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Week of Action Against Inequality

Syndicate

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  • 17 July 2019
  • user1@zimcodd.org

 The Zimbabwe Coalition on Debt and Development (ZIMCODD), in collaboration with Oxfam will roll out a Campaign on Fighting Inequality in Zimbabwe. Poverty levels in Zimbabwe are increasing due to the continued economic crisis exacerbated by the various macro-economic and political fundamentals which need to be addressed including currency stabilisation to control inflation and exchange rate; government expenditure to efficiently manage public finances; money supply; productivity to improve the current account; and on the political front  there is the leadership legitimacy question; lack of rule of law and political will and sincerity. The Inequality Campaign is meant to raise awareness amongst the marginalised groups of the community that Zimbabwe is not poor but the distribution of national wealth is skewed towards the ‘haves’ at the expense of the ‘have nots’’. The campaign will be rolled out with the belief that when more citizens are aware of the anomalies, then they would rise up and engage in various social accountability initiatives meant to ensure that duty bearers are accountable for their actions which are corrupt and have greatly contributed to plunging the nation into the current economic mess as tax payers’ money is mismanaged.

 

ZIMCODD has been engaging in various initiatives in fighting inequality at local, national and regional levels since inception through advocating for social and economic justice. From 2017 ZIMCODD strengthened its fight against inequality by joining forces with Fight Inequality Alliance (FIA) and the collaboration was focusing on initiatives during the Fight Inequality Week which is recognised annually as a parallel process to the World Economic Forum to remind world leaders that as they gather in lavish hotels spending tax-payers’ money, there is need think of the poor who are languishing in poverty across the globe. In 2019, ZIMCODD welcomed Oxfam in the fight against inequality and broadened the initiatives to go beyond the Fight Inequality Week. In the previous project, the organisations conducted community meetings to raise awareness on the poverty and inequality levels in the country. The community meetings unearthed inequalities at local level between people living in low (e.g. 3000sqm) and high (e.g. 150sqm) density suburbs; urban vs per-urban/rural/informal settlements; and private (where teachers are capacitated to teach) vs government/satellite schools (where teachers are incapacitated to teach). Since this was the inception of more work in the future, there is need to strengthen the fight inequality campaign by spreading the campaign to more area across the country.

 Context

Zimbabwe’s economy has slumped as the key socio-economic indicators have collapsed as indicated by the hyper-inflationary environment; volatile exchange rate; negative balance of payments; high unemployment rates; collapsed social services delivery system with health workers (doctors and nurses) who have downed tools; scarce clean and portable water; sanitation compromised; and the education sector is in a dire situation as the teachers are incapacitated to deliver. Poverty levels in Zimbabwe are estimated at over 70% whilst 94.5% of the population is informally employed. The 2019 Oxfam Inequality Report indicated that the top 1% of Zimbabweans own 16% of the country’s total income. The current economic crisis has eroded household incomes as prices of basic commodities continue to rise.

 

The country’s public debt stands at ZWL$8,761 domestic debt and USD8.2 billion external debt. To a greater extent, the country’s unstainable public debt burden has contributed to the current economic crisis as the national economic blueprint, the 2030 Upper-Middle Income Economy (U-MIE) Agenda’s neo-liberal thrust was influenced by the International Financial Institutions, especially the International Monetary Fund (IMF) and World Bank. Reality is proving that basing national development using the wealth classification (Income Economy) by the World Bank directly results in increased inequality gaps between the rich and the poor as countries aim to reach the next level at the expense of real human development. South Africa has the highest Gini index of 63 as of June 2019 and it is regarded as one of the most unequal societies in the world but they are classified as an Upper-Middle Income Economy. Zimbabwe with its Low-Income Economy status has a Gini index of 43.2.

The free market economy approach to national development currently being implemented by Zimbabwe is pro-business rather than pro-poor and this is the reason the country is aggressively promoting the ‘Zimbabwe is Open for Business’ mantra. The mantra is meant to attract as much foreign direct investment as is possible and tax incentives have been put in place including tax holidays and reduction of mining royalties from 10% to 2.5% for some multinational corporations. This is one of the reasons the government introduced the 2% Tax. The 2% Tax further regressed the country’s tax system as the poor are paying more taxes (with the minimum tax threshold at ZWL$20 which is too low and it’s not surprising that even those in abject poverty are paying the 2% Tax) than the rich (whose tax free threshold is ZWL$750,000, where after the tax is constant at ZWL$15,000). This has widened the income inequality gap between the rich and the poor. The IMF and World Bank are the key drivers of austerity measures in the current economic development trajectory as they encourage governments to save more and spend less, which literally translated into an increased tax base (the introduction of the 2% Tax) and reduced public spending towards social services delivery. This has resulted in the current crisis being experienced in the social services delivery system and the social and economic rights for citizens are being threatened if not violated in some instances. Citizens have automatically adjusted into the ‘save more and eat less’ mode.      

The quest for FDI is especially high in the mining sector which is the major foreign currency earner in the country. Considering that most natural resource extraction activities are located in remote or rural areas, these communities have suffered the most as the mining companies are not promoting local content development. In the mining sector, communities have been left worse off as the environment which sustains livelihoods is destroyed. The same mining communities are subsidising the taxes which were supposed to have been paid by the very mining companies if it had not been the introduction of the unsustainable tax incentives. In Mutoko, villagers’ livelihoods are anchored in horticulture farming/gardening but due to blasting from black-granite mining, the water table has been seriously lowered such that most open water sources have dried up leaving the communities’ livelihoods at risk and household incomes reduced yet Chinese companies, in cohorts with politicians in the country are amassing wealth from the black-granite.  

Over 70% of the population depends on agricultural productivity for livelihoods, which is a very delicate sector considering the heightened climate change impacts of which the nation’s adaption preparedness is poor. The recently experienced Cyclone Idai was a litmus test for disaster preparedness and the government of Zimbabwe was found wanting. The 2018/19 agricultural season flopped as the El-Nino induced drought swept throughout the country and recently the government indicated that it needed to import 700,000 tons of maize to supplement national stocks. The devastation caused by Cyclone Idai is one example of how climate change has widened the inequality gaps geographically as the greater part of the Chimanimani landscape of was transformed into one where livelihoods can no-longer be derived leaving communities worse off compared to other areas where the communities are still deriving their livelihoods from their environs.  


18-25 January 2020 - Mutoko, Harare, Goromonzi, Mutare, Hwange

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