Sabotaged by weak and often predatory governance during most of the 21st century, the Zimbabwean economy continues to fail ordinary citizens in their pursuit of a better life.
New research by the Institute for Justice and Reconciliation (JR) examines three epochs of governance in Zimbabwe to better understand its impact on the economy, and consequently social cohesion and stability: 2000 to 2008; 2009 to 2013, during the government of national unity (GNU); and 2014 to 2020. Its findings point to a strong relationship between good governance on the one hand and sustainable peace and cohesion on the other. Importantly, it identifies good governance itself as a pivotal driving force for equitable and inclusive development.
At its core, the analysis illustrated that under the GNU, improved governance created an enabling environment for inclusive development, with resultant benefits for peace and security. Using data from various sources, the researchers found that not only did governance indicators improve during the period of relatively improved governance under the GNU, but it also increased revenue and facilitated progress in human development. Additionally, working poverty decreased and trust in institutions improved, as did political stability. This highlights the crucial role that strong coordinated governance can play in securing a more peaceful and inclusive Zimbabwean society.
Unfortunately, the important gains made under the GNU have not been sustained after its demise in 2013. As a result, Zimbabwe has taken a path of deteriorating governance, economic decline and growing instability. The implications of the economic slowdown affected government revenue inflows against the backdrop of the strengthening of the now dominant currency, the US dollar. As such, price points rose and made an unattractive foreign direct investment climate. Exports also became expensive compared to regional competitors while industrial production was under severe strain, with companies increasingly struggling to import key raw materials. Consequently, Zimbabwe began to face serious liquidity problems, resulting in banks limiting daily withdrawals alongside the closure of many businesses.
With reduced revenue, the government’s capacity to address critical human development needs diminished substantially. As a result, gains from the GNU era came under strain as the government struggled to meet its key obligations in the provision of public goods.
The impact of these developments has been a deterioration in key metrics for human development in areas such as health and education. The Covid-19 pandemic has had a further crippling effect on these underperforming spheres.
While the pre-GNU era was characterised by hyperinflation and a shortage of goods, the first three years after GNU were characterised by cash shortages but with the availability of goods in shops. Today, poverty levels increased yet again, and the government struggled to meet its public wage bill, which now consumed more than 90% of government revenue. This meant that government was now solely an employer and could no longer do anything else to promote human development. To meet its high salary obligations, the government had to start printing money to pay workers and as a result the menace of inflation once again re-emerged. The value of the pseudo bond currency declined sharply on the parallel market and prices of basic commodities again began rising exponentially.
As such, the economy became highly informalised with limited prospects for employment growth, forcing workers into a growing informal, and frequently illicit, economy. More money was circulating in the informal sector because citizens had no trust in the formal economy.
The end of GNU also changed the governance dynamics for the worse. From 2013 onwards, the governance dissonance within ZANU-PF had an impact on the economy. Between 2014 and 2017, ZANU-PF was factionalised because of succession politics relating to the then ailing president Robert Mugabe. Factionalism within the cabinet and the government bureaucracy paralysed the state’s ability to respond timeously and decisively to the growing economic crises. This had detrimental effects on both human development and social cohesion. It is under these fragile circumstances that a military coup ended Mugabe’s long rule in November 2017.
Using the latest Afrobarometer data collected in 2021, public perceptions of how the government is handling society’s developmental needs paint a grim picture. Nine out of ten (91%) Zimbabweans feel that the government is performing poorly with job creation, while three in four people believe the government is doing badly at addressing youth needs (77%) and improving the living standards of the poor (75%).
This dissatisfaction translated into higher levels of social instability. Data from the Armed Conflict Location and Event Data (ACLED) Project point to the correlation between stable governance and stability, and its converse, weak governance and conflict. During the GNU, when GDP growth peaked at 20% in 2010, the number of violent events declined substantially. Since 2014, however, growth has slowed, and Zimbabwe has experienced an uptick in civil unrest.
Without meaningful opportunities for society, and youth in particular, pockets of instability might continue to absorb those being pushed to the margins of economic inclusion. A recent skills audit illustrated the chasm of mismatch in the labour market. In abundance is the supply of skills related to commerce and business, a factor wholly necessary to support market-driven growth. As such, policy interventions must consider how to harness these skills through stimulation of business activities, useful not only for creating income opportunities, but also for strengthening the private sector and thus creating a positive feedback loop for inclusive development.
The skills audit also lays bare the shortage of medical and health science professionals (a 95% deficit), clearly necessitating investments into education in this field, where there is a strong potential to absorb youth into work streams. This points to the importance of budgetary considerations for the healthcare sector, so that skilled professionals in public healthcare jobs can be certain of remuneration, preventing further skills drain. The decreased expenditure in healthcare hurts both the quality of life of Zimbabweans and the prospects for offsetting skills deficits in the labour market, which sets off its own chain of positive developments.
Targeted and informed investments in skills development are necessary to offset labour market mismatch. This includes working with the private sector to create opportunities for the oversupply of business and commerce graduates, who can in turn stimulate growth. It also necessitates greater investment in healthcare education and healthcare systems so that skilled professionals are incentivised to work in public healthcare facilities that face skills deficits.
It is also crucial that the state consider financing social safety nets for the informal sector. The size and extent of dependence on the informal sector by society necessitates proper consideration of macroeconomic policy that can after some time facilitate the development of social safety nets for households whose main source of income is derived from informal trade. For example, developing employment- intensive industry with a focus on niche areas in the global value chain, from which state revenues can over time be leveraged to introduce a social security net.
The international community also has a role to play. In particular, it must seek ways to empower civil society and civil society organisations to advocate for themselves. This is especially critical at a time when the civil space is becoming increasingly restricted. In addition, donor aid priorities must be informed by the skills audit. Targeted training and education will advance the inclusive economic development prospects for Zimbabwe.
In light of the above, the research point to the critical need for a committed strategy to improve the quality of governance, within a context of scarce resources. A lack of focus and poor judgement could further rupture the fabric of the Zimbabwean society. As such, the quality of the management of critical resources within this context of scarcity will become increasingly vital for the stability of Zimbabwean society.
You can find the full analysis by IJRs Inclusive Economies project here.
Jaynisha Patel is the Project Leader for Inclusive Economies at the Institute for Justice and Reconciliation (IJR)
Dr Cyprian Muchemwa is a lecturer in the Department of Peace and Governance at Bindura University of Science Education and a Research Associate at the International Centre for Nonviolence at Durban University of Technology