Is Zimbabwe a Consumptive Rather Than Productive Economy?

By Newton Mambande

ZIMBABWE has shifted from a productive economy to a heavily consumptive one, relying on imports—from basic goods like food and clothing to luxury vehicles and raw materials—due to weak local production, high costs, and supply chain disruptions.

With consumption accounting for 80% of GDP and investment lagging at just 20%, the economy risks stagnation unless policies incentivize local manufacturing, reduce import dependency and revive industrial productivity through tax breaks, subsidies, and pro-local material policies.

This is reflected by an ever increasing volume of imports from Zimbabwe ‘s biggest trading partners, like China, India, South Africa, and Singapore. The imports from the stated and not sources are mostly finished goods such as rice, porridges and cereals, beers and wine, and electrical appliances amongst others.                     

In addition to that, the country heavily relies on second-hand clothes and footwear smuggled from the United States, Malaysia, and Singapore through the porous border shared between Mozambique and Zimbabwe in the east.

 Zimbabwean consumers have reached a stage of putting on second-hand underwear garments such as bra and men’s wear, as well as Brazilian hair. The luxury vehicle cars popularized by Zimbabwe car lovers as “ex Japenese” are second-hand which are offloaded at the bay of Dar es Salaam port and destined for the “dumping site” of Zimbabwe.

One might argue, United States of America (USA) President Donald Trump was right when he stated that Africa is “a shit-hole” of the developed North. The high-income end market is also consuming imports. Everyone with disposable income would love to buy new nice clothes branded Louis Vuitton, Zara, Jeep and Chino from the USA and western Europe and the top of the range vehicles such as Toyota Prado, Range Rover and Ford Ranger are not assembled locally, they are manufactured or assembled in South Africa and Japanese car assemblies.           

Although consumer foods more than 70% are produced locally by Zimbabwe’s manufacturing industry, the 70% of raw materials being used is sourced from the outside country. The white pea beans for baked beans are imported from Malawi and Ethiopia by Cairns Foods Limited because of unavailability and access to raw materials locally. Maize and crude materials for manufacturing snacks, beverages, and porridge are Zambian imports. Further, soya meal for soya mince and groundnuts for peanut butter making are imported from Malawi.

The business is sourcing for imports from Malawi and Zambia because of local production limitations and supply chain disruptions indebted to Covid-19 pandemic in 2020 and many industries have not yet recovered from pandemic adversity in 2022.  It should not be ignored that the cost and availability of resources is too high such to an extent that businesspersons and entrepreneurs in the commercial marketplace fail to produce goods with a competitive market price. With this in regards, the local consumers end up purchasing the most affordable goods and services from the outside country.

This is reflected by the consumption rate which is 80% of Zimbabwe’s GDP, and it is thought that the rate increased by 0.1% to US$21.26 billion; and the remaining 20% is channelled towards investment. It’s clear that if this is not addressed in future the Zimbabwe economy will never be productive.

Something should be done to reduce dependence on imports and limited investment opportunities. Thus; tax incentives for the manufacturing industry in the form of tax breaks, subsidizing production of raw materials to cut costs, and the industrialization policies have to be pro use of local raw materials.

Newton Mambande is an entrepreneur and researcher. He has published scientific research in internationally acclaimed journals. He can be reachable via newtonmunod@gmail.com or by phone: +263773411103.