Why Zim economy should adopt new theories of change
To the extent that practice without theory is like a runaway horse, the Zimbabwean economy requires an integrated theoretical base. An inadequate theory of socio-economic change and progress reinforces a mismatch between expectations and the actual capaci
FOR instance, the silent growth of the informal sector at the expense of the formal sector has presented difficulties for planners to come up with appropriate economic growth indicators that fully embrace all fragmented economic activities.
While our national GDP is said to be $13,7 billion, it might be larger than what is visible and known on the surface. Theoretical insights can illuminate the relationship between the formal and informal economies in ways that reveal the true size of the whole economy.
While agriculture and mining are considered major pillars of the economy, their relationship is yet to be explored as well as synergies between all sectors like tourism, manufacturing, trading and many others which obviously do not function in isolation. Every socio-economic activity in Zimbabwe is anchored on a very strong cultural base.
That probably explains why the economy has not completely collapsed against some predictions over past decades. This collective culture is part of a mature and inter-connected theoretical base from which all socio-economic segments get their foundational principles. Codifying these principles into a theory of change or progress will generate a powerful evidence base.
Tips of a larger socio-economic iceberg
In the absence of clear theoretical underpinnings, both the formal and informal economies continue to function as tips of a larger underlying iceberg that is not visible to many actors.
If the economic foundation remains invisible, the formal and informal sectors will continue to experience growing pains and shortfalls in coordination, leading to lack of capacity to learn from experience. The tips of Zimbabwe’s economic iceberg are depicted in the graphic above and explanations.
1. Agriculture and related activities — This is the most popular economic tip both in policy and practice. While agriculture in all its facets seems to be a major occupation, not everyone in a rural area is a farmer. Some people are artisans, traders, merchants, retired civil servants and retired industrial workers. However, most of these activities revolve around agriculture.
2. Manufacturing — This used to be a big sector supporting agriculture and others sectors but has been rapidly shrinking over the past few years. Besides the growth of the informal sector, an increase in the importation of clothes and food stuffs that we used to manufacture locally has reduced manufacturing to a smaller tip than it was before.
3. Government department and parastatals — Since these have their own way of working, they constitute an economic tip on its own.
4. Mining — Although small scale mining is expanding, mining is largely considered a domain of large corporates and multinationals. Unacknowledged is a growing gold panning sector which shares the same characteristics with the informal sector.
Gold panning competes with agriculture for youth labour in districts like Gwanda, Mt Darwin, Hurungwe, Sanyati and Shurugwi. Unfortunately, talent and knowledge associated with gold planning is not being harnessed for modernisation.
5. Transport and logistics — Co-existing with public transport services is a big private sector in the transport business ranging from buses to all kinds and sizes of haulage trucks.
6. Development partners and NGOs — These constitute their own economy with its own rules and regulations around procurement, beneficiary identification, definition of success, etc.
7. Informal sector — This is a growing sector in all its various shapes, sizes and guises. The decline in formal economic activities as well as shrinking of the manufacturing sector has seen the informal sector taking over some activities that used to be done by big formal companies.
8. Financial services sector — This comprises formal banks, insurance companies and Micro Finance Institutions (MFIs). While the number of banks has remained high, there has also been a surge in the number of Micro Finance Institutions (MFIs).
Instead of moving to rural areas which are shunned by formal banks, the majority of MFIs are concentrated in urban centres. On the other hand, some rural areas depend on their Village Savings and Lending institutions (VSLs).
9. Import and Export — Here we find those who import vehicles and different things as well as exporters of diverse commodities from Zimbabwe, both formally and informally.
10. Private education sector — This has grown into a big industry comprising preschools, private schools and private colleges which now compete with the state in providing educational services. Some of the private institutions are owned by policy makers who should be supporting Government educational institutions.
11. Retail trading — This is big business in both urban and rural areas. Modern retail chains such as OK, TM and Pick & Pay are co-existing with indigenous retailers such as Machipisa, Masamvu, Mutema, Mutongerwa, Mungwena and many others. In fact, there are diverse sizes and types of retailers of different consumer goods. Many agro-dealers are also in this economic tip.
12. Tourism and hospitality — This has remained a strong industry although there is potential for expanding into community tourism as well as blending tourism with agriculture and mining.
13. Prosperity gospel — The rise of prosperity gospel has spawned hundreds of churches which operate more like informal businesses. While traditional religious organisations can be found in all parts of the country including rural areas, churches that preach the gospel of prosperity are concentrated in urban areas where there is more money in circulation. They have evolved into a noticeable economic tip.
The importance of seeing the larger economic system through a theory of
change All the above mentioned activities currently operate as tips of a hybrid economy with a large socio-economic and cultural base. Successfully implementing these activities requires sustained change in the day to day, week by week practices of millions of individuals.
Unfortunately, these activities remain under-appreciated, under-theorised and under-researched. That is why a theory of change and progress is long overdue. Besides providing a big picture of the underlying economic system, a theory of change and progress will enable us to balance short-term problem solving with long-term value creation.
In a complex system like the Zimbabwean economy, many actors focus their attention on parts of the system that are most visible from their own vantage point.
Farmers look at the economy from the agricultural side while miners use the mining lens, same with development partners, transporters and those in the tourism and hospitality industry. This leads to arguments about who has the right perspective on economic challenges and solutions.
A theory of change can show how agriculture speaks to other sectors like mining and manufacturing
A theory of change and progress will make it possible for all actors to see the inter-connected nature of the whole economy, leading to shared understanding and co-development of solutions. Socio-economic actors will begin to see their taken for granted assumptions and appreciate how their mental models sometimes limit their potential to contribute positively.
Instead of just reacting to economic challenges, the collective humility and intelligence that emerges from seeing the large economic picture will compel all economic actors to start creating an inclusive space for positive socio-eco- nomic transformation. ◆ Charles Dhewa is a proactive knowledge management specialist and chief executive officer of Knowledge Transfer Africa (Pvt) (www.knowledgetransafrica.com) whose flagship eMKambo (www. emkambo.co.zw ) has a presence in more than 20 agricultural markets in Zimbabwe. He can be contacted on: charles@knowledgetransafrica. com ; Mobile: +263 774 430 309 / 772 137 717/ 712 737 430.