Zimbabwe: A Roadmap for Economic Transformation

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Judith Tyson, August 2017

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Zimbabwe has suffered from economic decline in the recent past, with a 60% reduction in its gross domestic product over the past two decades. There have been multiple acute crises and a deep structural regression in its economy. This has included deindustrialisation with degradation of capital stock and low capacity utilisation in the manufacturing sector. The agriculture sector has suffered from declining productivity and only the mining sector has thrived, but this is mainly because of the commodity ‘super cycle’ that ended in 2015. Ideally, there would be broad and deep macroeconomic reforms but many commentators see this as unrealistic without significant political change. Instead, new strategies that are feasible in the political economy of Zimbabwe are needed to get the country’s economy back on track.

This paper argues that the most viable is a ‘single sector, single agent’ approach – whereby transformation is focused on a single sector with high potential and led by a single reformist agent within government – and this could ‘kick-start’ change. First, Zimbabwe has inherent competitive advantages. These include rich natural endowments in agriculture and extractives, including gold, platinum and diamonds; proximity to key regional markets in South Africa, Zambia and other neighbouring countries; and good levels of education and business skills. These provide Zimbabwe with the potential to develop value-added, export-led manufacturing and processing of its products, with resultant and much-needed formal, higher-wage employment and fiscal revenues.  Second, experiences in comparator countries show that, under such a strategy, there is no need for pre-existing ‘good governance’ for transformation to begin. Conditions such as a well-functioning democracy, transparency, civil society empowerment or the absence of corruption are not necessary. Indeed, there is no need for comprehensive change in institutions and power structures.

 

 

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