SOON after Independence in 1980, Julius Nyerere the late founding president of Tanzania, on a visit to Zimbabwe said to Robert Mugabe, who was then the prime minister, “My friend, you have inherited a jewel, do not tarnish it.”
Ceteris Paribus:Eben mabunda
Something happened to that “jewel” and it lost its lustre. The big question is, how can we get this “jewel” to sparkle again? Could the resuscitation of agriculture be the key to Zimbabwe’s economic recovery? Formerly dubbed the “breadbasket of Africa” for a thriving economy that was hinged on its agricultural fortunes, Zimbabwe has over the last two decades plummeted to a basket case. Since 1965, agriculture contributed an average of 15% to the nation’s GDP with a high of 22% in 1967 and a low of 7% in the historic severe drought year of 1992. The 2018 contribution came in at a meagre 8%, a year in which the national GDP grew by a mere 2%.
Based on historical prognosis, agriculture is an anchor sector for the economy, and its outturn often mirrors downstream in the manufacturing sector, whose dependence on agriculture is quite high. A historical snapshot of the stats would reveal: In 2002, agricultural output receded by -23%, GDP slumping -4,8%, while the manufacturing sector grew by just 1,2%.
Comparatively, in 1996 as the sector had recovered from the effects of the 1992 drought, the agricultural sector surged 21%, while the GDP reflected a 7% growth with a corresponding 4% increase in the manufacturing sector growth rate.
Zimbabwe’s trade deficit has averaged north of US$2 billion annually since dollarisation with a growing import bill due to the country’s propensity to import. A significant portion of the imports are agricultural and these include wheat, maize, and soya. Looking back, the land question sooner or later needed to be addressed. However, not in the hasty and chaotic manner it was handled, whose net effect has been the destruction of agricultural activity in the country.
Zimbabwe requires over 400 000 metric tonnes of wheat annually to service the 1,4 million loaves demanded locally daily. Sadly national output of wheat is at 50% of the figure with the balance having to be imported. Soya bean annual requirements also come in at 400 000 tonnes but the output falls below the 50% mark, requiring imports to fill the gap. Furthermore, the country demands 120 million litres of milk per annum. National output sits at 79 million litres; the balance is serviced by monthly imports of over US$20 million per month from South Africa.
There is no country in the history of modern states that has built a great economy through mining and the export of raw minerals. Mining requires careful planning and the establishment of linkages with other sectors of the economy, that is, agriculture, manufacturing, banking, and finance.
In the recently launched National Development Strategy 1, the Government seeks to improve food self-sufficiency from the current 45% to 100%, as well as reduce food insecurity from the current peak of 59% to fewer than 10% by 2025. The agriculture sector is expected to be one of the key sectors expected to anchor economic growth of over 5% per annum for the next five years through resolving the security of tenure on the land to attract investment. The sector is envisaged to attain a growth rate of 11,3%, 8,9%, 7,6%, 9,5% and 10,4% in 2021, 2022, 2023, 2024 and 2025 respectively.
A more deliberate approach must be embarked on by both government and the private sector in capacitating farming activities to achieve the set targets. Clearly, “command agriculture” has failed, marred by misallocation of inputs, nepotism, and allegedly unaccounted funds. The land tenure system must be reviewed to allow more private sector involvement. This would cut the nation’s import bill, in an economy that is battered by persisting forex shortages and near-empty foreign currency reserves at the central bank. The mining sector has contributed over 40% of the nation’s forex receipts over the past five years, outdoing all other sectors in 2019. The government has even set an ambitious target of US$12 billion for the local mining sector by 2023. While the mining sector has enormous growth potential, its progress also hinges on the agricultural sector.
Mabunda is an analyst and TV anchor at Equity Axis, a leading Financial Research firm in Zimbabwe. — email@example.com