The little matter the economy and “the new dispensation” in Zimbabwe

Tinashe Nyamunda

Building upon Dan Hodgkinson’s piece, which focused on Zimbabwe’s neo-liberal turn (again), I will share my perspectives on where I think Zimbabwe is coming from and where it is going.

Much attention has been focused on the failings of the ZANU PF regime since the 1980s; focusing on different aspects of its rule. Discourses on the record of this nationalist liberation movement-turned-government have centred on its authoritarian rule, maladministration, corruption, neo-patrimonialism, clientilism, political paternalism, violence among other rationalising concepts. Although acknowledging some initial positives in health and education which are being eroded, land reform and mixed attempts at economic indigenisation, other scholars have turned towards amplifying what they view as the negatives from these experiences. As illuminating as all of these perspectives are, they are insufficient in explaining the current crisis. They miss a critical point that applies to the challenges facing other countries on the continent; and that is an assessment of how to manage post-colonial economies.

Many commentaries that discuss economic collapse in Zimbabwe have correctly and consistently pointed to the capacity and shortcomings of the ZANU PF government’s (in)ability to manage the economy and its predation of it. As the economic situation deteriorated in post-colonial Zimbabwe, the most effective challenge emerged from the ranks of the labour movement who initially proposed alternative policies, suggesting that their custodianship would result in better economic management and development. They espoused a number of policies that resonated well with their various constituencies but on many occasions, failed to remove ZANU PF from political office through democratic means, only coming the closest to doing so in the March 2008 elections.

The economic situation in Zimbabwe had deteriorated so badly that the country recorded the first hyperinflation in the twenty first century and one of the worst in global history as political instability and violence escalated. Despite refusing to accept defeat at the polls, ZANU PF had little wiggle room and managed to survive by conceding to a Global Political Agreement led by South Africa, which resulted in a Government of National Unity (GNU) with the MDC between 2009 and 2013.

As the GNU was being negotiated, the public rejected Zim dollars which had been the country’s  currency since 1980, forcing the Minister of Finance, Patrick Chinamasa to dollarise the economy under the pretext of a multi-currency system. Under this arrangement, a number of foreign currencies could be legally exchanged locally for transaction including the Chinese renminbi, British pound, the Euro, South African Rands, Botswana Pula all of which were dominated by the United States dollar.

For a while, under the watch of MDC legislator Tendai Biti as Minister of Finance (2009-2013), the economy stabilised owing to his approach of spending within the limits of the capacity of the state. His tenure shifted course from the Quasi-Fiscal activities which had seen the Reserve Bank of Zimbabwe under Gideon Gono’s administration (2002-2011) run the printing press into overdrive and the economy into hyperinflation to finance government spending. But no sooner had the GNU elapsed and Chinamasa re-appointed to the Finance portfolio following a ZANU PF victory at the polls, that overspending began and the crisis became re-ignited. By 2016, the country was facing a severe shortage of dollars, prompting a liquidity crisis that Reserve Bank Governor John Mangudya, appointed in 2011, introduced a pseudo currency (bond coins and notes) disguised as an export incentive.

Barely three years later, and in the aftermath of a military intervention that resulted in the ousting of President Robert Mugabe by his former deputy Emmerson Mnangagwa, Zimbabwe appears to be on the verge of another hyperinflationary implosion, ironically despite the enduring liquidity crunch.  Despite the maintenance of an artificial 1:1 parity between the bond notes and the US dollar, the market value of the pseudo currency has depreciated by over 350 percent and is likely to depreciate even further if this remains unchecked. Ironically, there are over (B$)10 billion, including RTGS in an economy with an import cover of less than two months  and which is consistently running enormous balance of payment deficits.

To address the challenges the country faces, President Mnangagwa assembled a cabinet with some technocrats. Desperate to give the country much needed political and economic credibility, Mnangagwa presided over elections that appeared peaceful and appointed to the finance portfolio Mthuli Ncube, whose credentials look impressive. However, the aftermath witnessed the killing of some six people during a protest to demand the release the results of presidential results which opposition politicians and their supporters suspected of being doctored to favour Mnangagwa.

Recently, following protests over fuel hikes, more than 12 people were killed, hundreds injured at the hands of heavy handed retaliation from the security forces and vocal civil society leaders and youth accused of having participated were detained. This has tainted the image of the new dispensation that has just completed a round of negotiations with Russia and other countries seeking investment and financial bailouts.  The economy has slipped even further into crisis under the watch of Ncube whose confidence among the Zimbabwean public is at best mixed. This has led to increased political, public and academic discourse about the best approach to resolving the crisis.

The opposition, now under Nelson Chamisa – who succeeded as party leader following the passing of Morgan Tsvangirai – maintains that it can do a better job. But without elaborating its policies, they appear ideologically very close to those of ZANU PF.  Ncube, whose approach is still anchored on maintaining bond notes/dollar parity, in the immediate term, argues that he will make currency reforms and introduce what he hopes to be a more stable currency within two years.

Meanwhile, he is working to improve the country’s economic image through a policy of fiscal consolidation to rein in government spending, reduce, at least, local debts by raising all sorts of taxes and by laying out a plan to deal with international debt. As far as I am concerned, he is attempting to address the symptoms of a problem rather than deal with the problem itself. The problem is not just about monetary reforms and fiscal consolidation, it’s much more deep-seated, historical and structural.

The shortcomings of neo-liberal economic policies

Ncube’s policies -largely neo-liberal – address the demand aspects of the economy yet the challenges are connected with production. On top of unchecked spending by the government, the economy is just not producing sufficiently enough to generate foreign exchange to get it into a state of equilibrium. This is simply what resulted in the liquidity crisis after 2013. There is just no way a country without secure land agrarian tenure, characterised by leakages, money laundering, under-invoicing and so forth, in its corporate sectors across the economy can run so efficiently. There are many examples of a state captured economy and rampant corruption that politicians pretend do not exist, and until at least some of these issues are meaningfully addressed, not amount of tinkering around the edges by talking about currency reform and fiscal consolidation will change anything. If anything, it can worsen the problems.

For me, this raises a far more fundamental question about the logic of economy management in Zimbabwe. There seems to be an enduring fascination with technocrats and confidence that they are best suited to address the country’s problems. This can be traced back from the country’s second Minister of Finance, Bernard Chidzero (1983-1995) to the incumbent. Yet, consistently, the country has been on a trajectory of economic decline that has never been sufficiently addressed. Never mind any talk about the politics, as indispensable as it is in explaining the crisis, but the source of the sustained confidence in technocrats despite their consistently disappointing record is worth examining. For me, this is an important element that has been missing in the explanations that have investigated the source and endurance of the crisis in Zimbabwe.

The idea of examining the nature of economic management in postcolonial African countries was something I have considered for the better part of my academic career, but it was recently reinforced by a recent book called Transforming Sudan, authored by Drexel Professor Alden Young. In it, he interrogates the origins of the framework inherited by Sudanese policy makers inherited from the making of its colonial economy as an Anglo-Egyptian condominium and applied following the country’s independence in 1956.

This framework is anchored on a system of National Income Accounts (NIA). These were part of the kinds of administrative tools that Daniel Speich identified as global abstractions. The NIA framework considers the extent to which the country can make and account for its income as represented in such instruments as the Gross National and Domestic Product (GDP and GNP), among other indicators. There have been, for the most part, used as a measure of the success that governments have made in terms of their administration. While they are seen to matter in measuring the rate of economic success, they put pressure on governments to find ways of performing in terms of GDP so that they can use that to seek further mandate to continue ruling. However, wherever they have been ineffective, as in the case of Zimbabwe, the government keeps the performance of seeking economic solutions while deploying arsenal that includes patronage and authoritarian rule to maintain power.

The origins of the use of global abstraction

The use of global abstraction in the sort of government by technocracy has its roots in the late colonial period. Starting with Colin Clark’s work published in the 1940s, these statistical tools and abstractions had become the popular mode of governance in the global north and were applied in Nigeria in the late 1940s and 1950s. They worked through the collection of statistics on the basis of, for example, births and deaths registration, trade statistics at household, community, national and international levels. Over time, surveys on demography and health, population figures, trade, and other statistics became important in determining from per capita income to national GDP figures.

As this process became rooted, the first person to try it in this part of the world was a Cambridge scholar, Phylis Dean who tried to collect data and produce National Income Accounts (NIAs) for the central African region. She had begun her research in the late 1940s, but by the time the central African colonies of Nyasaland (Malawi), Northern and Southern Rhodesia (Zambia and Zimbabwe respectively were brought into the Federation of Rhodesia and Nyasaland; she concluded that the process of doing this in an African context was extremely difficult. Unlike the industrialised countries of the global north, Dean could not measure communal agrarian work done by work parties, children’s involvement and the work done by women easily and in monetary terms. Secondly, even the paid work of African males was very difficult to measure given labour migration, the nature of other seasonal types of employment, lack of traceable work contracts and benefits in some cases in economies whose currency was a colonial conduit of empire.

In her 1953 monograph, she conceded that the task of using these systems in African economic management would not be as easy for Africa as they were for Europe. Yet a few years later starting with the Independence of Sudan in 1956, technocrats would adopt these systems and apply them to the African continent. Over time, as the United Nations (UN) adopted the notion of development, they made as a condition for joining the organisation, the use of these abstractions for purposes of comparing GDP figures as had originally been intended by the work of Colin Clark in the 1940s. This was despite the findings that such measurements would not be sufficiently applicable to many African economies whose economic structures were colonial and that exploited subjects in the process of economic development rather than include them. Yet the UN insisted that newly independent countries that wanted to join the organisation provide these figures as a necessary condition.

To help guide the process, they created the United Nations Economic Commission for Africa. Among its first officials in the secretariat was a Rhodesian African academic who had just lost the opportunity to join the newly established University College of Rhodesia because of his marriage to a work woman which flouted anti-miscegenation sentiment in the colony.

Chidzero, who had received a Bachelors’ Degree in Political Science at the National University of Lesotho had proceeded to gain a Masters and Honours Degree in the same programme in the United States. He then spent some time in Oxford studying economics related work before his appointment to UNECA. His experience there between 1960 and 1968 and as Deputy Secretary General at the United Nations Commission for Trade and Development (UNCTAD) would prove decisive in his administrative approach when he was appointed Minister of Economic Planning between 1980 and 1983 and Minister of Finance between 1983 and 1985, making him the longest serving Minister of Finance in Zimbabwe.

Chidzero’s experience with the UN bodies entrenched his NIA approach to economic management to the extent that he was involved in the programme for training economists from newly independent African countries in this approach. He even authored a paper that outlined the leading role of the United Nations Commission for Africa in 1963 for the African Studies Bulletin. Even as Zimbabwe attained its independence, it joined the United Nations and fully accepted the conditions of economic management dictated by the organisation. But in as much as the NIA approach appeared to be a modern way of managing the economy in the second half of the twentieth century, it was problematic at many levels.

Young critically asks; what is an economy ?

The example of the first country to get independent in Africa – Sudan –  should be illustrative. Young’s focus is ‘concerned primarily not with the heroes of the independence movement in Sudan, but with the officials who strove to govern Sudan after January 1, 1956’ (p. vii), the date at which that country (now separated into two countries) attained its political independence. This is only slightly misleading as Young brilliantly traces Sudan’s Anglo-Egyptian administrative history precisely to map out how colonialism transformed itself through officials that used the logic of economic development to govern and ironically further embed colonial relations of exchange in the a postcolonial setting.


Among the critical questions he addresses is: what is an economy? But to address this question, Young first determines the nature of an African nation-state in which an economy is the central organ that breathes life into it. Still a problem political science has to continue examining, Young observes that ‘[d]espite all of the political and intellectual activity that aimed to find alternatives to the nation-state, it still emerged as the chosen, almost ready-made, or modular solution at independence, as one country after another emerged from European colonialism’ (p. 15). In the setting, the infrastructure of an economy had been established in ways that were difficult to reconceptualise for early planners, as the “economy” was ‘represented as a combination of the aggregate figures collected by the state’s statistical agency’ (p. 16).


As Sudan gained its independence, to manage the state, accounting, quantifying production and determining tax income receipts became the basis of planning. Development was heavily anchored on ways in which production could be increased in the primary production of cotton. Earning foreign exchange became the primary motivation of state-building, and the country would borrow and invest in dams, construction of road, rail, water-based, hydroelectric and irrigation infrastructure to achieve this. Guided by a kind of ‘economising logic’, the planning infrastructure was heavily dependent on calculating what could be earned from exporting Sudan’s primary export at the time: cotton. So, what was transformed in Sudan by the 1960s, was not so much the colonial economy as it was the people who planned and managed it at independence. Young makes an important observation in demonstrating the extent to which economic development was at the centre of state formation in Sudan, and that the only transformation worth noting before the 1960s is that of the planning regime that was inherited and which endured after independence.


Crucially, his case study of Sudan provides an important example from which to appreciate developments in other contexts on the African continent. So, instead of any significant structural transformation, the concentration with income accounts and fetishism with GDP only led to an entrenchment of neo-colonial production of cotton for export to the global north, all of which proved problematic for Sudan and which ultimately yielded recurrent BOPs as the economy was no longer sheltered under the colonial sterling currency area. Production of cotton for the colonial economy had been sustained by a colonial currency cover which minimised the currency instability that would be wrought on the economy in a case where deficits emerged under a floating monetary system.


And these are the same trappings Zimbabwe is confronted with


This is the same trap that Zimbabwe adopted at independence. Under the watch of  Chidzero, Zimbabwe started off by trying to meet sufficient exports to sustain a recently floating Zimbabwe dollar which had been sustained as a Rhodesian dollar by stringent exchange controls between 1965 and 1979. What further stifled Chidzero’s room for manoeuvre was the Lancaster constitution that restricted any radical transformation such as land redistribution outside a willing buyer-willing seller model and respect for property rights.

The need to attract foreign investors led Chidzero to adapt what he called a pragmatic approach, avoiding any kind off rhetoric on socialism and suggesting that investments would be safe in Zimbabwe. To deal with the inherited odious debt at independence, The Minister planned an investment conference to raise money in the hope that it would give Zimbabwe’s development a shot in the arm. The Zimbabwe Investment Conference (ZIMCORD) that was held in 1981 raised over US$3 billion and it was expected that even under the terms of independence Zimbabwe had agreed to at Lancaster, a National Income Accounts management framework predicated on sustaining the economy and its currency through exports would be sufficient. But by the late 1980s, imports outstripped exports and the economy was under severe strain and this led it to the IMF and World Bank.

Chidzero, was at the forefront of pushing for the adoption of neo-liberal economic reform attached by the IMF/WB as conditions for securing loans to balance the national budget and recurrent BOP deficits. Influenced by the NIA framework, Chidzero adopted the Economic Structural Adjustment Programme between 1990 and 1995. He had been so invested in UN programmes and believed in them so much that he had held the position of Chairman of the Development Committee of the World Bank between 1986 and 1990 while he also applied for and been runner up to Boutros Boutros Ghali for the position of UN secretary General in 1990.

It is unsurprising that he was a strong advocate for adopting the IMF and World Bank loans and its conditions. Their effects across Africa, even before Zimbabwe adopted them had been disastrous as they opened up fragile economies to international cheap imports that undermined prospects of industrial growth and also compromised the BOP positions of these countries and therefore weakening their currencies and economies.

Within Zimbabwe, as Alois Mlambo has demonstrated in his study of ESAP, they wrought the same havoc, eroding early gains in health and education services. Ultimately, under the strain of ill-timed political compromises such as War Veterans payment and the Mugabe government’s adventure into the Democratic Republic of the Congo, the currency finally collapsed into a crisis that culminated into the world’s first hyperinflation of the twenty first century and the demonetisation of the Zim $ in 2009. Successive Finance Ministers and whole generations of economists educated under the curriculum that followed these kinds of economics logic unquestioningly followed the legacy left by Chidzero who eventually dies in 2002.

Ncube largely follows Chidzero’s way too!

Ncube, an Oxford trained economist whose reputation similarly follows that of technocrats such as Chidzero is the latest in the list of Finance Ministers whose logic of economic management follows a similar NIA framework. Even in a context of deepening crisis, he has not even attempted to imagine anything different from this strategy which has been used over and over with similar disappointing results in Zimbabwe’s Economic History. His methods are rather too orthodox for a very unorthodox economy.

In an economy where there is over 90 percent unemployment, under military rule, governed through patronage and violence, his policies which are designed for an industrialised country based on a strong export based capacity, with a strong formal economy and near-democratic institutions and systems can never work in a Zimbabwean context. The artificial separation between politics and economics and the fiction that politicians can focus on the politics while the technocrats work on the economy is a false dichotomy. Even in the 1980s, corruption, patronage and the heavy financial costs of pursing the Gukurahundi massacre not only cost human lives and caused untold suffering and a divisive legacy but also placed a heavy burden on the fiscus. Putting the technocratic that Mthuli appears to be will not turn around the Zimbabwean economy whose desperation for foreign investment and legitimacy lies in tatters following the post-election August 1 deaths and the fuel protests and were repressed through violence and mass incarceration of opposition Members of Parliament, Civil Society individuals such as Evan Mawarire and more than 1000 youths.

It’s not a political problem; it’s a structural problem

This paper suggests that while there is a deepening political crisis in Zimbabwe, and that even if the political challenges are at the heart of the worsening economic problems, these have concealed an even deeper structural complication that makes it difficult for African governments in general to manage their economies optimally. Even under the best of circumstances; where the politics is not quite as tainted, in contexts where even investment is available, African economies have other international, historical and legacy impediments that need to be confronted before they can make that turn.

Those African economies that have sustained their countries have tended to be rentier states such as Libya, Botswana among others. It is often unsurprising that those without these minerals to base their economies on tend to perform badly. But there are opportunities to rethink African economics within its own context. There are also no shortage of example in global economic history from which to take, at the very least, only the right lessons as in the case of the Asian tigers. And by the right lessons, I mean only those that are applicable to the context, the rest is up to us.

While African technocrats are still pursuing dead approaches to economic management, the rest of the world is moving on. There has been a recent global resurgence in interest of African Economic History asking that crucial question: ‘Why are we so poor’? This group of diverse international scholars have a number of programmes looking into the economic history of the continent to find answers to this question. Ironically, Zimbabwe was the only country on the continent that has a had a fully functional and sustained Department of Economic History at the University of Zimbabwe where these questions have been studied for decades and an amazing group of scholars and students have been produced there.  Yet the state has made no use of the intellectual capital produced there.

Also, there is a big global shift that has prompted a rethinking of economics globally and a movement spearheaded by the Institute of New Economic Thinking (INET) to investigate these issues. The Africa Working Group and the Economic Development Working Groups of INET’s Young Scholars’ Initiative is taking the question of the challenges of Africa to the world. Ironically, Zimbabwean Economic History scholars have been leading lights in this regard, hosting workshops, conferences and plenaries in Zimbabwe and abroad where economic question about the Zimbabwean economic history and recent crisis have been tackled. But these are just two of the numerous organisations in which many bright young Zimbabweans and other scholars have examined the challenges facing Zimbabwe, at least from an academic perspective. I suppose certain state apparatus, probably not the right ones are watching, but who is listening?

What has been consistent in all these studies is that the ways in which economics is done officially in this country is highly problematic. Certainly, Ncube’s approach to the economy exposes a deep ignorance of crucial structural, political and historical antecedents to the enduring crisis. If he cannot diagnose the problem, how does he and the cabinet he works  for, which is clearly  in discoordination, expect to solve it? His highly orthodox and neo-liberal solutions are in fact part of the original problem.

Part of diagnosing the problem, at least from an economic history perspective lies in what I have just touched on. There is a whole movement of scholars re-examining these approaches and their effects on African economies, including Zimbabwean scholars, yet our technocrats appear to be completely oblivious to them. Yes, there are serious political problems in the country, and this is well known and documented. But a more holistic approach to the problems should also incorporate these economic history elements that I have begun to allude to in this piece and begin to ask serious questions about what an economy was, is and can be in the Zimbabwean context and move away from assuming what we think it is based on orthodox neo-classical perspectives that are not fit for purpose in a very complicated, problematic Zimbabwean context.

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