Introduction 

Poverty has various manifestations, including lack of income and productive resources sufficient to ensure sustainable livelihoods; hunger and malnutrition, ill health, limited or lack of access to education and other basic services; increased morbidity and mortality from illness; homelessness and inadequate housing; unsafe environments; and social discrimination and exclusion.  It is also characterised by a lack of participation in decision-making and in civil, social and cultural life. 

Poverty is inseparably linked to lack of control over resources, including land, skills, knowledge, capital and social connections.  Without those resources, people are easily neglected by policy makers and have limited access to institutions, markets, employment and public services. The eradication of poverty cannot therefore be accomplished through anti-poverty programmes alone but will require democratic participation and changes in economic structures in order to ensure equitable distribution of wealth and income, to provide social protection for those who cannot support themselves, and to assist people confronted by unforeseen catastrophe, whether individuals or collective, natural, social or technological.¹ 

Finally, the principle that rulers are chosen by and accountable to the people implies that democracy is government by the consent of the governed, who must approve not only the rules by which they are administered, but also the rules themselves, as well as the policies the latter will implement.  Here is where the notion of accountability comes in:  that rules are accountable to the people for their acts.² 

Historical Background of Poverty in Zimbabwe 

Poverty in Zimbabwe is closely linked to the country’s history.  The pre-independence social, economic and political climate tended to bestow economic and political benefits on whites as opposed to blacks.  Blacks were settled on poor quality and small portions of land whilst whites occupied vast tracts of fertile land.  Blacks were denied equal education and employment opportunities and even salaries for the same job differed with race.  These policies introduced great inequalities and also perpetuated poverty among blacks. 

A prolonged liberation struggle from the mid 1960’s led to independence in 1980.  The war had adverse effects on the entire population and the resulting economic hardships were felt most severely in rural areas.  The imposition of sanctions on the then Rhodesian regime affected the entire country including the poor.³ 

At independence, one of the major challenges was that of redressing the inequalities of the past, as mentioned above.  This was done through the adoption of welfarist policies, influenced by the socialist convictions of ZANU-PF.  With “growth with equity” as a major objective, accent was placed on education, health, rehabilitation of the war raged infrastructure, removing discriminatory laws and promoting the advancement of women, and the resettlement of the landless people.  The other major area of policy emphasis was agricultural production which led to sustained agricultural production by the peasant and small scale sector.  The first 10 years of independence witnessed remarkable progress in redressing social imbalances, and laid a foundation for a sound human resources development policy.  Nevertheless, the economic policy operated on a regime of controls and regulations, which was exacerbated by the monopolistic nature of the economy.  Development and growth were thus sluggish, unemployment levels rose, and balance of payments problems became intractable.  Climatic factors, particularly drought, added a thorn in the flesh, especially in 1992.⁴ 

Imbalance between central government expenditure and revenue compromised the sustainability of the spending programme.  Central government expenditure as a share of the national economy was always high international standards, and revenue fall short of expenditure through the 1980s.  At independence central government expenditure accounted for about 35 percent of GDP, and partially due to the social sector investment of the 1980s, this share rose 47.4 percent by 1988/89.  The gap between expenditure and revenue grew throughout the 1980s, and interest payments on the national debt began to consume greater share of the government budget.  Budget deficits also crowded out private investment and created inflationary pressures. 

The policies of the 1980s were also conducive to sustained economic growth, and the Zimbabwean economy began to stagnate in the mid to late 1980s.  Government recognised the need for a strong economy the could provide resources necessary to combat poverty and redress the imbalances of the past.  As a result of deteriorating economic growth, high inflation rate, high levels of unemployment, and increasing fiscal budget deficits, Zimbabwean authorities fell under pressure to abandon the interventionist policies of the early – 1980s in pursuit of market-oriented reforms.⁵ 

ESAP: The More to Economic Reform 

When Zimbabwe embarked on its Economic and Structural Adjustment Program – Commonly know in ESAP – in 1991, the decision came from the recognition that main constraints to growth were the low levels of investment, and the administrative management of the economy inherited from the UDI period, reinforced by the socialist experiment of the 80s.  The government approached the World Bank, IMF and other donors for financial support for ESAP.  The support was forthcoming, although it was conditional on the implementation required.  The key policy elements incorporated in ESAP covered the usual five principle categories of reforms: 

q       Fiscal and monetary policy reforms, including budgetary and monetary stabilisation measures, and the liberalisation and deregulation of banking and finance.

q       Trade Liberalisation, including the abolition of quantitative controls and the reduction and harmonisation of tariffs and duties.

q       Deregulation of prices, wages, interest rates and exchanges rates.

q       Public sector restructuring, entailing the downsizing of the civil service and the reorganisation and commercialisation of parastatals.

q       A social safety net in the form of Social Development Fund (SDF) for those vulnerable to the adverse effects of structural adjustment.⁶ 

Critics of the IMF and the World Bank in Zimbabwe claimed that these guidelines were intended not to benefit the implementing country but to guarantee that these two institutions could recover money loaned to the Third World.

Responding to these criticisms, Zimbabwe’s then Finance Minister Bernard Chidzero made an unprecedented move by unveiling, along with the country’s 1990 budget, an economic policy statement he called a “home grown” structural adjustment programme that the government had been developing for two years.  Dr. Chidzero announced major changes to the rigidly controlled economy that Zimbabwe inherited at independence as part of its professed socialist agenda.  The new Economic Reform Program was supposed to guide Zimbabwe away from socialist, central control, towards a market-oriented and less regulated economy. 

On April, 1991 the issue of The Peoples Voice (a mouthpiece of the ruling party – ZANUPF) called this shift a decision to alleviate the constraints that had strapped the Zimbabwe economy since independence in 1980. 

Zimbabwe’s industrialists generally welcomed the trade liberalisation plan; especially since it was supposed to make more foreign currency available to them for importing badly-needed equipment and spare parts, thus improving the efficiency and quality of manufacturing.  Advocates of this approach said it should make Zimbabwe’s product more competitive on export markets, earn more foreign exchange for Zimbabwe and create new economic growth and jobs. 

Not all Zimbabweans were pleased with this shift.  The Zimbabwe Congress of Trade Unions (ZCTU) doubted that Zimbabwe could become a proverbial “miracle” country where reforms could succeed.  It pointed out that in a country where 4 percent of the population owned 90 percent of the wealth, market approaches would concentrate more wealth in a few hands, thereby making the rich richer and the poor poorer.⁷ 

According to the World Bank, the reforms under ESAP could hardly be regarded as roaring success.  They did lead to a marked improvement in investment and savings levels as a percent of national income.  The economy became much more outward oriented, and exports increased substantially.  Private sector profitability grew – principally in agriculture, tourism and transport – and the informal sector had a strong boost.  However, fiscal and monetary stability remained elusive and the standard of living declined for many, particularly urban households, with the percentage of households classified a spoor rising from 40 percent in 1991 to over 60 percent in 1995.  Unemployment continued its relentless rise.  Little progress was made in land reform.  The considerable achievements in health and education made during the first decade after independence also came under threat, with the brunt of the fall in public expenditure being borne by the social sectors. 

The World Bank admits that from the broader perspective of poverty and human development the programme design of ESAP itself was flawed, particularly in the underestimation of its social consequences.  The introduction of the Social Development Fund, though a noble step, did not provide adequate social security against rising costs brought by the decontrol of prices of basic commodities and cost recovery measures in health and education in the face of falling real incomes.  The massive retrenchments which resulted in a large number losing their jobs in an economy where employment growth was slowing down cannot be ignored. 

ZIMPREST:  The Second Generation of Reforms 

Zimbabwe Programme of Economic and Social Transformation – commonly known as a ZIMPREST – which was launched in 1997 aimed at correcting the deficiencies of ESAP.  While the fundamental thrust of controls remains the pillar of the strategy, ZIMPREST placed great emphasis on social development. It envisaged a comprehensive restructuring of government so that it cold achieve an efficient delivery of key services and better facilitate economic empowerment, private sector development and job creation.  Many of the polices outlined in ZIMPREST were designed to tackle poverty directly through, for example, land reform, indigenisation, direct poverty alleviation, fostering small-scale enterprises and a national AIDS strategy.  None of these were central to ESAP, which was predicated perhaps too much on the belief that “getting the prices right” would generate employment thereby reducing poverty. 

Unfortunately, just as these “second generation” of structural reforms were being launched, Zimbabwe found itself in the throes of broad and unprecedented economic difficulties.  The severity of these difficulties is best illustrated by the depreciation of the exchange rate from 12 Zimbabwe dollars per United States dollar in October 1997 to the current level of 38 Zimbabwe dollars, and the current inflation rate of over 50 percent.  The trigger was a series of internal and external shocks that intensified the pressure on the balance of payment and buttered business confidence.  The effects have spread throughout the economy, with once more the poorer segments of the population bearing the brunt of the burden. 

The Government’s initial response was to tighten monetary and fiscal policy, and to restore some stability in the foreign exchange market through tariff surcharges on imports and measures to better regulate foreign exchange trading and reduce speculation.  And to minimise the impact on the poor, the Government intervened to moderate increases in the prices of basic commodities.  However, these measures were far from sufficient to prevent a continued deterioration of the economic and social conditions. A much more comprehensive set of measures was required to get ZIMPREST back on track and to restore public confidence.⁸ 

Zimbabwe Millennium Economic Recovery Programme 

The document, which was released in February this year, is expected to steer the country towards restoring economic stability.  The Programme aims to remove the fundamental causes of inflation, restore macro-economic stability, create an environment conducive to low interest rates, bring about stable incomes and reduce poverty among the masses. 

The major objectives of the programme are to:

¨      consolidate fiscal adjustment policies;

¨      accelerate and complete the public enterprise reforms;

¨      stabilise prices at lower levels;

¨      lower interests rates;

¨      stabilise the value of the Zimbabwe dollar and resolve the foreign currency crisis;

¨      deepen financial sector reforms;

¨      stimulate the growth of productive sectors and build confidence;

¨      protect vulnerable social groups;

¨      establishment of implementation, accountability and monitoring institutions.⁹ 

For some time, government intimated an intent, to introduce a new economic programme, replacing the virtually discarded ZIMPREST, and finally in February, it unveiled its Millennium Economic Recovery Programme.  First reactions were that, hopefully, although the Millennium actually only occurs at the end of this year, and not on last New Year, Zimbabwe would not have to wait for 2001 before the programme was activated. 

With a sense of desperation prevailing throughout Zimbabwe, the need for positive, swift action towards uplifting the economy was, and is, critical, but one again government seems to be devoid of any sense of urgency. 

Distracted by the unexpected negative vote in the Constitutional Referendum, and further distracted by a justifiable fear of defeat in the forthcoming elections, government gave no attention to the actual implementation of the Millennium Economic Recovery Programme, and continues to decline. 

Key elements of the programme are the talked about and promised, but never deliver fiscal disciplines which together with the equally unduly delayed comprehensive privatisation of parastatals would radically lower the national deficit to sustainable levels, and the facilitation of first-time entrepreneurial initiatives. 

If those two elements of the programme are not assertively present, then the reminder of the programme has no prospect of success.  Although there are many contributors to inflation, one of the greatest in excessive state expenditure.  Lowering the expenditure can set inflation upon a considerable downward slide.  That would, in turn, initiate reductions in interest rates, partially restoring viability to many business, and making investment possible. 

Reduced inflation can contribute to recovery of export competitiveness, which would lead to greater foreign currency inflows, as would a re-establishment of an investment-friendly and incentivised environment. 

All these factors would aid attainment of aspirations of the economically ambitious but as yet not enabled, and would occasion employment creation. 

But, even if the programme would now, belatedly, be implemented in all its elements without reservation, it cannot succeed unless government restores the rule of law, discontinues its racial vitriol which is in breach of the constitution and of the national interest, ceases to look for scapegoats but instead allowed its errors to be guidelines to more effective future paths, and discontinues using threats of regulation and control against the private sector but, instead, collaborates and interacts with it.¹⁰ 

Conclusion and the Way Forward 

Since Independence, Zimbabwe’s political scene has largely been dominated by the Zimbabwe African National Union (ZANU-PF) particularly after the merger of the two major political parties, ZANU (PF) and ZAPU (PF).  In the economic sphere the focus of policy during the 1980s was on a large public expenditure programme aimed to redress some of the worst social inequalities inherited at independence.  The programme made great strides in expanding health, education and safe water access to the general population, but became difficult to sustain in the face of declining economic performance. 

From the late 1980s and particularly in the 1990s there has been growing concern expressed by students, the labour movements, intellectuals and opposition parties over issues ranging from the defacto one-party rule, corruption and lack of accountability, to taxation and constitutional reform.  The crisis has been worsened by the increasing poverty levels particularly since the launch of the Economic Structural Adjustment Programme in 1991.¹¹ 

Zimbabwe has a way out of this as it moves into the third decade of its independence.  Zimbabwe’s leadership, during its struggle for independence, put its faith in the people against all external odds.  Is sustained this faith for a few years after independence, and rewarded the people with education and health services that were denied to them by the previous regime as well as opening up the possibility of improving their material well being.  Admittedly, it adopted an attitude to the people that was still top-down rather than bottom-up, but it created the necessary political and economic space for the people to consolidate the gains of independence.  However, as soon as there was a mild balance of payments crisis in the early years, there was a shift towards uncontrolled liberalism, further enhanced by tensions and hesitations in policy implementation.  This was accented by increased dependency on donor support.  Over no other issue were hesitations so costly as over the land question.¹² 

Most institutions still have strong colonial structures are not capable of responding to new socio-economic and cultural demands.  The majority of these institutions are staffed with persons with inappropriate skills, which results in misallocation and inefficient use of resources.  Central government institutions still emphasis control and are sectorally structured.  This has led to confusion, duplication and ultimately, inefficiency.  Decentralisation of government institutions has been primarily political; provincial, district, ward and village level structures have no powers in terms of the planning and allocation of resources. 

Clearly, the way forward is far more effective decentralisation that provides for greater participation by beneficiaries and encourages consensus building. 

Decentralisation alone will not lead to effective economic management and eradication of poverty unless the local level institutions themselves are strengthened.  Appropriate training and extension packages, backed by research, will have to be developed.  Information dissemination must be coupled with training and extension in rural areas. 

At the national level it is becoming accepted that local problems are best solved at the local level and that if  “local” institutions are strengthened then information can flow as well as downwards.  This principle applies to coordination between national and international institutions as well. 

Lastly, an area of serious deficiency is that relating to policy formulation and reform.  The institutional mechanisms for bringing about policy reform and implementation are weak.  The institutions have tended to rely on control and regulatory tools to “manage” the economy, neglecting the need to introduce incentives and/or disincentives to influence sound economic management.  Any transformation of the existing institutional bottlenecks will require political will and administrative commitment backed by significant levels of investment.¹³

End Notes 

1.                  See The Copenhagen Declaration and Programme of Action – World Summit for social Development, 6-12 March 1995 pp57-58. 

2.                  Nzongola-Ntalaja, G. “The State and Democracy in Africa” in Nzongola-Ntalaja, G and Lee, M.C. The State and Democracy in Africa. AAPS Books, Harare, 1997, p14. 

3.                  Central Statistical Office (SCO), Government of Zimbabwe, Harare, July 1998, pp1-2. 

4.                  Rukobo, A.M. “Structural Adjustment and Poverty Alleviation Strategies in Zimbabwe”, Institute of Development Economies (IDE), Tokoyo, 1007, 1997, pp18-19. 

5.                  Central Statistical Office, op. cit. p2. 

6.                  Allen. T.W. “Structural Adjustment in Zimbabwe: The World Bank Perspective”, Harare, September 2, 1999, pp3-4. 

7.                  Chimanikire, D.P., “Zimbabwe and Trade Liberalisation”, Peace Review, Winter 1991-92 California, pp49-51. 

8.                  Allen, op cit. P4. 

9.                  The Herald; Harare, April 20, 2000, p9. 

10.              “Zimbabwe Independent”, Harare, April 20, 2000, p14. 

11.              See Zimbabwe Human Development Report, 1998, p6. 

12.              See Zimbabwe Human Development Report, 1999, p80. 

13.              Moyo, S and Katerere, Y. “Environmentally Sustainable Development in Zimbabwe”, in United Nations Non-Governmental Liaison Service (NHLS), Voices from Africa, No. 5, Sustainable Development, Geneva, June 1994, pp59-60.

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