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Provincial developmental agenda crucial

The Brett Chulu Column

THE provincial production data released by government recently provides insights that should help us refine our National Development Strategy agenda. The data released by government is divided into two parameters, gross domestic and per capita (per person) product.

GDP is the value of new products made and exchanged (bought and sold) during a specific period of time in a specific geographical area. In terms of provincial GDPs, it means a provincial GDP as per the post-cabinet briefing data, is the total value of products made in the province and then bought and sold within both in Zimbabwe and out of Zimbabwe. That would be the logical economic definition of provincial GDP. Per capita GDP is simply the GDP divided by the population of the area in which the GDP is generated within a particular time period. Provincial per capita GDP should be taken to mean the GDP generated in a province divided by the population of the province in a particular year.

Based on the data (for 2018) recently released by government, the GDP performance of each province, in order of size from the biggest to the smallest is as follows:

Harare , US$9,56 billion

Bulawayo, US$2,26 billion

Mashonaland East, US$2,22 billion

Mashonaland West, US$2,14 billion

Midlands, US$1,94 billion

Manicaland, US$1,46 billion

Masvingo, US$1,41 billion

Matabeleland North, US$1,16 billion

Mashonaland Central, US$1,08 billion

Matabeleland South, US$0,94 billion

On a per capita (per person) GDP basis, from the highest per capita GDP to the least, the performance turns out as follows:

Harare, US$3 614

Bulawayo, US$3 048

Mashonaland East, US$1 408

Matabeleland North, US$ 1 333

Mashonaland West, US$1 206

Matabeleland South, US$1 186

Midlands, US$1 026

Masvingo, US$820

Mashonaland Central, US$784

Manicaland, US$743

There are a number of salient issues embedded in the provincial economic production data.

Assuming the provincial GDP data originating from Zimstat is accurate, the disparity in terms of economic production between Harare metropolitan and Bulawayo metropolitan is astounding. Harare metropolitan produces 4,23 times what Bulawayo metropolitan produces. It can be strongly argued that years of de-industrialisation of Bulawayo, with firms relocating to Harare, others moth-balling while others completely shutting down is what has cumulatively led to Harare’s economy growing more than quadrupling Bulawayo’s.

Two broad processes drove Bulawayo’s de-industrialisation. The first process was the take-all administrative structure that incentivised the capital as a strategic location and the excuse that water problems in Bulawayo were a risk to be compensated for by relocating to the capital. The second process is the destruction of agro-based value chains and the disintegration of the agglomerations that had accreted around agro-value chains.

Land reform had a significant impact in diminishing primary agricultural production in the provinces supplying raw material for value-addition in Bulawayo. The agro-value chain around beef production is a case in point. Loss of beef production in Matabeleland South directly impacted the Cold Storage Commission’s ability to value-add. Sanctions linked to the land reform also meant the CSC lost the beef export quota to the European Union.

Supporting industries such as the mighty mechanical engineering Bulawayo cluster and the National Railways of Zimbabwe were strangled as a result of the disintegration of the beef value chain. It does not make sense for Mashonaland East’s economy to be practically the size of Bulawayo — it strongly underlines the severity of the de-industrialisation Bulawayo has experienced systemically.

Per capita GDP results present serious ironies that intuitively do not make sense. The data would have us believe Manicaland is the poorest province in Zimbabwe. The same data would also have us believe that Bulawayo and Harare are almost equally prosperous, with Harare being slightly more affluent.

The same data would have us believe that Matabeleland South is the 6th most prosperous province despite being the smallest provincial economy, producing under US$1 billion of economic output.

We have to reconcile these counterintuitive results. Despite Bulawayo’s industrial incessant haemorrhaging, it seems to be as much prosperous as Harare. We have to look into the population dynamics. The population statistics have been disputed by a number of critics — with the accusation that Bulawayo’s population is under-counted.

If this claim were true, then Bulawayo’s per capita GDP is exaggerated, meaning the province is not that prosperous but relatively poorer. The other school of thought argues that the systematic de-industrialisation of Bulawayo has led to emigration of economically active people from the province to the Diaspora and to the capital city, leaving a dwindled population responsible for the high per capita GDP.

To many people I shared the provincial per capita GDP data ranking, the implied conclusion embedded in the ranking that Matabeleland provinces are not the poorest was counterintuitive. It led them to question the credibility of the data. It does not make sense for many to accept that Manicaland is the poorest province and that Matabeleland South is significantly wealthier than Manicaland, Midlands, Masvingo and Mashonaland Central. It causes cognitive dissonance for some to reconcile with the thought that a province such as Manicaland with diamond production, fruit production, tea estates, timber, tourism and dairy production can lag behind Matabeleland South, prosperity wise, with mining and a diminished beef industry and a relatively small horticultural sector centred around Beitbridge’s citrus plantations. These are legitimate reactions of scepticism.

We need to understand the limitations of per capita GDP as a measure of relative wealth. GDP aggregates monetary value of formally produced goods and services — it does not measure the quality of the output in terms of its impact on the life of the people.

The argument that our economy is highly informalised and therefore does not capture the entire gamut of production that is exchanged outside the informal sector can be dealt with by looking at quality of life measures. Many point out Tsholotsho as an aberration due to its general symbols of relative prosperity such as well-built rural residences with modern conveniences.

This reflects the impact Gross National Income which accounts for diaspora flows. There is a case for provincial GNIs at a theoretical level. Practically, it is next to impossible to measure provincial G NIs as such foreign inflows come through informal means. This challenge buttresses that our analysis of prosperity should embrace as many dimensions as possible.

As famously put by the African Development Bank chief Akinwumi Adesina that people do not eat GDP, we need to tie our per capita GDP and per capita Gross National Income metrics to quality of life improvements — this is the true test of prosperity.

This will also remove doubts in the minds of many people who think the provincial economic output and productivity data is not credible — it is because people see a disconnect between the quality of life they experience on a day to day basis and the technical economic data. If people cannot see improvements in their day to day life, metrics such as GDP growth or which province has the biggest economy or is more productive than the other are meaningless.

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

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