Structural transformation an imperative

By The Standard and Newsday | Dec. 15, 2021 | 6 Min read

That has to change and be transformed. That transformation cannot come from trying to fix an old and broken socio-economic system, we have to dare to radically transform our economy into an inclusive modern industrialised State and this requires a new mindset and a totally new approach. We have to reinvent and re-imagine Zimbabwe.

Vince Musewe WHATEVER has happened up to this day since 1980 has resulted in an economy which cannot meet the social and economic needs of Zimbabweans.

Radical economic structural ransformation (Rest), is an idea which seeks to fundamentally transform the Zimbabwean economy from an economic architecture which was perceived, designed and created by the colonialist and subsequently never transformed to meet the growing needs of the majority of ordinary Zimbabwean citizens, who to this day remain poor and are in fact economically and socially worse off.

We cannot sustain our country on primary products which make about 80% of our exports, nor can we continue to consume imports made elsewhere at the expense of local production, jobs and incomes.

We cannot continue to wax lyrical about our resource endowments while we do nothing about them and continue to invite foreign companies to come and extract them and repatriate profits made while exporting them in raw form to be value-added elsewhere, thus exporting potential jobs and incomes from value addition and selling those products back to us at a value tenfold if not a hundred fold.

We cannot fail to feed ourselves and continue to import food while we possess vast tracts of arable land and water facilities and the necessary expertise.

We cannot accept or depend on other country’s currencies and expect increased local economic activity, self-determination and economic sovereignty as a country.

We cannot continue to only talk and not act on harnessing the prodigious talent and skills base of Zimbabweans in the diaspora who have gained valuable technical experience and exposure in functional developed economies.

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No, we cannot continue to depend on the generosity and whims of other nations whose motives we falsely assume are for our benefit and yet they derive more from “helping” us.

We cannot continue to continually blame exogenous factors for our failures and thereby disempower ourselves psychologically from taking action and creating the social and economic circumstances we desire

We are not a poor country, Zimbabwe has everything it needs to create a new modern industrialised economy which more than meets the ambitions, aspirations and needs of all its citizens.

The key objectives of Rest are therefore as follows:

to utilise our mineral resource base to create own capital which can in turn be deployed for rapid industrialisation and modernisation;
to fundamentally transform the structure of our economy and GDP so that at least 50% of it emanates from manufacturing and services thus creating high wage skilled jobs and better quality lives;
to significantly reduce primary product exports to a set minimum of export earnings;
to significantly reduce finished product imports and only import raw materials or inputs for local manufacture and value addition;
to generate adequate revenues for social welfare obligations, free education and free health services for the poor;
to upgrade economic and social infrastructures and create universal affordable access to the internet and ICT;
to embrace and adopt the 4th industrial revolution;
to ensure the majority of our energy sources are renewable;
to achieve complete and total devolution of economic power to provincial economies; and
l to focus on human capital development and preservation of the well-being of citizens as the only competitive advantage we can deliberately create.

In order to achieve this, we have to imagine the appropriate strategies and then have the appropriate institutional arrangements for effective implementation and lastly determine the required capital budget.

It was Ibbo Mandaza, who wrote on “the failure of Zimbabwe — to move beyond political rhetoric while basically relying on colonial institutional architecture inherited from the past is the key reason for our lack of progress.” He talks about “the failure to address the economic realm in favour of an obsession with the political kingdom.”

He is indeed correct to state that: “Zimbabwe has so far been unable to break out of this colonial economic grid lock and a resultant class structure in which the absence of an indigenous capitalist (national bourgeoisie) is so glaringly lacking and, therefore, depriving the national economy of an anchor class without which it is difficult to effect economic transformation.”

Rest is really about fundamentally transforming our economic structure so that it can produce different results. Without changing the structure of our economy, we are unlikely to meet the diverse and growing needs of our population.

Zimbabwe today is classified as a fragile State by the International Monetary Fund. A fragile State is defined as a country that cannot generate adequate income and is therefore unable to meet its day-to-day needs, it is dependent solely on primary exports whose prices can fluctuate significantly and often, has high debt levels, pervasive corruption, lack of transparency and non-accountability. Our current economic structure therefore produces fragility and must change.

We, therefore, need an urgent plan of action through which Zimbabweans, on the basis of a national leadership that cuts across all sectors and sections of the society, can begin to chart the way forward, taking advantage of the historical foundations of the nation, the enormous natural resources, a resourceful population that includes among the most skilled at home and in the diaspora, and a pivotal position, both geographically and geopolitically, in the sub-continent of Africa.

Our GDP reflects the totality of economic activity in the country which is creating value excluding the informal sector whose output is not measured. The first reality we must accept is that no country has ever created wealth through the production of primary goods alone without an industrial base.

Our current GDP comprises 12% agriculture, 26% mining and quarrying, construction 14%, tourism 6%, manufacturing is mere 2,8% and services being the remainder.

If we are to radically transform our economy this structure has to drastically change to focus on high value add economic activity while reducing the share of agriculture and mineral primary products.

We have to focus on manufacturing because it spurs technological advancement and innovation while creating high end skilled jobs meaning more wealth and incomes. In addition, the production and services linkages created by manufacturing are enormous.

Under Rest, it is proposed that we target manufacturing to be at least 30% of GDP within three years. This requires that we value add our primary products as a priority through agro-based industrialisation and the processing of our mineral products. It also requires that more financial resources must be allocated to manufacturing and industry in our national budget away from primary agriculture and mining.

A more aggressive re-industrialisation strategy is therefore necessary. Such a strategy must be driven by the private sector while government should provide the necessary policies to allow industrial infrastructure development to compliment.

Key to this re-industrialisation must be the adoption of the fourth industrial revolution concepts.

Ideas and technologies. It is fact that the industrial world is in the midst of a significant revolution regarding the way products are manufactured mainly due to the digitisation of the manufacturing process.

The fourth industrial revolution, or simply industry 4.0 (coined in 2011 by a German initiative of the federal government with universities and private companies), is currently occurring in manufacturing. We, therefore, need to take note of it and anticipate its potential impact on our developmental plans and prepare ourselves accordingly so that we are not left behind.

As we in Zimbabwe pursue our re-industrialisation it is critical that first, our leaders and experts are up to speed with the above developments and second, that our Ministries of Industry and Commerce, Education and ICT immediately set up a task force to advise on how we can incorporate and adopt Industry 4.0 technologies in our education sector and in our National Industrial Development plans. The future is digital.