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From despair to hope: Finding of the study on the state of the Zimbabwe economy and people’s survival strategies, 2009
Mass Public Opinion Institute (MPOI)
July 30, 2009

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Introduction

Zimbabwe’s development trajectory has been chequered since its attainment of Independence in1980. It country displayed great promise at first with real Gross Domestic Product (GDP) growth for 1980-1981 exceeded 20% and the economy grew on average by about 4.5% between 1980 and 1990. Then in the 1990s the country had a paradigm shift in its development path, having abandoned flirtations with some socialism and experimented half-heartedly, some would say with World Bank/International Monetary Fund supported Economic Structural Adjustment Programme (ESAP). This was also abandoned at the end of the 1990s, heralding “the deepening crisis period, 1997-2008”1. Post-2000 Zimbabwe marked a fundamental rupture with the preceding period and the country began its descent into what to many seemed a bottomless pit. For instance, GDP suffered a precipitous decline to -7.4 percent in 2000 and further declined to -10.4 percent in 2003. Real GDP growth averaged -5.9 percent between 2005 and 2007. Cumulatively, the national economy declined by 40% in eight years. Here is Wikipedia summarised the Zimbabwe economic situation earlier this year:

The economy of Zimbabwe is collapsing from economic mismanagement, resulting in 94% unemployment and hyperinflation. The economy poorly transitioned in recent years, deteriorating from one of Africa’s strongest economies to the world’s worst. Inflation has surpassed that of all other nations at over 80 sextillion (although it is impossible to calculate an accurate value), with the next highest in Ethiopia at 41%. It currently has the lowest GDP real growth rate in an independent country and 3rd in total (behind Palestinian territories)3.

In March 2009, the new government of national unity described the economy it inherited as follows:

At the epicentre of the economic crisis, have been unprecedented levels of hyperinflation, sustained period of negative Gross Domestic Product (GDP) growth rates, massive devaluation of the currency, low productive capacity, loss of jobs, food shortages, poverty, massive de-industrialisation and general despondency4.

Poverty levels skyrocketed from 55% of the population in 1995 to 72% in 2003 with the Gini coefficient of inequality increased from 0.53 to 0.61 in the same period5. Hyperinflation bankrupted the government, left more than 8 in 10 citizens destitute and decimated the country’s farms and the manufacturing sector. Almost all primary and secondary schools, as well as state universities, failed to open for the greater part of 2008 and at the beginning of 2009. Teachers refused to wok because their meagre salaries were too little even to cover their transport costs to their work stations. Attendance by pupils dropped to as low as 20%, the pass rates of school leavers dropped precipitously and examinations remained unmarked for lack of resources.

In August 2008, a cholera outbreak broke out, the worst that Africa has experienced in recent times and it claimed 4000 lives and nearly a hundred fell ill. This was at a time when many health services had collapsed and even central hospitals were closed due to lack of running water, food to feed patients, and essential medicines and supplies.

By the end of 2008, the Zimbabwe dollar had virtually collapsed and many transactions were now being done in foreign currency and businesses refusing to accept the local currency. To counter the effects of inflation on the Zimbabwe dollar the Reserve Bank Governor was constantly printing higher denominations in order to meet demand and redenominated the Zimbabwe dollar thrice, that is, in August 2006, July 2008 and February 2009. Then in September 2008 the central bank partially dollarized the economy by licensing 1000 retailers and wholesalers under the FOLIWARS scheme to sell goods in foreign currency in a move aimed at helping businesses suffering from a chronic shortage of foreign currency to import spare parts and foreign goods. Other shops and service providers followed suit although they were not authorized by the government. However, in February 2009 the economy became fully dollarized through the adoption of multiple currencies. This single policy move conquered the black market overnight, quelled inflation and empty shop shelves began to fill up once more.

It was against the above bleak and worsening background that a tripartite Global Political Agreement (GPA) involving the three major parities was signed on 15 September 2008 leading to the instalment of the Inclusive Government (IG) in February 2009. The political pact was motivated by the crying need to re-establish economic and political stability after a decade of vertiginous decline. This political intervention had an immediate and positive impact. Business and the economy began to pick up evidenced by the improved availability of goods and commodities on shop shelves. Prices began to drop and deflation actually set in: May 2009, inflation dropped by -3.1%. Industrial capacity and utilization climbed to 20% from 15% since the formation of the Inclusive Government.

All these economic and political developments formed the backdrop for this study. What were people’s perceptions about their national economy and their place in it? In other words, what macro and micro-economic attitudes do Zimbabweans have? Has the state of the economy changed in the previous year and if so, in what direction? Has dollarization made a difference to people’s lives? Are there any variations in attitudes across space (i.e. geographically) and over time (i.e. compared to previous surveys)? What are people’s attitudes towards the mega political event, that is, towards the GPA and the coalition government? What are their expectations after a decade of regression? These and other questions motivated this study.

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