eBusiness Weekly
Dr Tinashe Nyamunda The Economy Corner
At the launch of Business Weekly on 10 July 2017, I found the acknowledgement of the Minister of Finance, Patrick Chinamasa, that Zimbabwe was experiencing an emerging new economy especially interesting.
He noted that where there had been only 1,700 white tobacco farmers, in their place there are now the 98,00 African tobacco producers. He also keenly noted that the number of small to medium enterprises and informal sector players had multiplied in the wake of a reconfigured political economy following the land reform programme from the early 2000s. In as much as he found a lot to celebrate about the benefits of the emerging economy, he also admitted that it faced numerous challenges.
Minister Chinamasa could not have been more correct to observe these dynamics and call for both the media and academia to come to report on, study and try to understand them. In this article, I will begin to unpack the phenomenon of what he called an “emerging new economy”, which I conceptualise as a reconfigured political economy.
From an economy based on a generic state, which was the product of a colonial inheritance complete with its economic structure, it was massively reconfigured to become highly irregular and informal. In fact, Professor Sabelo Ndlovu-Gatsheni has characterised this kind of state not as a neo or post-colonial state as many scholars have done, but as a continuing condition of coloniality. In this kind of state, the only change is that of the leadership whilst the colonial matrices of power continue to endure thereby compromising the attainment of complete independence. What Minister Chinamasa spoke about, was an attempt to confront the state of coloniality on the basis of Indigenisation and Economic Empowerment. The benefits of this, as many scholars have observed, are that many black people have been resettled onto new land and some African business people accessed previously exclusive sectors of the economy among other examples. Confronting the state of coloniality is very challenging. While many are indeed resettled, according to Ushehwedu Kufakurinani and Wellington Bamu’s study of land reform in Inzisa district, they are still unsettled.
The formal economy has largely collapsed; industries closed down, capital flight and illiquidity the order of the day.
The new economy is tremendously reconfigured and the emerging challenges have resulted in what has been considered a crisis. But does this mean that confronting the state of coloniality is in vain? By no means!
The main challenge emerging out of the decolonial encounter is, in my view, the capture of the country’s strategic resources by a small and influential political elite. Some of these issues are examined in a book I co-edited entitled “Facets of Power: Politics, profits and people in the making of Zimbabwe’s blood diamonds” published by Weaver press. In this book, we argue that the Zimbabwean crisis is as much a product of internal as well as external factors.
The Zanu-PF government has repeatedly emphasized the influence of sanctions on the economy, but as I have argued elsewhere, despite contextual differences, the rogue Rhodesian state managed to survive sanctions and establish a thriving economy between 1965 and 1979. However, the Zimbabwean experience has been quite the opposite, but perhaps this was the product of a necessary but painful process of reconfiguring the economy. But the more fundamental point resulting in the unending crisis may not be as much the painful changes as it is the capture of strategic resources by a few elites.
Minister Chinamasa was correct to cite the challenges confronting the new economy but here, I will briefly build upon his assessment by noting what I think is the main source of this crisis. Let me take the example of two strategic minerals which could have become the mainstay of the Zimbabwean economy, whether in attempts at revival, or building upon a newly reconfigured one.
Diamonds and platinum had the capacity to support the economy in a significant way.
A lot of value could have been realised from their official , regulated marketing. The head of state indicated that the country lost diamond revenue estimated at $15 billion between 2009 and 2016 in a country where the national budget amounts to some $600 million per annum.
Much of this revenue was laundered to off shore banks and very little money accrued to the state in terms of taxes. In the platinum sector, the mineral is being exported as ore to South Africa and the country is losing not only in terms of value addition, but also the other minerals that can be derived from the processing of mineral ore which contains six other minerals.
Even with the state currently involved through, for example, the Zimbabwe Consolidated Diamond Company, some officials (who requested anonymity) from the Zimbabwe Revenue Authority complained that the process was still not transparent and they could never properly determine what amount of production and export was taking place.
Parallels can be drawn with the Democratic Republic of Congo which possesses rich mineral resources but whose people are among the poorest. This is a problem we should confront not just in Zimbabwe but in an Africa struggling to construct an economy that can benefit its indigenous populations.
Zimbabwe’s strategic minerals, by themselves, could have given the state an important opportunity to build a huge capital base to fund other projects in agriculture and other sectors of the very dynamic and highly shifting economy. Clearly, the benefits that could be accrued from curbing the illicit outflows of finance from the shadowy exploitation of strategic resources by country’s elite could be enormous.
They have a massive trickle-down potential. I suggest here that a discourse on the crisis in Zimbabwe would be incomplete without acknowledging the capture of these crucial resources. T
he reconfigured political economy could fare much better with the capacity that could be provided by changing the ways of doing business in the mining sector, particularly in the examples that I have used.
Any discourse on Zimbabwe’s economic potential will remain mere rhetoric if only harnessed by a handful of elites who have captured these strategic resources at the expense of the nation.
- Dr. Tinashe Nyamunda is an economic analyst and consultant. He writes in his personal capacity.
