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Business leaders who have been in the corporate world since 1980 have said Independence brought about an era of economic evolution, expansion and empowerment of the underprivileged majority. Soon after Independence each year had a theme; a year of development and progress and there was the five-year development plans.

Former Delta Corporation chief executive Mr Joe Mtizwa said there was excitement in the early 80s.

“In the early 80s the dramatic thing was that there was a great spirit of wanting to build a new nation, of pulling in one direction. There were no discordant voices then. There was incredible consensus, great excitement and great energy to work together. The world’s focus was on us.”

Interestingly also making the headlines in 1981 were the US views on Zimbabwe: “Zimbabwe could become the US’ Central Africa regional trade base depending on the long-term investment conditions that exist in the country. Lack of information on the political and economic situation could hamstring large-scale US investment and trade” (The Herald June 1981).

#Growth-with-equity

Fresh from independence in 1981, the Government followed the Growth with Equity plan whose main aim was to achieve a sustainable high rate of economic growth and speedy development in order to raise incomes and standards of living of the people.

Even then a Commission of Inquiry into the Incomes, Prices and Conditions of Service was set up headed by Roger C Riddell. The Commission promising a sound deal for workers came with a “Poor People’s Charter” which proposed sweeping changes designed to provide a minimum salary close to the Poverty Datum Line.

The Riddell Commission also suggested radical changes in urban transport with a flat fee for commuters travelling to work and back and a higher rate for people travelling for pleasure.

After that came the Transitional Development Plan in 1982 and the Five-Year National Development Plan in 1986, the second year of the Five-Year National Development Plan was abandoned in favour of the Economic Structural Adjustment Programme (ESAP) in 1991.

#Structural-adjustments-in-the-90s

Industrial Development Corporation of Zimbabwe chief executive Mr Mike Ndudzo who was the country’s first black Accountant-General said the first 10 years of independence were driven by a developmental and reconstruction agenda under ZIMCorD, centralised economic planning and control, which saw a rapid acceleration of infrastructure development funded by multilateral and bilateral sources and equally exponential increase in the secondary and tertiary school and education enrolment.

“This was, however, under an inward looking and controlled import substitution economic regime, which soon reached its growth threshold based on the domestic market, antiquated technology and inability to absorb the multitudes graduating from the mainly academic education system.”

Allied Timbers Chairman Mr Emmanuel Fundira who in 1983 was the deputy group internal auditor for the United Transport Group, said the first 10 years after Independence were encouraging.

“During the first 10 years, business was very buoyant and growth prospects were exponential,” said Mr Fundira.

“There was a lot of excitement in rebuilding the economy while the country received a low on inward investments.”

Bulawayo South Member of Parliament Mr Eddie Cross who was general manager of the then Dairy Marketing Board and later Cold Storage Commission in the early 80s said the 15 years just after Independence signalled an expansionary trajectory for the country.

“There was some stability in the economy then. However, the following 15 years after ESAP saw the country subjected to inflation and the economy started going towards a decline,” said Mr Cross.

OK Zimbabwe chief executive Mr Willard Zireva who was working at Manica Freight in 1981 said the situation in the retail space had more cause for concern than there was to celebrate in that most rural supermarkets had made way for large retailers.

He said whereas Zimbabwe used to have many indigenous owned supermarkets at Independence; most such operators had since disappeared. The retailers used to thrive in the rural areas where growth points also grew fast.

“We used to have greater participation by indigenous people, but most have gone down because of what happened in the economy since 2007. The meltdown destroyed most rural businesses, little is happening there now.

“They have all gone down, we have lost that whole community, the space is now dominated by big businesses, small ones have been forced out. Previously, big businesses never controlled 50 percent of the space.

“The small businesses have been destroyed because of what happened in the economy, not because they were taken over by big guys. We now have more foreign supermarkets than at independence in 1980.”

ESAP was implemented to boost growth and create jobs. Then the issue was the removal of subsidies and the decontrol of prices to free up the market. International capital funded the programme. However what would bring about sustainable economic growth even at that time was restraint on expenditure and bringing the budget deficit down by directing spending to capital rather than recurrent expenditure. Again those are still the same problems government is facing now.

The then chairman of TA Holdings the late Ariston Chambati said government had embarked on ESAP when the economy was still in reasonable and manageable shape while IDC’s Mr Ndudzo said the second ten years were mainly liberalization of trade under ESAP.

“Unfortunately without a development and  effective export promotion and value addition agenda, which saw those with the means importing luxuries and trinkets and the foreign debt stock soaring without much to show for it, while  industry started to show strain from imported competition from better equipped foreign firms, thus closing and formal employment starting to decline,” said Mr Ndudzo.

#Vision-2020

After that there was Zimprest in 1996, Vision 2020 in 1999 after the devaluation of the Zimbabwe dollar in November 1997 and the Millennium Economic Recovery Programme (MERP) in 2000.

After the turn of the millennium various economic plans were followed but the harsh decade which was also characterised by the effects of the illegal sanctions placed on the country by the west had already started which was to lead to the hyperinflation era in 2007-2008.
Mr Ndudzo said since 1997, the Government responded to the failures of ESAP with empowerment of the broad based majority through access to land under the land reform programme .“    But unfortunately, the West reacted to this by imposing sanctions which restricted access to multilateral and bilateral aid and  development finance inflows and strangled the nascent new farmers who were poorly equipped, trained and funded to raise their productivity and yields to competitive levels and some ended heavily indebted and bankrupted.”

Mr Ndudzo said the fiscal pressures and loss of skills to the Diaspora all combined to put the economy under severe pressure, hence the spiraling prices on the few goods available and low productivity that ensured , made worse by price controls and other measures taken in good faith but that were not the most appropriate, like expanding money supply without the underlying productivity.

“Hence hyperinflation and burning and speculation that ensured.  With multicurrency or dollarization as the only option to curb this, local industry lost all retained earnings and found itself borrowing in a strong currency, at a time of cheap imports and porous borders and even outright dumping, with an uncompetitive cost structure , of utilities and inflexible labour laws, which made variable costs fixed, and a very negative country and risk perception  from domestic and foreign investors, shortermism.

The IDC boss who has been at the company since 1991 said as a result there was a decline in capacity utilization below break even in some cases with high unit costs or, low economies of scale and high nonperforming loans, with surviving Executives spending disproportionate time , cost and effort engaging and negotiating with irate creditors, bankers and workers owed arrear salaries, and thus further cases of judicial management and liquidations and a high level of anxiety and stress across the social spectrum.

The hyperinflation era led to dollarisation from 2009 to date. “The dollarisation of the economy has however made things difficult for many companies and that can be substantiated by the number of companies that have closed or retrenching,” said Mr Cross.

#The-new-economy-emerging

While a lot of workers had seemingly been thrust into joblessness as a result of shrinking formal sector, there has been a substantial redistribution of wealth from big business to small business, thereby empowering previously un-empowered workers.

Traditional big entities have been replaced by SME’s, informal traders and small scale commercial farming in agriculture, mining, retail, manufacturing and construction.

Economists believe that the emergence of a robust SMEs and informal sector was a step forward in Zimbabwe’s quest for sovereignty, self determination and buffer to shield it from the sometimes devastating impact of global economic dynamics.

Huge foreign conglomerates usually take different positions and strategies at the slightest seismic shift in the global economic trends and order and highly sensitive to geopolitical tensions even the ones that have nothing to do with a particular nation.

Mr Zireva pointed out that the retail space in urban areas had also been changed and was now dominated by big foreign entities such as Pick ‘n Pay and Choppies with only OK Zimbabwe a truly indigenous large operator.

Mr Zireva said a few indigenous owned retailers survive today in the retail sector in urban and rural areas than the period soon after independence after they were taken out of business by sanctions induced difficulties.

Economist Dr Stanley Mahlahla who was head of Economic Planning in the Ministry of Finance in the early eighties said the “transition” was common with developing countries.

“Just look at the shift from few commercial tobacco farmers to thousands small scale farmers,” said Dr Mahlahla. “Countries such as India and Brazil have gone through similar process. However, this does not mean the economy will be driven by small scale companies forever. But big companies will also re-emerge. Take Brazil for instance, it is now building planes but it’s informal and SME sectors remains critical.

“What the Government needs to do is to probably conduct study on how countries such as India and those in South America are getting revenue from the informal sector.”

He also noted that Zimbabwean economy was modeled in a similar way as European economies and was now adjusting to follow the trends in developing economies.

#Change-in-attitude

Mr Mtizwa however noted that the country was no longer pulling in the same direction.

“One doesn’t find the same consensus now as was at Independence. There’s a great deal of pulling in different directions. We have lost the energy that was pulsating through the national veins of the country. We have lost that dynamism, sense of energy and urgency.
“I don’t see it anymore. The rallying call then was focus on solving a common problem- that of educating the majority- and this made all the difference.

“The investment in human capital, in primary and secondary education, tertiary and universities and this made it easy for everyone to join the bandwagon. The results speak for themselves.

“That spirit of working together arose to address that problem. The challenge is how to get the products of the investment in education working.

“That’s the tremendous rallying call that we should work on. No one can politicize about that. It’s a national issue,” he emphasised.

Mr Cross is however optimistic:  “Despite all the hardships that the economy has faced, there is still hope that in the next twelve months there is expected revival in different sectors of the economy.

“If good policies are implemented there is no doubt that Zimbabwe is a sleeping economic giant and in the next five years Zimbabwe will be among the best economies in Africa,” said Mr Cross.