MORE than a quarter of a century into the Sustainable Development Goals (SDGs), the world remains off-track to meet its most fundamental promise: ending poverty and leaving no one behind.
While economic growth has lifted millions out of destitution, it has also proven brittle, bypassing the most vulnerable — the people with disabilities, the elderly, the unemployed and those in informal work — who are often the first to be crushed by economic shocks, climate disasters, or pandemics. It is here that social protection emerges not as a charitable expense, but as a structural
From a macro-economic standpoint, social protection is not a welfare cost or charitable transfer. It is a productive investment in human capital, aggregate demand stabilisation and long-term growth.
For a dualistic, resource-rich but structurally vulnerable economy such as Zimbabwe — characterised by an informal sector employing over 85% of the labour force, chronic exposure to climate shocks and limited fiscal space — the absence of robust social protection amplifies output volatility, entrenches poverty traps and undermines the productivity of future workers.
Zimbabwe is currently experiencing a rise in mineral revenues from gold, platinum, lithium and diamonds. This offers a rare historical window. Without a deliberate fiscal mechanism to channel these resource rents into social protection, the country will likely repeat past mistakes: pro-cyclical spending, Dutch disease and elite capture. With the right framework, however, mineral wealth can become the foundation of a counter-cyclical, inclusive and economically efficient social protection system.
Colonial era: Segregated safety nets
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Under colonial Rhodesia, mineral revenues (gold, asbestos, chrome) financed railways, power infrastructure and urban industrial development. However, social protection was racially segregated.
The British settlers had access to old-age pensions, unemployment insurance and workers’ compensation. Africans received only destitute relief — a punitive, discretionary system designed to force labour into mines and commercial farms.
Economically, this created a labour reserve economy where African households absorbed shocks privately through remittances, informal borrowing and child labour. The result was a high marginal propensity to consume out of transitory income among African households — an inefficient outcome for aggregate savings and investment.
Post-Independence: Volatility, erosion
After 1980, Zimbabwe expanded education, health and public works programmes.
The 1990s Economic Structural Adjustment Programme (Esap), however, removed food subsidies and retrenched public sector employment. Poverty became highly elastic to GDP shocks. The hyperinflationary episode of 2000-2008 destroyed any formal social registry; households relied entirely on remittances, which are pro-cyclical — they fall precisely when needed most.
The 2013 constitution recognised economic and social rights (Sections 28–30), but fiscal space remained constrained.
The Harmonised Social Cash Transfer (HSCT) programme, though well-targeted, reaches less than 5% of poor households. Climate shocks (droughts, Cyclone Idai) repeatedly overwhelm ad hoc humanitarian appeals.
Current resource opportunity
Zimbabwe now sits on significant mineral reserves: the Arcadia lithium deposit (one of the world’s largest), the Great Dyke’s platinum group metals and mature gold fields. Global energy transition demand for lithium and green metals suggests a multi-decade revenue stream.
Without a strong social protection framework, these revenues become pro-cyclical — government spending during commodity booms and cuts during busts. This exacerbates the Dutch disease effect: resource inflows appreciate the real exchange rate, de-industrialising tradable sectors such as agriculture and manufacturing. Social protection can break this cycle by acting as an automatic stabiliser.
Country case examples
Botswana: Diamonds as a stabilisation fund
Botswana (1976-present) provides the most cited success. Diamond royalties were not spent immediately. Instead, the government created a Sovereign Wealth Fund (Pula Fund) and a parallel social protection system.
The “Ipelegeng” public works programme employs thousands during drought years. Econometric studies show a fiscal multiplier of 1,4 for social transfers versus 0,6 for recurrent government consumption. Poverty fell from 59% to 16% over three decades, while the Gini coefficient improved from 0,61 to 0,53.
The key institutional design: a fiscal rule that saved a portion of mineral revenue in foreign assets and allocated a fixed share to a social protection budget line.
Namibia: Mining taxes funding universal pensions
Namibia’s old-age pension, funded largely by mining taxes and Southern African Customs Union revenues, reaches virtually all citizens over 60. Economic impact studies found that the pension increased household savings rates by 11 percentage points and reduced child labour elasticities significantly.
The marginal propensity to consume locally is 0,78, meaning most pension income is spent on food, housing, and local trade — boosting small-town GDP. For Zimbabwe, which has a similar demographic and labour market structure, this model is directly relevant.
Ghana: Mineral royalties for health insurance
Ghana’s Mineral Development Fund Act (2014) allocates 20% of mineral royalties to the National Health Insurance Scheme. This financed coverage expansion to over 12 million people.
The economic outcome: a 40% reduction in out-of-pocket health expenditures, which increased labour productivity by reducing sick days and catastrophic health payments.
For Zimbabwe, where health shocks are the leading cause of household descent into poverty, a mineral-linked health financing mechanism is economically efficient.
Practical economic steps for Zim
Establish a mineral-stabilised social protection fund (MSPF): Legally ring-fence a percentage of annual mineral royalties into a separately managed MSPF. The fund should operate counter-cyclically: increase disbursements during droughts, recessions, or commodity price collapses; accumulate during booms. This transforms volatile resource revenues into predictable, stable transfers.
Expand the HSCT using mineral windfalls: Current HSCT coverage is less than 5% of the poorest households. Use mineral revenues to scale coverage to 20% within three years, prioritising informal sector workers and households with young children.
Introduce a resource-linked school feeding programme Mandate that large-scale mining operations contribute 0,5% of gross revenue to a national school meals trust. This reduces current household food expenditure by an estimated 12% for beneficiary families, freeing that income for productive investment in seeds, tools, or small enterprises. It also improves educational attainment, raising future labour productivity.
Public works as automatic stabilisers: Link the mineral trust fund to climate-indexed cash-for-work programmes. When rainfall data triggers an El Niño alert, automatically release funds to hire rural labour for reforestation, water harvesting and road maintenance. This counteracts the negative labour supply shock caused by drought (when farm employment collapses) and creates a multiplier effect through local wages.
Conclusion
Zimbabwe faces a binding inter-temporal choice. Without social protection, mineral wealth generates rent-seeking, volatility and a fragile labour force.
With a well-designed, resource-financed system, the country can smoothen consumption, raise the marginal productivity of the poor, reduce the elasticity of poverty to shocks and break the historical cycle of boom-and-bust destitution.
The stones beneath Zimbabwe’s feet have financed colonialism, survived hyperinflation and now promise a green energy future. The economics are clear: invest in people, or pay for instability later.
A mineral-financed social protection system is not charity. It is sound macro-economic policy.
Dzviti (nee Mapungwana) is a development economist, women economic empowerment and business analyst. These weekly New Horizon articles, published in the Zimbabwe Independent, are coordinated by Lovemore Kadenge, an independent consultant, managing consultant of Zawale Consultants (Pvt) Ltd, past president of the Zimbabwe Economics Society and past president of the Chartered Governance & Accountancy Institute in Zimbabwe. — kadenge.zes@gmail.com or mobile: +263 772 382 852.