WS MoreOrLess: Zimbabwe's Economy
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This is the short edition of More or Less, first broadcast on the BBC World Service.
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Hello and welcome to More or Less. I'm Ben Carter. Last week, Zimbabwe's Finance Minister, Patrick Chinamasa, delivered his budget for 2015. His speech gave a fascinating insight into the state of Zimbabwe's economy and the challenge the country faces going forward. It also contains some rather worrying statistics.
In 2014, the government of Zimbabwe managed to find $18 million to spend on medical equipment for all hospitals in the entire country, which is a population of 12 million. Meanwhile, it also found $16.7 million to spend on maintaining Mugabe's official residences.
More from David Blair, the chief foreign correspondent at the Daily Telegraph, later. But first, let's take a look at some of the headline numbers in the budget. For a lot of economic powerhouses in the West, a predicted growth rate of 3.2% for 2015 would raise a cheer, but there's not much cause for celebration in Zimbabwe for a couple of reasons. Firstly, countries in Africa are growing on average at 5% per year, and secondly, Patrick Chinamasa had forecast growth of 6.1% for 2014. One of the reasons that Zimbabwe's economy is struggling to grow is because it has very high unemployment, which Patrick Chinamasa admitted in his budget speech. Chinamasa didn't put a figure on the unemployment rate, and trying to find an accurate number is quite difficult, as Julian Rademeier, director of fact-checking website AfricaCheck, explains.
There's old data, World Bank models and data taken from the International Labour Organization that puts unemployment at as low as 4%, which is ludicrous. Opposition figures have suggested it's as high as 95%. Robert Mugabe, ZANU-PF, has said in their election manifesto that it stands at 60%.
We know from a study done in 2011 by the Zimbabwean National Statistics Agency that 6.1 million of the 13 million population were economically active. 5.4 million of those, around 90%, were deemed to be in employment. But...
Of that number, 84% were employed in the informal sector, and only 11%, or 606,000, were in formal employment.
What does Zimbabwe’s 2015 budget reveal about the country’s economic priorities?
What that means is that the bulk of the people that Simstat's considered to be employed were actually employed in the informal sector, where many of them were subsistence farmers, small-time traders, people that other Southern African countries no longer class as employed. Essentially it inflates the employment figures for the country and it gives an unrealistic idea of what employment levels are like there.
Roughly 45% of the 606,000 deemed to be in formal employment are employed by the government. Zimbabwe's spending budget for 2014 was $3.3 billion. 80.1% of that money was spent on public service wages. To put that percentage in context, the United Kingdom spends around 23% of its budget on public sector wages. Zimbabwe's government had previously committed to reducing the amount to 60% by the end of 2014, but they now say it's a problem that can only be resolved in the medium to long term. they face a difficult task when you consider state employees turned down a 27% pay rise offer earlier this year. When a government spends four-fifths of its budget on public sector wages, there's little left to spend elsewhere.
So what was spent on healthcare, schools and infrastructure? David Blair is chief foreign correspondent at the Daily Telegraph. He lived in Harare for three years, and when the Zimbabwean government started publishing its budgets online, he began looking into them. A lot of what he found didn't surprise him.
In some countries, public spending is designed in some way to benefit the public. In Zimbabwe, public spending is designed really to benefit only one member of the public, and that's President Robert Mugabe. So to give you an example, in the course of 2014, the governor of Zimbabwe spent $824,000 maintaining the president's cars.
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