Are we really independent?

As Zimbabwe celebrates more than three decades of self-rule under the theme, "Zimbabwe at 34: Defending Our Sovereignty and Providing an Enabling Environment for Sustainable Economic Empowerment and Social Transformation," the country's long record of a distressed economy and widening poverty gap remain a distant concern in the nationwide commemorations and provincial rallies fronted by marching bands and traditional dancers. Away from the cheering crowds, the nation's long history of economic crises and political instability which has shaped the life choices of ordinary Zimbabweans within and across the country's borders, serves as testimony that the attainment of economic liberation remains a troubled and at times elusive post-independence dream. Formal sector unemployment is very high, companies are closing down, the economy is teetering on the brink, we don’t have a national currency and corruption is running riot in high offices. That is the state of Zimbabwe on Independence Day.

Are we independent? From what? To do what? What is there to celebrate on Independence Day? Thirty-four years on, are we in any way different from the rest of Africa or are we the worst of the lot? In short, is there hope for ordinary Zimbabweans? What mark would those who paid the ultimate price to liberate this country give us for what we have become? Plainly corruption and general mismanagement in Government-linked enterprises and local authorities have done a lot to discredit the image of our liberation war heroes. This is quite separate from deliberate distortions and misinformation about the motives for the land reform and economic empowerment programmes which seek to directly benefit the poor. Beyond the short-term, should we proudly say have tried to be different and more inclusive economically?

The general narrative about Africa is that the continent has regressed since the advent of independence. It is not unusual to hear some disillusioned Zimbabweans shouting that we were better off under Smith. GDP figures are always readily available to buttress these often misleading claims. Sadly, a majority of those who revel in this researched nostalgia have no clue of whose welfare is covered under those glowing GDP figures. They can’t explain why it would then have been necessary for someone with a university degree to opt to go to war than simply get a job, buy a house in the suburbs, buy a car and marry. All said, these protest messages reflect our current lived reality: the impatience to enjoy, the self-indulgence about what we don’t own or produce, the love for the transient, lack of appreciation for the spirit of sacrifice for the greater good and our search for the elusive glamour of Hollywood as gleaned through the flat screen.

It reflects the life of greedy and showy luxury we see around us, much of it unaccounted for. Yet it is arguable that as Africans we have generally been like apologetic about their independence, often treating it as if it were a gift, more an accident of history than a call of destiny. We have refused to make a clean break with colonialism, imperialism and its capitalist tentacles which make it nearly impossible for an independent African state to act as such: standards, norms and best practice are established for us, so that anything different is sinful deviance.

Future of the economy becomes more and more creepy now

Zimbabwe celebrates the 34th anniversary of its independence on Friday amid concern that the deteriorating economy is eroding the gains of independence. Zimbabwe gained independence from British in 1980 after a vicious war between the white Rhodesians and black freedom fighters. At independence, the country was the bellwether of economic promise and good governance but that faded at the turn of the millennium.  Vowing to end social inequality and racial oppression, Zimbabwe's first prime minister and current president, Robert Mugabe, proclaimed a new era in the nation's history, but the promises and hopes of independence are yet to translate into sustained economic growth. A costly military venture into war-torn Democratic Republic of the Congo - then named Zaire - and overdue compensation pay outs to war veterans marked the beginning of economic collapse in November 1997, when the Zimbabwe dollar lost more than 70 percent of its value.

At the turn of the millennium, a political crisis and a land reform programme that violently seized white-owned farms resulted in a significant reduction of agricultural productivity and mass withdrawal of foreign investment. Although farming yields eventually increased, the shattered economy and volatile political situation prompted many Zimbabweans to seek political refuge and a better life elsewhere. Zimbabweans have dispersed all across the continent, with a concentration residing in South Africa. Estimates of the number of Zimbabweans here range between 1.5 million and 3 million, but a large number are undocumented migrants who left in search of employment and a better standard of living. A condition partly caused by on-going liquidity problems in the banking sector, as well as donor and investor uncertainty over the credibility of 2013's presidential and general elections, the shrinking economy has resulted in economic deflation. Recent figures from the International Monetary Fund show inflation has declined from 2.9 percent in 2012 to -0.5 percent in February 2014.

While it's the first time Zimbabwe has experienced deflation since adopting the multiple currency system in 2009, when record sky-high inflation levels forced the government to abandon the Zimbabwe dollar in favour of currencies such as the US dollar and the South African rand, analysts have warned Zimbabwe could face more financial challenges if poor economic performance continues. Voicing those concerns is the former Minister of Finance and Secretary-General of the opposition MDC-T party, Tendai Biti. He blames the Mugabe government for poor management of the economy. "The current situation proves that the Zanu-PF regime cannot be trusted with management of the economy. We have now entered into a serious period of deflation and this could lead to the total collapse of industry and an increase in corruption and social suffering as people struggle for the few resources that are available," he told Al Jazeera.

Biti said that protracted deflation could lead to the return to the Zimbabwe dollar. "Faced with absence of economic growth and debt repayment problems, it might be likely that a return to the Zimbabwe dollar is inevitable." In its 2013-2015 Country Brief for Zimbabwe, the African Development Bank (AfDB) urged the government to improve administration and revenue collection from the country's mineral wealth - as this could potentially provide some debt relief for the state and, in turn, the general population.

Economy even worse than in 1980, 34 years after independence

Despite a rich and diverse resource base, many analysts say 34 years into independence, the economy is worse now than it was in 1980. The majority of Zimbabweans find themselves poor. By many estimates, Zimbabwe’s unemployment rate stands at more than 80-percent.  Many Zimbabweans fall into the category of the unrecorded informal sector, where they are selling goods and products, many obtained from across the borders of South Africa or Botswana. Japhet Moyo, secretary general of the Zimbabwe Congress of Trade Unions (ZCTU) says this is a reflection of the erosion of the good living many enjoyed in the early years of independence. Moyo added that the Zimbabwean worker is worse off than he or she was in 1976 during the colonial era. He says the absence of people working in the formal sector has taken a toll on his membership which has seen a drastic reduction in membership numbers.

With almost 98 percent of the population in the informal sector, Moyo says the government needs to do more support these people, instead of penalizing them. He says this in reference to such actions as Murambatsvina or Operation Remove Filth in 2005.  Meanwhile, Paddington Japajapa, president of the Zimbabwe Indigenous Economic Empowerment Group, says the government is largely to blame for the collapse of the economy due to years of corruption and bad policies. Japajapa says government must deal with corruption and revert to what has proven to work, such as its power-sharing agreement with the opposition between 2009 and 2013, which led to improved economic conditions in the country.

During that time, scarcity of food and fuel was alleviated, as well as cash-flow and hyperinflation, due to the adoption of the use of multiple currencies over the Zimbabwean dollar. Apart from dealing with corruption, government must right its relations with other countries to attract foreign direct investment which would then improve the economy. Economist Irimai Mukwishu concurs, adding this could help Zimbabwe access money to resuscitate the economy, thereby creating jobs and improving people’s lives. Former chief economist with Treasury, Masimba Manyanyaya, says this is attainable as long as the government sets its priorities. He discourages Zimbabwe’s costly ventures into crisis such as the involvement in the Democratic Republic of Congo in the late 90s.
 Further Moyo, says, government must create an enabling environment by addressing policy inconsistencies which deter investors from investing in the country. But some remain hopeful, despite the poor state of the economy. Some residents, though pessimistic about the situation, still hope the government will revive the economy somehow.
 Since independence Zimbabwe has adopted and implemented various economic policies and programs such as the economic structural adjustment program, land reform program, indigenization policy and short term economic review program and some of them have been blamed for collapsing the country’s economy while others were abandoned after it was realized they were not suitable for the country. Only those connected to the government leaders were and continue benefitting from the country’s resources.

Zimbabwe turns to Special Economic Zones (SEZs) for economic growth

Zimbabwe, dogged by severe economic challenges, is aiming at establishing special economic zones (SEZs) as a tool to attract foreign direct investment and boost economic growth, senior cabinet ministers revealed. Simon Khaya Moyo told the audience at a workshop that the country was seeking to use SEZ as a plan to promote economic growth and re-position the country as one of the strongest economies in the southern Africa. A special economic zone (SEZ) is a geographical region that is designed to export goods and provide employment. SEZs may be exempt from laws regarding taxes, quotas, Foreign Direct Investment (FDI)-bans, labour laws and other restrictive laws in order to make the goods manufactured in the SEZ at a globally competitive price. The category SEZ includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ) or free economic zones (FEZ), industrial parks or industrial estates (IE), free ports, and urban enterprise zones. The operating definition of an economic zone is determined by each country's trade and customs administration.

 Establishment of SEZs is one of the key policies enshrined in the country’s current five year economic blueprint, Zimasset, running till 2018. He said that SEZ will increase the economy’s capacity to produce and export goods and services, attracting investment inflows from both domestic and foreign sources, creating employment and poverty reduction and strengthening the country’s industrial bases. Zimbabwe once created export processing zones in the late 1990s to the early 2000s that offered special incentives to investors who wanted to produce for exports. The zones however, got affected by a decade of economic crisis up to 2008, resulting in them folding up. Moyo added that Zimbabwe wanted to use the SEZs to respond to the current economic challenges in the country and as a tool to penetrate global markets. Once successfully implemented, Moyo said the SEZs would bring enormous economic benefits to the country that include improved revenue inflows to the government, accelerated information and industrial development, skills transfer into the economy, increased beneficiation and growth in industrial production and employment creation.  

Speaking at the same occasion, Finance Minister, Patrick Chinamasa said Zimbabwe needed to learn from other countries that had successfully industrialised their economies. He pointed out that Zimbabwe needed to transform itself from being a net exporter of unprocessed goods into a net exporter of beneficiated goods and noted that SEZs were one tool that the country could use to accelerate industrial development. He noted the success of SEZs in countries like China and India. “We must understand the policies of those who created that prosperity and for us in Zimbabwe this means taking conscious and deliberate steps to steer way from raw material activities into manufacturing, value addition and beneficiation,” he said. He added that for Zimbabwe to prosper economically, the country has to study and understand how other nations have managed to develop. He said that the economic paths taken by countries such as the United States, Europe and China were good examples which Zimbabwe needed to take a cue from.

The reversion to a national currency is imminent

Zimbabweans have been afflicted by negative economic circumstances for over 16 years which include recurrent scarcities of essential medication and equipment in state hospitals and clinics; textbooks, and other educational aids needed in government schools, and intermittent availability of utilities and other services. Consequently if they hear a rumour which is positive in nature they dismiss it. On the other hand, if the rumour is negative, it is immediately considered to be based on facts, and is conveyed to others so that they become aware of the unfavourable circumstances. Of the many rumours devoid of substance but which are perceived to be factual one of the most frequently repeated since 2009 is that reversion from the current multi-currency system to a national currency is imminent.

Over the last five years that rumour has surfaced many times, the first time within four months of the demonetisation of the Zimbabwe dollar and the adoption of the multi-currency system. Despite that on each occasion the rumour has been proven untrue with the multi-currency system remaining in force and the Zimbabwean dollar remaining demonetised, the rumour has resurfaced again and again. Every time the rumour has made the rounds the negative repercussions have been considerable. Some of those with funds in banks and financial institutions immediately withdrew their funds, be they US dollars, South African rands, Botswana pula, British pounds, euros or otherwise. They did so due to intense fears that, simultaneously with a reintroduction of a national currency, their foreign currencies in the banks and financial institutions would immediately be expropriated by government or the Reserve Bank, with compensation being effected in Zimbabwean dollars at the exchange rate which prevailed when demonetisation occurred.

As a result, the money market was immediately subjected to immense illiquidity.
That precluded vital lendings to commerce, industry and other economic sectors, and triggered substantial increases in interest rates and bank charges.
Concurrently, past expectations of reversion to a national currency fuelled increased operations of black market trading in foreign currencies, with a special emphasis upon sales of foreign currencies held abroad by some Zimbabweans as many became anxious to have foreign currency holdings outside Zimbabwe's borders. This had the effect of diminishing the highly inadequate foreign currency resources in Zimbabwe, thereby further weakening the economy, including fuelling inflation.

Moreover, the currency rumours and attendant economic instability and uncertainties became major deterrents to crucial investment into the economy. Potential foreign investors feared for the security of any investments they made, and in particular that any investment earnings or subsequent proceeds of disposal of the investments would only be repatriated to them in Zimbabwean dollars. Concurrently they, and the few potential domestic investors, feared demonetisation of a national currency would trigger an immense economic decline that would render their investments worthless. Recently, the rumour of the restoration of the national currency has reared its ugly head yet again. Initially it was fuelled by a statement in February by President Robert Mugabe that Zimbabwe will revert to its own currency.