Prioritise productivity for economic sustainability

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Productivity is an inherent challenge facing Zimbabwe’s economic recovery, development and competitiveness. The extent of national economic productivity is a differentiating characteristic categorising countries between developed, developing and less-developed.

Productivity in economics is measured by production per person, which further defines the extent to which an economy is capable of participating in global trade and sustainable economic wealth creation.

Concepts of economics defines less-developed countries as those with low production per person (Tucker, 2008).

Based on this, how can the economic realities in Zimbabwe define its productivity given the continued demise of companies, production capacity and erratic electricity supply in the midst of a prevailing speculative economic model.

In speculative economic models, productivity is not a priority. You only need to possess an economic instrument which is scarce and then focus on exploiting those who need it.

This article builds upon my previous one titled: Zimbabwe must build a sustainable economic model by continuously pointing out critical economic fundamentals that need to be addressed in the quest for the sustainable economic recovery of Zimbabwe. The article further discusses economic productivity as a fundamental inherent characteristic facing the paradigm shift in Zimbabwe.

The concept of economic productivity rests upon what Blanchard (2019) defined from a business perspective as the amount and quality of work accomplished in relation to the team’s purpose and goals. However, productivity depends on the team members’ ability to collaborate, their knowledge and skills, clear goals, and access to needed resources (Blanchard, 2019).

The broader economic philosophy measures economic productivity as the market value of all final goods and services produced in a nation in a given period of time (Tucker, 2008).

This as a performance measurement defines the gross domestic product (GDP) and excludes foreign production by local businesses (Tucker, 2008). However, productivity per person is then measured by gross domestic product per capita (GDP per Capita), which also defines the standard of living by citizens.

Looking at both perspectives, a question that comes to mind is how realistic is the productivity of Zimbabwe given the existing speculative economic model. Observations have shown that developed countries tend to be characterised by high productivity per person while less developed countries are on the contrary.

Productivity by nationals is a critical function for economic sustainability in any country. Whereas economic sustainability could be referred as the ability of an economy to support a defined level of economic production indefinitely (Thwink, 2019).

Contemporary economists have opted to define economic sustainability as a steady economic growth in total GDP of a minimum of about 2% per year (Thwink, 2019). However, such economic growth has to be supported by a sustainable economic model which may not be the case for countries like Zimbabwe.

Economic sustainability cases can be cited of countries like Singapore, South Korea, China, Malaysia, Australia, Hong Kong, Luxembourg, Germany and Norway to name a few. In Africa, potential emerging sustainable economies may include Mauritius and Rwanda.

However, economic sustainability is underpinned by high productivity per person and social being. According to Blanchard (2019), productivity and morale determines the extent to which goals can be achieved. It is a reality that the current atmosphere in Zimbabwe cannot inspire productivity and real economic recovery.

The context in Zimbabwe has been shifting over the past decades, with the rising demise of the means of production in agriculture and manufacturing. Further, poor economic governance and mismanagement driven by political thinking in economic governance has been an ingredient for economic collapse contributing to the demoralisation of many people in Zimbabwe.

The economic context has also seen speculators getting rich, while productive workers getting poor. Harare Central Business District (CBD) tends to be filled with high human volume movement during productive hours of the day, yet many are involved in economic activities which provide non-measurable products and services, whose originality cannot be attributed to Zimbabwe. Most people seen in the CBD are involved in trading second hand goods, imported products or exchanging foreign currency. In some cases, it provides a challenge in determining whether these activities can be regarded as employment or just subsistence for life survival.

The emerging trend of erratic electricity supply in Zimbabwe creates the biggest threat to productivity. Many companies and individuals are now spending hours just seated waiting for electricity to come.

In most cases, electricity switches on during the night when everyone would have already been frustrated and given up for the day. Since the electricity load-shedding triggered by the Zimbabwe Electricity Supply Authority in the past months, productivity per person has been greatly lost by many people, giving an indication of lost global trade capacity and competitiveness of Zimbabwe’s economy.

Lost productivity from erratic electricity has far reaching consequences for Zimbabwe insofar as it is becoming a normal way of life and an acceptable practice.

Companies are losing production time, leading to revenue losses. Loss of revenue means loss of tax revenues for the Zimbabwe Revenue Authority. Loss of taxes means loss of government revenue to pay civil servants reasonable salaries, infrastructure development projects and economic development.

The far reaching implications for government becomes raising funding gaps from lost productivity through borrowing and raising taxes. Observations have also shown that highly-indebted countries in Africa tend to be associated with low productivity per person and high tax rates.

Cases can be cited of countries like Zambia, Malawi, Zimbabwe and Mozambique, despite being highly rich in natural resources. In addition, low productivity countries are becoming heavily reliant on donor funding. From the above context, it is crucial that Zimbabwe prioritises productivity as a national culture. In countries like China, productivity is an order of the day and a factor for job security. While the culture of productivity has long been lost among many Zimbabweans, it will be hard to regain, given what has been witnessed in the past decade, where some individuals have overnight end up being rich without any labouring or production.

Today, many graduates have been caught in that same euphoria of quick-rich without labouring. For anyone who has lived in developed countries like the United States or Europe, knows they have very strong work culture, where your job security is determined by productivity and results.

In some companies in the UK, they have systems that can determine your speed of completing a task. While many such systems in Zimbabwe and Africa are non-existent, it defines why many countries are considered less-developed countries because of their low productivity per person.

Economic productivity requires planning, setting goals, targets and leadership inspiration. The rise of the Asian tigers like Hong Kong, Taiwan, Singapore, Malaysia, China and India onto the global economic sphere was largely attributed to a strong working culture of productivity.

In some of the cases, command economic management systems had to be instituted, even through positive economic dictatorship (Tucker, 2008). In Africa, cases can be cited of Rwanda, whose economic productivity was driven by its former military leader, Paul Kagame. The productivity culture in Rwanda has paid off, setting a course which Tanzania is following under President John Magufuli.

The reality is that economic productivity can be leadership-inspired for economic sustainability. It cannot the ignored that the development in Rwanda was driven by a strong leadership which genuinely eliminated anti-productivity practices such as corruption, rewarding of none productivity through labour laws, excessive labour rights with no responsibility for results, and allowing unexplained wealth creation.

Finally, the sustainable economic recovery of Zimbabwe cannot be achieved without prioritising and driving a national productivity culture. Productivity is determined by tangible final goods and services achieved from knowledge, skills, collaboration, shared value and inspirations.

Today, many youths in Zimbabwe are spending productive time on social media and none productive activities which cannot be traced to any form of economic value created.

However, judging by recent announcement in Parliament that Zimbabwe has a skills base of around 34,7%, it can be evident why productivity rate in Zimbabwe may be low. Productivity culture and skills go hand in hand, hence being a determinant for attracting foreign direct investment necessary for industrialisation.

Rodney Ndamba is an academic and founder of the Institute for Sustainability Africa), an independent think tank and research institute. These weekly New Perspectives articles are coordinated by Lovemore Kadenge, immediate past-president of the Zimbabwe Economics Society — kadenge.zes@gmail.com and mobile: +263 772 382 852.

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