What next for Zim’s economy? A proactive shift towards a service-based economy
Article by Milton Jack
Foolishness simply defined is the act of doing the same thing again and again but expecting a different result. This definition can be loosely attached to Zimbabwe as a whole when it comes to its approach in terms of sectorial driven economic activities.
The focus of the Zimbabwe’s economy is mainly agriculture. This coupled with mining are the so-called “backbone” of the economy. Most efforts and initiatives in Zimbabwe are centred on trying to enhance productivity in agriculture and mining so that they become key drivers of the economy. This approach however noble it may seem has been met with failure after failure. This can be largely attributed to confounding variables such as poor rains, lack of inputs and mechanisation, bad governance and inefficient production methods. Yet despite these recurrent problems year in year out large monies are poured in the agriculture sector with the same results being achieved. Locally there is the peddling of Zimbabwe as an agro-based economy however the statistics prove otherwise.
According to Statistics Times (2017) Zimbabwe’s GDP sectorial ratios are 12.5% agricultural sector, 26.9% industrial sector and 60.6% service industry sector contribution. From this statistic alone one can see that there is a misrepresentation of facts when Zimbabwe’s economy is termed an agro-based economy.
The service industry sector is the economic sector, which deals with the provision of intangible services as opposed to tangible goods and commodities. The service sector industry deals with professional services such as banking, insurance, transport, communication, engineering, defense, justice, medicine, education, hospitality, entertainment among others. The service industry relies mainly on the use of equipment or people to provide its services. The 20th century has seen an increased growth of the service sector particularly because of increased mechanization of the primary sector. Some countries have evolved into service sector economies with the industry contributing to a significant percentage of the GDP.
In addition, World Factbook (2017) highlights that the services sector is the largest sector of the world as 63 percent of total global wealth comes from services sector. United States is the largest producer of services sector with around 15.53 trillion USD. The services sector is the leading sector in 201 countries/economies. 30 countries receive more than 80 percent of their GDP from services sector. Chad has lowest 27% contribution by services sector in its economy. Gibraltar has 100% of GDP in services sector, other two sectors have zero output (World Factbook, 2017).
Therefore, the aforementioned statistics simply analysed point out that there is a need for Zimbabwe’s economy to shift its focus from trying to be an agro-based economy to actually focusing on the big slice of the GDP cake which is the service sector. This means that there should be active action, policies, and frameworks put in place to support this initiative as is the case with the agro-sector at the moment. This will be advantageous to Zimbabwe as there is more revenue to be made in the service sector than any other industry. The other two sectors (agriculture and industry) should focus on the adoption of smart technology freeing up resources to boost the service sector.
Zimbabwe with its high percentage of skilled labour has a window of opportunity where it can start exporting services labour. It can follow the example of Cuba which exports medical personnel, India which exports support services such as call centres for countries like USA. A well-developed service industry is a major factor in developed countries. The service industry will, therefore, provide employment opportunities to the majority of the Zimbabwean population through its various sections. For an emerging economy, Zimbabwe should increasingly seek to improve its service industry to reap the benefits associated with investing in services such as tourism, banking, and education. This investment in the service sector is critical to its overall economic development.
Milton Jack is a Business Consultant at Industrial Psychology Consultants (Pvt) Ltd, a business management and human resources consulting firm.
Phone: +263 242 481946-48/481950
Mobile: +263 774 730 913
Main Website: www.ipcconsultants.com.