By Thulani Mswelanto
The past decade has witnessed immense debate on what could have destroyed a promising African economy with mainly two proposed theories or rather narratives.
These accounts are partly shaped by a polarized political discourse with one acutely arguing that US and West imposed sanctions through ZIDERA passed by the 107th United States Congress in 2001 sucked the main blood artery of the economy and began a process of syphoning out Direct Foreign Investments and freezing credit lines from Bretton Woods institutions and GATT (broadly all IFIs where the USA has interest and exercise considerable control).
This account is largely built upon citing section 4(c) of ZIDERA on financial restrictions. I will not dwell into greater detail at this stage, it is reserved for in depth analysis at a later stage of this paper.
The second dominant contestation alleges that the Structural Adjustment Programs (precisely the Economic Structural Adjustment Program [ESAP]) dealt a shattering blow to an infant economy by opening up economic activity to well established global capital hence stifled the development and growth of infant indigenous industries while a protracted gross exploitation of labor ensued which obviously meant an erosion of the working classes buying power and extensive cuts in government social expenditure.
While the two narratives have largely shaped public opinion on Zimbabwe’s economic misfortunes, in this paper I maintain that seeds for economic downturn were sown in the initial years of independence and that by 1987 Zimbabwe’s economy had knelt down on its knees and what followed after 1987 simply provided a fertile ground for the growth of economic downturn whose seeds had germinated in the aftermath of the independence celebrations.
In this paper I dismiss the structural approach to understanding political economy by offering a coherent and sustained processual understanding of economic de-growth and de-development.
Not Yet Uhuru
Zimbabwe attained its independence as a result of both military and diplomatic overtures, this paper will not get into detail on the intricacies of the liberation but an international issue that is of interest is the role of the United Nations in extending economic embargo on Rhodesia through the mandatory sanction during the last 6 years of minority white rule.
The net effect of these sanctions from the United Nations was to render the Rhodesian economy a closed entity which could not compete with the rest of the world. Nevertheless the economy continued to produce for internal consumption and entered into bilateral trade agreement with apartheid South Africa in what appeared to be a sanctions busting strategy.
Suffice to say the period immediately prior to independence had witnessed List’s Model of Infant Industry protection which of course occurred inspite thereof. Zimbabwe therefore inherited a relatively prosperous indigenous industry with the dollar at its strongest in other terms the economy had surpassed the Rostow’s take off stage.
At the time of independence annual inflation was 5.4 percent and month-to-month inflation was 0.5 percent. What was needed at 1980 was the recapitalization of the infant industry and gradual opening of the economy while the state continued to protect these industries using a priority index to enable the economy to move from internal consumption to trading in the international sphere while still servicing the domestic market.
At this stage I look at how the new “uhuru” government responded to the challenges of a new dispensation in the first 10 years of independence. I deliberately look at what I presume were a series of economic blunders coupled with presumed ‘internal national security threats’ drawing a score-sheet of their adverse economic impact on the new state.
In the 1982/83 agricultural season the government was caught unawares by an extreme drought and no measures had been put in place to counter the effects of proving relief on the citizenry from the fiscus government response to the food crisis contributed to the rise in inflation from 15% in 1982 to 17% in 1983 a very significant rise in the rate of inflation in economic terms.
The government also went on to commit a series of other economic blunders by engaging in an unbudgeted military expedition in the Matabeleland and Midlands Provinces from end of 1982 to 1987 in a bid to silence dissent from presumed ex-ZIPRA ‘dissidents’ costing in overall a substantial figures while coupled with depressed foreign demand for the country’s mineral exports and the onset of a drought cut sharply into the growth rate in 1982, 1983, and 1984.
In 1985, the economy rebounded strongly due to a 30% jump in agricultural production. However it slumped in 1986 to a zero growth rate and registered negative of about minus 3% in 1987 primarily because of drought and foreign exchange crisis faced by the country.
At this juncture it is important to note that a series of corruption activities were also brewing among the liberation war heroes which went unpunished with the most notable ones being the 1987 Zisco Steel blast furnace scandal (Sokwanele: ZISCO: The cost of Zimbabwe’s kleptocracy), 1987 Air Zimbabwe Fokker Scandal, 1986 National Railways Housing Scandal, 1988 Willowgate Scandal, 1989 ZRP Santana Scandal Willowgate Scandal during the first ten of independence and of course over 20 major others that took place from 1994 to 2008.
Having built this narration it is important to note that by 1988 Zimbabwe had been plunged into debt and the then Minister of Finance Dr. Bernard Chidzero had nicodemously requested a loan from the IMF to which a tune of US$300 million was availed and had to be paid with an interest amounting to US$550 million further burdening the already ailing economy.
By 1989 Zimbabwe had been plunged into the Economic Structural Adjustment Program which policy was falsely parroted and defended as a ‘homegrown solution.’
In the same vein it is important to appreciate that this historical background informs an understanding of the decision by the new government to embrace ESAP thus if Zimbabwe’s economy had been performing well during the initial years of independence there was no need to embrace ESAP, ESAP therefore was a prescription to cure a failing economy which at its termination had contributed to the 110% inflation mark.
In the next paper I will devote sometime to the effects of ESAP on Zimbabwe and give more emphasis on the Zimbabwe Democracy and Recovery Act, the suspension from the Commonwealth and the EU sanctions and their role in the Zimbabwe economy.
