9th July 2002
How Zimbabwe is killing the region
While the G8 commits US$6 billion to development assistance in Africa, South Africa alone loses US$7,7 billion because of Zimbabwe's economic breakdown. Food for thought.
At 2001 Zimbabwe dollar prices, Zimbabwe has seen export trade fall by Z$134 billion over just two years. This sum converts to US$600 million at an exchange rate of Z$220 to one US dollar, or to US$2.4 billion at the ridiculous official exchange rate of Z$55 to one US dollar.
The $600 million is equivalent to a whole year's earnings from our most important export crop. Because it was lost, about 20,000 jobs have been lost in industry.
The US$600 million would also be enough to pay for all the food imports needed now that we have failed to produce the needed crops. Instead, we have to beg for loans or grants to pay for it.
Zimbabwe's conduct has led to withdrawals of development aid from most regional countries. Zambia believes it would have had much more success attracting direct investment as well as in restoring more of its own manufacturing capacity. The amount lost cannot be estimated accurately, but it probably exceeds US$500 million.
In South Africa, the lack of will to express disappointment or anxiety about Zimbabwe's conduct since 1997 has caused the rand to fall from R6.5 to one US dollar to figures that recently reached R11 to one. If the fall is measured only as the drop from R6.5 to R9.5 to one US dollar, South Africa's import bill at US$27 billion a year caused an increase in rand terms from R175 billion to R256 billion, an increase of R81 billion. This expressed in US$ terms amounts to US$7,7 billion, so South Africa's direct loss exceeds the full amount of support agreed to at the Nepad Conference in Canada for all the beneficiary countries.
** John Robertson is one of Zimbabwe's leading economists.
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