Fiscal indiscipline won it for Zanu PF

IT has come to pass — the ruling party has retained power after winning a parliamentary majority. There is a salacious irony to that electoral victory — fiscal indiscipline seems to have buoyed the ruling party.

The Brett Chulu Column

A dispassionate analysis of the geographical voting distribution points to a strong causal link between Zanu PF-led government’s fiscal indiscipline and its shocking electoral victory.

Enter the 2017 Inter-Censal Demographic Survey (ICDS) report released by Zimstat, Zimbabwe’s official statistical agency. An inter-censal survey in Zimbabwe is carried out five years after the decennial population and housing census.

The ICDS report supplies the statistical pillars needed to piece together the main thesis of this article. The first statistical pillar concerns the latest demographic variations in Zimbabwe as estimated by Zimstat in November last year. So the demographic numbers employed in this analysis are quite fresh.

Let us granulate the demographic statistics.

The ICDS puts the estimated rural population at 9 289 835. In terms of the estimated population, the ICDS states that: “The estimated number of people living in private households is 13 572 560.”

This gives us the estimated proportion of people living in rural areas at 68,4%. The ICDS confirms this: “The population in this country is mostly rural with 68% of the total found in rural areas with the majority in the communal and resettlement areas.”

As revealed by the ICDS, the rate of urbanisation in each of our 10 administrative province is startling. The highest rate of ruralisation is in Matabeleland North, standing at 94,6%, giving a 5,4% urbanisation rate. It is closely followed by Mashonaland Central with a ruralisation rate of 92,2%, implying an urbanisation rate of 7,8%. Masvingo is next, with a 90,6% rural population, leaving us with an urbanisation rate of 9,4%.

Mashonaland East has an urbanisation rate of 11,2%, denoting a 88,8% rural population. Manicaland is 84,6% rural and 15,4% urbanised. Matabeleland South is 86,5% rural and 13,5% urbanised. Mashonaland West is 79% rural and 21% urbanised. Among the non-metropolitan provinces, the Midlands is the most urbanised, at 31,9%, indicating a 68,1% rural population. Harare province is 95,4% urbanised and 4,6% rural. Bulawayo is 100% urbanised.

A correlation between the distribution of the parliamentary seats won by the ruling party and those won by the opposition pitted against rate of urbanisation is very high and significant, with an R-squared value above 90%. The ruling party dominated in rural constituencies while the opposition conquered in urban areas. It would be intellectual naivety to propose that the ruling party won in rural areas because most people live in rural areas and that the opposition swept the urban vote because it is strong in urban areas. It is a well-known maxim of inferential statistics that correlation is not causality. We need to propose a causal mechanism that penetrates beyond the rural-urban divide. In service to that purpose, another statistical pillar from the ICDS reports adds one more layer to the argument.

The distribution of the active labour force points us closer to the causal mechanism. According to the ICDS report, the active population, defined as those 15 years and above, is 8 072 178, with 60% or 4 843 307 people categorised as being economically active. Peeling this further, the ICDS report reveals that 52% of the economically active are own-account workers in agriculture. Further granulation shows that 63% of economically active females are own-account agricultural workers. The majority of the 68% of Zimbabweans live in communal areas (47,5%) and in resettlement areas (15,9%). The economics of rural area, clearly, are dominated by agricultural matters since this is the major source of livelihood. We can now complete the picture.

The ruling party cast its electoral strategy around agricultural issues targeted at the rural populace, with a potential 68% voting block. A broke government that the international financial community has isolated since the violent land seizures that were ramped up in 2000 had to devise a method to finance its agricultural initiatives. It had no choice but to deliver on the biggest economic concerns of the massive rural electoral sea. The creation of huge fiscal deficits became an unofficial policy of the ruling party-led government since the demise of the Government of National Unity (GNU).

There was a method to that fiscal madness. Following the budget-surplus GNU era, an epoch of budget deficits dawned.
In every single year of the post-GNU, the budget deficit tested new limits with 2016 and 2017 recording the obscene budget deficit levels of 10% of GDP and 16% of GDP respectively.

In absolute terms the last two years recorded budget deficits of US$1,421 billion and US$2,52 billion respectively. To fund these huge fiscal deficits, government resorted to issuing Treasury Bills and breaching its borrowing limit (20% of previous year’s revenue) from the Reserve Bank of Zimbabwe. Local banks obliged gladly by running their electronic presses, pouring pseudo-dollars into the country’s financial system.

That caused the value of pseudo-dollars to depreciate massively with heavy discounts levied on them. The pseudo-dollars chased good money. Bad money chases good money. The result was that cash shortages worsened in 2016 and the situation has not improved two years on.

The conundrum the ruling party-led government faced was either to solve the cash crisis (a crisis it seems to have strategically created) and appease the measly 32% urban population or risk incensing the 68% rural populace. It can be inferred that a tough decision was taken to sacrifice the urban populace.

The whole campaign around jobs, mega-deals by the ruling party was an attempt to soften the riled urban populace that was swimming against the tide of economic currents in the form of cash shortages and joblessness. The urban population completely rejected the “economy first” and “open for business” mantras. They simply did not trust the cleverly coined phrases which promised to solve economic challenges after elections, especially with the post-Robert Mugabe regime having had eight months to turn around the economy.

In the rural areas, the post-Mugabe regime did not make empty promises; it delivered on its agricultural assistance promises in the form command schemes for crops and livestock. These command schemes came largely on the back of fiscal profligacy.

It is a fact that this year tobacco productivity at almost 2 200kg per hectare has exceeded the recovery of tobacco yields experienced during the GNU era. The input support schemes for the tens of thousands of the new entrants from communal and resettlement areas have contributed towards the improved the yields. All this, is courtesy of fiscal deficits.

It is a benumbing irony that the ruling party won the election on the tailwind of fiscal profligacy, with the government putting a wager to deliver the rural vote. They went for the 68% population with tangible assistance to the agro-based rural populace. It seems to have worked in that in many rural areas where the opposition has been traditionally strong, the ruling party wrested the seats, especially in the livestock farming regions of the Matabeleland.

The ruling party did not start campaigning this year; each year, it chalked up a huge budget deficit, to the chagrin of many; the campaign was in full swing, courting the rural voter who dominated the urban voter by a factor 2,13:1.

Chulu is a management consultant and a classic grounded theory researcher who has published research in an academic peer-reviewed international journal. — brettchuluconsultant@gmail.com