive over US$2 billion and US$5 billion respectively? What policies do we need to adopt to make Zimbabwe attractive again?
The solutions are simple, but require focus and discipline. We need to deal decisively with corruption and become productive again. We need to adopt more investor-friendly policies and make investors feel welcome. We need to deal with our outstanding debt and reduce our bloated civil service. We need to reduce our trade deficit by becoming productive again.
As Zimbabwe celebrates 36 years of Independence, we have to ask ourselves one very simple question: have we made social and economic progress over the last three decades? While we have redistributed land, have we become more productive? What do we need to do to truly empower our people? Is this what our freedom fighters fought for? Is this the Zimbabwe we dream of and want our children to grow up in?
While I do expect growth to suffer in the short-term as Zimbabwe goes through the painful process of deleveraging and cost-cutting, we are laying the foundation for a better future. I do believe that future generations will benefit from the sacrifices made by the current generation. Zimbabwe will be great again, but it needs bold and decisive action. Some have suggested a “Third Way”; perhaps the solution for a better Zimbabwe will come from the outside.
The world is becoming more complex and competitive. If we are to compete on the world stage then we need to raise our game. You could say so far so good, but we could be a lot better. Zimbabwe has shown great resilience over the last two decades, but it is time to thrive. It is time we build a better brighter and more dynamic Zimbabwe.
Happy Independence Zimbabwe. So far so good, but it could be a lot better!