Policy Brief A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe - UNDP

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Policy Brief A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe - UNDP
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UnitedPOLICY BRIEF Development
       Nations     01/2020 A PreliminaryProgramme
                                         Assessment of the Socio-economic
                                                            Zimbabwe      Impact of Coronavirus (COVID -19) on Zimbabwe

     # 001/2020

   Policy Brief
    A Preliminary Assessment of the
    Socio-economic Impact of Coronavirus
    (COVID -19) on Zimbabwe
Policy Brief A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe - UNDP
2      POLICY BRIEF 01/2020     A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

                                  T
                                         he novel coronavirus was first reported as a cluster of
                                         cases of pneumonia of unknown cause in Wuhan City,
                                         Hubei Province of China on 31 December 2019. Since
                                  then, the virus, and COVID -19, the disease that it causes,
                                  has spread fast across the globe, including Zimbabwe01. Due
INSIDE                            the fast spread of the disease, both in terms of casualties and
2       Economic decline,         geographic coverage, the World Health Organization (WHO),
        governance challenges     declared the coronavirus outbreak a public health emergency
        and a fragile health
                                  of international concern on January 30, 2020, and thereafter,
        system
5       Government response       a pandemic on March 11, 2020. Being a novel disease, there
        to the pandemic           are certain epidemiological features that remain unclear and
7       Possible socio-
                                  as such it is not possible to determine, with certainty, how the
        economic impact of
        COVID -19                 pandemic will evolve. This Policy Brief presents a preliminary
11       Conclusions and Policy   assessment of the socio-economic impacts of the COVID -19
        Recommendations
                                  on Zimbabwe on the basis of some known and observable facts
                                  as opposed to a detailed and robust analysis. It identifies the
                                  possible impact transmission channels based on the structure
                                  of Zimbabwean economy, it’s geography and socio-political
                                  factors; the possible effects on Zimbabwean socio-economic
                                  development; and proffers some policy recommendations.

                                  ECONOMIC DECLINE, GOVERNANCE CHALLENGES AND A FRAGILE
                                  HEALTH SYSTEM
                                  Zimbabwe has an ambitious                                                     many sectors such as health. Over the
                                  governance reform agenda aimed at                                             past decade, economic growth has
                                  devolving key functions to the sub-                                           been on a general declining trend,
                                  national – provincial and district –                                          culminating in contraction by an
                                  levels, as well as a number of legal                                          estimated 6.5 percent in 2019. The
                                  reforms. The devolution programme                                             Covid-19 pandemic hit Zimbabwe at a
                                  however, faces a number of critical                                           time when the country had targeted an
                                  challenges and is yet to take root in                                         economic rebound by inter alia, getting

                                  01 COVID- 19 is a respiratory illness, just like flu, whose symptoms include dry cough, fever, and in more severe cases, difficulty in breathing.
3    POLICY BRIEF 01/2020           A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

 12
                                                                                                                                     Zimbabwe GDP growth
 10
                                                                                                                                     rates 2009 -2020
   8                                                                                                                                 (actual and projected
                                                                                                                                     figures) %
   6
                                                                                                                                     Source: Zimbabwe
   4                                                                                                                                 Statistical Agency
                                                                                                                                     (2020) and World Bank
   2                                                                                                                                 estimates
   0
  -2
  -4
  -6
  -8
-10             2009      2010       2011       2012      2013       2014      2015       2016   2017     2018     2019      2020

the economic fundamentals right                                          The Zimbabwean economy is
through the implementation of the                                        characterised by heavy reliance
short-term Transitional Stabilization                                    on the primary sector (agriculture
Programme (TSP)02. While the                                             and minerals) for forex earnings
economy was initially projected to                                       and employment, with limited
rebound and grow by an estimated 2.8                                     manufacturing and services. The
percent in 2020, mainly on account                                       productive capacity has been on the
of performance of the mineral sector,                                    decline due to non-competitiveness
this growth target is unlikely to be                                     of the country’s industry which
achieved in the wake of the COVID- 19                                    stems from the high cost structure
pandemic and its effects on the global                                   arising primarily from high cost of
economy, generally and, in particular,                                   labour, rentals and utilities and the
the Zimbabwean economy03. Indeed,                                        continued use of hard currency (USD)
the International Monetary Fund                                          in most transactions. Consequently,
(IMF) has reported that the Covid-19                                     a culture of widespread trade,
would make it even harder for the                                        mainly in imported goods and
government to balance the policies                                       services, is fast taking root.
needed to restore macroeconomic
stability with those needed to
address urgent social needs04.

02 Available at http://www.veritaszim.net/sites/veritas_d/files/Abridged_Transitional_%20programme%202018-10-05.pdf
03 The World Bank estimates that the economy will contract by between 5 to 10 percent in 2020
04 See https://www.imf.org/en/News/Articles/2020/02/26/pr2072-zimbabwe-imf-executive-board-concludes-2020-article-iv-consultation
4   POLICY BRIEF 01/2020     A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

                            50
Manufacturing Capacity
Utilisation (%)
                            40
Source: Confederation
of Zimbabwe Industries
(CZI) (2020)                30

                            20

                            10

                              0
                                             2012         2013         2014          2015         2016         2017          2018         2019         2020

                            Moreover, in the recent past the                                          doctors, nurses and midwives (health
                            economy has been characterised                                            workers) per 1000 population needed
                            by macroeconomic volatility                                               to meet the SDGs06. In addition,
                            as shown in below:                                                        regular strikes in the health sector,
                                                                                                      in particular by doctors and nurses,
                            The official unemployment rate                                            due to low wages and poor working
                            stands at 11 percent although the                                         conditions have further compromised
                            vast majority of the people considered                                    the quality of health care07. The
                            to be employed are engaged in low                                         Zimbabwe Service Availability and
                            paying temporary insecure work and                                        Readiness Assessment Report of
                            petty trade in the informal sector.                                       201508 revealed inadequacies in all
                            Moreover, Zimbabwe’s health sector                                        the six WHO health system building
                            remains fragile and under-resourced,                                      blocks, namely: human resources,
                            both in terms of financial and human                                      medical products, vaccines and
                            resources. According to the Ministry                                      technology including infrastructure,
                            of Health and Child Care, there are                                       health financing, health information,
                            1.6 physicians and 7.2 nurses for                                         service delivery, leadership and
                            every 10,000 people05, against                                            governance that are prerequisites for
                            WHO recommendations of 4.45                                               a functional health delivery system.

                            05 Zimbabwe Ministry of Health and Child Welfare, Human Resources for Health information sheet, 2010.
                            06 See https://apps.who.int/iris/bitstream/handle/10665/250330/9789241511407-?sequence=1
                            07 In 2019 alone, Doctors’ strike lasted for more than 4 months and only ended when a private sector company chipped in with a 6-month worth
                            of salaries package.
                            08 http://ncuwash.org/newfour/wp-content/uploads/2017/08/Zimbabwe-Service-Availability-and-Readiness-Assessment-Report.pdf
5        POLICY BRIEF 01/2020                          A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

 40
                                                                                                                                                                                                 Inflation (%) Recent
 35                                                                                                                                                                                              trends

 30                                                                                                                                                                                              Source: Zimbabwe
                                                                                                                                                                                                 Statistical Agency
                                                                                                                                                                                                 (2020)
 25

 20

 15

 10

      5

      0
                   JAN 19

                                     FEB19

                                                MAR 19

                                                          APR 19

                                                                    MAY 19

                                                                                JUN 19

                                                                                                  JUL 19

                                                                                                               AUG 19

                                                                                                                         SEP 19

                                                                                                                                  OCT 19

                                                                                                                                             NOV 19

                                                                                                                                                           DEC 19

                                                                                                                                                                             JAN 20

35                                                                                                                                                                                      FEB 20
                                                                                                                                                      US$/RTGS (Parallel)
30                                                                                                                                                                                               Interbank Market &
                                                                                                                                                                                                 Parallel Market Rates
25                                                                                                                                                                                               (ZWL$ / USD$)
20
                                                                                                                                                                                                 Mar 19 - Feb 20
15                                                                                                                                                                           Interbank
                                                                                                                                                                                                 Source: Reserve Bank
10                                                                                                                                                                                               of Zimbabwe (2020)
                                                                                                                                                                                                 and UNICEF Zimbabwe
  5                                                                                                                                                                                              (2020)
  0
          28 MAR

                            28 APR

                                             28 MAY

                                                           28 JUN

                                                                       28 JUL

                                                                                         28 AUG

                                                                                                           28 SEP

                                                                                                                                    28 NOV

                                                                                                                                                  28 DEC

                                                                                                                                                                    28 JAN

                                                                                                                                                                                      28 FEB
                                                                                                                        28 OCT

GOVERNMENT RESPONSE TO THE PANDEMIC
Since the onset of the pandemic,                                                                           the pandemic and ameliorate its
the government has instituted a                                                                            effects, especially on the poor and
number of policy, institutional and                                                                        vulnerable members of society09. The
operational measures to combat                                                                             government’s response is founded

09 The policies and operational measures are deposited Ministry of Health and Child Care (2020): Zimbabwe Preparedness and Response Plan
– COVID -2019
6   POLICY BRIEF 01/2020    A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

                           on the following principles: limiting                             frontline of the response. Moreover,
                           human-to-human transmission,                                      the government has effected
                           including to health personnel; early                              expenditure restructuring away from
                           identification, isolation and care                                capital projects to health-related
                           for patients; risk communication                                  expenditures; ring-fencing of the 2
                           and community engagement;                                         percent money transfer tax for social
                           narrowing knowledge gaps in                                       protection and other pandemic related
                           disease transmission, prevention                                  expenditures; availed USD 2 million
                           and treatment; and minimizing                                     for urgent and immediate importation
                           social and economic impact.                                       for health-related supplies; approved
                                                                                             immediate hiring of over 4000 health
                           At the apex of the national response                              personnel; availed ZWL 200 million
                           architecture is an inter-ministerial                              (USD 8 million) per month for a period
                           task force, currently chaired by one                              of three months as cash transfers to
                           of the Vice Presidents, that is tasked                            an estimated one million vulnerable
                           with overseeing implementation                                    households; ordered the expeditious
                           of all necessary measures to limit                                processing of value-added and
                           transmission. Below the inter-                                    corporate tax refunds and extended
                           ministerial task force there are nine                             the period within which tax is payable;
                           working groups with membership                                    suspended customs duty chargeable
                           from government, development                                      on COVID-19 medical supplies
                           partners, private sector and academia                             and reviewed procurement rules
                           with the responsibility for conducting                            to expedite purchase of COVID- 19
                           risk and capacity assessments;                                    supplies; and intends to support local
                           preparation of standard operating                                 industries with capacity to produce
                           procedures (SOPs), guidelines and                                 basic food stuffs and pharmaceuticals.
                           tools; identification of key priorities                           And in an effort to mobilise additional
                           to scale up implementation of                                     resources, especially from the
                           priority activities; preparation of                               private sector, the government has
                           operational budgets and timelines for                             established a National Disaster Fund to
                           implementation of identified priorities;                          which individual and corporate entities
                           and determination of priority resource                            may make contributions. The fund has
                           requirements and resource mapping.                                received an overwhelming response
                                                                                             from the private sector through, for
                           To date, some of the specific measures                            instance, the local business fighting
                           so far taken by government include,                               COVID-19 consortium. Additionally,
                           but are not limited to, a stimulus                                on 21 March 2020 Zimbabwe began a
                           package of ZWL 500 million (approx.                               national lockdown in a bid to combat
                           USD 20,000,000) to help fight the                                 the spread of the coronavirus - this
                           pandemic and specifically, ZWL 50                                 meant the shutting down of most
                           million (USD 2,000,000) for medical                               governmental institutions except in
                           aid, mostly for civil servants on the                             the health sector and the uniformed
7     POLICY BRIEF 01/2020           A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

forces who are instrumental in                                             enforcing the lock down.

POSSIBLE SOCIO- ECONOMIC IMPACT OF COVID -19

The pandemic is, for all practical                                         GDP growth in the continent11.
purposes, still evolving, a fact                                           For Zimbabwe, whose economy
which renders an assessment of                                             contracted by an estimated 6.5
its possible impact problematic.                                           percent in 2019, continued contraction
However, on the basis of recent                                            in the magnitude highlighted above,
developments and observable                                                or more given the fragility of the
trends, as well as government and                                          economy, would be disastrous,
private sector responses, there are                                        affecting, disproportionately, the poor
certain discernable impacts that                                           and vulnerable, small and informal
merit highlighting at this early stage.                                    businesses, as well as small scale
In an attempt to understand the                                            agricultural producers. Delayed
potential impact of the pandemic on                                        imports of goods (see below) could
Zimbabwe, it is instructive to note                                        increase shortages of basic consumer
that although it is primarily a health                                     and intermediate goods and thus
crisis, it nonetheless has far-reaching                                    fuel further inflationary pressures
public governance, socio-political                                         in the country – imported inflation.
and economic ramifications. And                                            These, together with wide currency
to understand these ramifications,                                         fluctuations and possible rising
it is useful to determine the                                              debt in the wake of the increased
channels through which the effects                                         demand for goods and services for
are likely to be transmitted.                                              effective response to the pandemic,
                                                                           could dampen growth further and
Growth is likely to be depressed                                           discourage the much- needed
further: A stable macro-economic                                           investments thus leading to an
environment is a sine qua non for                                          increase in the incidence of poverty.
economic growth, investments, job
creation and poverty reduction10.
A recent study by McKinsey and
Company has reported that, left
unchecked and especially in
the absence of a fiscal stimulus,
the pandemic will lead to a 3
-8 percentage point decline in

10 See for instance, Bleamey, M.F (1996): Macroeconomic stability, investment and growth in developing countries. Available at https://www.
sciencedirect.com/science/article/abs/pii/0304387895000496
11 See Kartik Jayaram, Acha Leke, Amandla Ooko-Ombaka, and Ying Sunny Sun (2020) Tackling COVID-19 in Africa: An unfolding
health and economic crisis that demands bold action
8   POLICY BRIEF 01/2020     A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

                           Effects of lower oil prices are likely                                     for Zimbabwean exports, especially
                           to be offset by declining global                                           tobacco which is likely to be adversely
                           demand for exports: Zimbabwe relies                                        affected by economic slowdown
                           heavily on fuel imports to meet her                                        in that country13. China is also an
                           total energy demand12. Crude oil Brent                                     important source of intermediate
                           prices have declined sharply from 69.                                      goods for South Africa, Zimbabwe’s
                           6 USD per barrel on January 5, 2020                                        main trading partner and thus any
                           to the current (April 03, 2020) price                                      slowdown in economic activity in China
                           of 27.5 USD per barrel, a 60 percent                                       will also affect the country indirectly
                           decline. This decline however, is                                          via reduced trade with South Africa.
                           unlikely to translate into benefits for
                           Zimbabwe as it is likely to be offset by,                                  Decline in tourism will lead to more
                           paradoxically, rising local fuel prices                                    job losses and dampen growth:
                           as well as declining global demand                                         Tourism is a key sector for Zimbabwe’s
                           for Zimbabwean exports, especially                                         economy, generating an estimated
                           tobacco and minerals. The Chamber of                                       US$1.4 billion (3.3 percent of GDP)
                           Mines of Zimbabwe has estimated that                                       in revenue in 2018. Currently, most
                           mineral production could plunge by                                         of the source countries have issued
                           60 percent in the first quarter of 2020                                    travel restrictions or are in total
                           alone as companies reduce output                                           lockdown resulting in an increased
                           due to disruptions in the supply chain                                     number of booking cancellations. Tour
                           and logistics leading to a loss of USD                                     operators and hotels in the resort
                           400 million in revenues. Depressed                                         city of Victoria Falls for instance had
                           activities in the mining sector will also                                  reported 80 percent cancellations by
                           adversely affect forex earnings since                                      early March 2020 and more recently,
                           minerals account for at least one                                          most hotels have shut down altogether
                           third of the country’s forex earnings.                                     leading to loss of jobs and income.

                           Reduced merchandise trade will                                             Remittances are likely to decline,
                           negatively affect forex earnings,                                          affecting access to basic social
                           revenue and growth: Exports of                                             services and increasing vulnerability:
                           goods, mainly primary commodities,                                         Zimbabwe receives an estimated
                           which accounted for an estimated                                           US$1 billion in remittances from
                           22 percent of GDP in 2018 are                                              its diaspora community annually.
                           expected to be adversely affected by                                       Remittances are expected to decline
                           direct and indirect linkages with the                                      as countries hosting significant
                           global economy, mainly China and                                           numbers of Zimbabwe’s diaspora
                           European Union (EU) countries. China                                       community such as South Africa are
                           remains an important destination                                           affected due to slowdown in economic

                           12 In 2017, the country spent some $74.4 million on importation of refined petroleum products, making it the fifth most important import, by
                           value.
                           13 In 2017, China was the top destination market for Zimbabwean export, followed by South Africa, United Kingdom, India and Zambia.
9     POLICY BRIEF 01/2020            A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

activity and the current lockdown                                            malnutrition is likely to be on the rise
resulting in job losses and reduced                                          among the food insecure, exacerbating
incomes. Given the important role of                                         the risk of disease among adults and
remittances in sustaining livelihoods                                        stunting and wasting in children.
in Zimbabwe, a decline in remittances
will further compromise access to                                            Zimbabwe’s fragile healthcare
basic social services and increase                                           system will be stretched further
vulnerability for many households.                                           in the short run but could emerge
                                                                             stronger in the medium to long term:
Household food insecurity is likely                                          Zimbabwe’s heath system is bedeviled
to worsen as a result of adverse                                             by a plethora of challenges, including
climatic factors and breakdown                                               a lack of resources, mostly financial,
in supply chains: The agricultural                                           as well as a host of institutional and
sector remains the backbone of the                                           governance issues all of which render
Zimbabwean economy in terms of                                               service delivery problematic. The
forex earnings and food security at the                                      health system is beset by periodic
household level. Due to a combination                                        strikes by health workers over
of adverse climate conditions, land                                          remuneration, low morale among the
tenure system and poor agronomic                                             workers and poor working conditions
practices, agricultural production and                                       characterized by lack of essential
productivity have been on the decline                                        equipment, inadequate medicines and
in the recent past. As a consequence,                                        medical supplies including personal
a large number of Zimbabweans lack                                           protective equipment (PPE). While
access to adequate food and have                                             the government had put in place a
to rely on humanitarian assistance14.                                        number of preventative measures
An estimated 59 percent of the total                                         aimed at flattening the curve, there
population are food insecure and in                                          can be no gainsaying the fact that the
need of immediate food assistance,                                           health system will be overstretched
which in the short-run can only be                                           and will not cope resulting in high
met through imports and, to a lesser                                         mortality rates should the pandemic
extent, increased local production.                                          escalate beyond the current level15.
The breakdown and/or slowdown                                                However, the pandemic has also
of global supply chains and lack of                                          led to unprecedented collaborative
foreign currency as well as physical                                         effort between the government,
barriers to movement of goods across                                         the private sector, development
borders however, will negatively affect                                      partners and other stakeholders to
food imports to meet the domestic                                            mobilise resources for the health
shortfall. Perhaps needless to say,                                          sector, especially those health
due the limited availability of food,                                        facilities designated as isolation and

14 An estimated 4.34 million people in Integrated Food Security Phase Classification (IPC) phase 3 and 4 in rural areas will be requiring food
assistance between February and June 2020
15 The pandemic has exposed the latent fragilities of even some of the most developed health care systems in the world.
10   POLICY BRIEF 01/2020     A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

                            treatment centres. If this resource                                     a result of the pandemic, although, on
                            mobilization and targeting for the                                      the global scale, some researchers
                            health sector was to be expanded to                                     have posited that more men than
                            other health facilities including those                                 women are dying, potentially due to
                            in the provinces and districts, the                                     sex-based immunological or gendered
                            health system would be strengthened                                     differences, such as patterns and
                            in the context of devolution easing                                     prevalence of smoking16. Anecdotal
                            pressure on Harare-based facilities                                     evidence from developing countries
                            and offering service to the people                                      like Zimbabwe however, suggests
                            most in need close to where they live.                                  that women are likely to suffer
                                                                                                    disproportionate effects of such
                            Human capital formation will be                                         pandemics as women mostly bear
                            adversely affected with rural areas                                     burden of care work as a result of
                            and low-income households most                                          morbidity; and household chores,
                            affected: On March 24,2020, in                                          especially when everyone is at home
                            an effort to curb the spread of the                                     during school closures and lock downs
                            disease, the government announced                                       or when some family members are
                            indefinite closure of all schools and                                   undergoing quarantine or isolation.
                            other institutions of learning, which                                   Moreover, women, especially nurses
                            coincided, in part with the planned                                     and community social workers17
                            school holidays. While learners from                                    are often at the frontline of national
                            some urban schools and middle-                                          response against pandemics such as
                            class households have continued with                                    this COVID 19 and in the absence of
                            e-learning, those in low income rural                                   PPE kits are more likely to be exposed
                            and high-density urban and peri-                                        than men. Women and girls are also
                            urban areas have effectively stopped                                    more likely to suffer from sexual
                            learning because of lack of equipment                                   and gender-based violence during
                            and support structures. In the event                                    crises like the current pandemic,
                            of school closure beyond the current                                    especially during lockdown and
                            holiday period, there is likelihood of                                  restricted movement. Additionally,
                            skewed access to education, in the                                      women’s and especially adolescent
                            final analysis exacerbating inequalities                                girls’ reproductive rights are likely
                            in education outcomes, poverty                                          to remain unmet as the government
                            reduction and human development.                                        re-prioritizes expenditures, including
                                                                                                    health sector expenditures, towards
                            Women and girls likely to be more                                       the fight against the pandemic.
                            adversely affected: It is premature                                     Lastly, the current lockdown and
                            to say whether more women than                                          travel restrictions as well as reduced
                            men are likely to die in Zimbabwe as                                    merchandise trade are also likely

                            16 See, for example, Wenham, Smith and Morgan, 2020 – available at  https://www.cgdev.org/blog/how-will-covid-19-affect-women-and-girls-
                            low-and-middle-income-countries.
                            17 According the Zimbabwe Labour Force Survey (2014), an estimated 64.2% of the health sector labour force are women.
11   POLICY BRIEF 01/2020   A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

to disproportionately affect women                          been reported cases of human rights
since the vast majority of women                            abuses in many countries across the
are engaged in micro enterprise                             globe. There is therefore, fear, in some
activities which rely on unfettered                         quarters, that the same will occur in
movement of merchandise goods                               Zimbabwe, particularly during the
across and within national borders.                         lockdown period as the security forces
                                                            move to enforce the lockdown orders.
Possible slowdown of the devolution
agenda: The government of                                   Depolarizing national politics, bi-
Zimbabwe is currently in the process                        partisan approach to the response:
of devolving the powers of central                          On a positive note, both President
government, that is, the Executive and                      and the opposition leader have urged
the Treasury functions to the local                         Zimbabweans to act in unity and
governments of the 10 provinces.                            adopt a nationwide campaign against
The response to Covid-19 which                              the pandemic in order to flatten the
requires greater coordination and                           curve in the interest of the nation.
policy and programmatic direction                           It is such convergence of minds
from the centre could slow this                             at the highest political level that
noble policy stance of devolving                            demonstrates that Zimbabweans can
power, authority and decision                               de-polarise their otherwise seemingly
making to the sub-national level.                           intractable divergent political views
                                                            when faced with a common enemy.
Human rights abuses likely to                               The potential for unity of thought
increase: Many countries are                                and purpose could generate a turn-
currently implementing various                              around in the seemingly intractable
degrees of restricted movements with                        polarization in the country.
security forces deployed to enforce
compliance. There has however,

CONCLUSIONS AND POLICY RECOMMENDATIONS

Zimbabwe’s health system remains                            have been adversely affected by
fragile and ill-prepared to cope                            the pandemic. The government of
with the pandemic. This situation                           Zimbabwe, therefore, has only limited
is exacerbated by the country’s                             fiscal legroom available for effective
weak economic position due to                               response to the pandemic. Across
a huge external debt burden and                             the globe many countries have begun
heavy reliance on commodity,                                implementing a number of stimulus
mostly tobacco and mineral exports,                         packages, with the USA announcing
tourism and remittances for foreign                         the greatest stimulus package to the
exchange and revenue, all of which                          tune of USD 2.2 trillion comprising of
12   POLICY BRIEF 01/2020    A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

                            direct payments to individuals and                                    is prudent to devise ways of keeping
                            families, loans to small businesses,                                  such businesses and even more
                            unemployment insurance benefits and                                   established formal ones operational
                            loans to distressed companies. While                                  even during the lockdown as a
                            such a package would be desirable in                                  complete lockdown could lead not
                            the current circumstances, Zimbabwe                                   just to loss of income and jobs but
                            has very limited fiscal space for                                     also social unrest. The critical public
                            policy manoeuvre and as such                                          investments in this regard should
                            innovative, efficient and pragmatic                                   be aimed at providing basic social
                            response measures will be needed                                      services such as running water and
                            in the fight against the pandemic.                                    sanitation facilities in markets and
                                                                                                  ensuring strict adherence to the set
                            Against this backdrop, we propose the                                 hygiene practices including use of
                            following policy recommendations:                                     face masks, regular handwashing/
                                                                                                  sanitization and social distancing.
                            • Halt the spread and/or flatten
                              the curve : As a priority measure,                              • Strengthen the health system
                              Zimbabwe, working in concert with                                 within a devolved system of
                              the international community, and                                  governance: The pandemic has
                              especially her regional neighbours,                               brought to the fore the need to
                              should halt the spread and, in                                    strengthen the health system in the
                              the worst case scenario, flatten                                  country by inter alia, addressing
                              the curve as much as possible by                                  the ever-present problem of lack
                              instituting community isolation                                   of finances, shortage of trained
                              measures that keep the daily                                      and motivated health workers;
                              number of disease cases at a a                                    improving service delivery and
                              minimum or manageable level                                       access to essential medicine
                              for medical providers to avoid a                                  and supplies; strengthening
                              situation where its fragile health                                health information system; and
                              system becomes overstretched and                                  promoting good governance in the
                              unable to cope with the pandemic,                                 sector. More importantly, there is
                              leading to high morbidity and                                     a need to approach the pandemic
                              mortality.                                                        response from a devolution lens
                                                                                                as outlined in the constitution and
                            • Carefully manage the pandemic                                     other legal instruments. In this
                              within the context of a thriving                                  way, the response will not only
                              informal economy: In the absence                                  serve to address the pandemic
                              of a robust social protection                                     but also strengthen the system of
                              programme and especially, a                                       governance as well as ease the
                              Lifeline Fund or its variant to                                   demand on the fiscus as it will rely
                              support small scale traders and                                   on local leadership and institutional
                              businesses in the informal sector, it                             structures.
13   POLICY BRIEF 01/2020   A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

• Mobilise additional resources: In                             especially among the existing
  order to expand the available fiscal                          small scale traders in the informal
  space, the government should                                  sector as means of promoting their
  aim for greater efficiency in the                             businesses and as step towards
  application of scarce resources by                            formalising the informal sector.
  curbing wastages, duplication and
  leakages given the limited scope                          • Promote good governance and
  for additional borrowing and huge                           respect for human rights: In
  inflows of external aid. Relatedly,                         responding to the pandemic
  the government should address, as                           there is need to promote peoples’
  a matter of urgency, illicit financial                      participation, transparency, rule
  flows from the country, especially                          of law, consensus building, equity,
  from the extractive sector. While                           inclusiveness, effectiveness,
  the above measures would lead                               efficiency and accountability
  to enhanced domestic resource                               for results – the basic tenets of
  mobilization, it is also evident that                       good governance. In addition to
  the response requires additional                            supporting the security sector
  international support. Hence, there                         to maintain law and order while
  is a need for a well-coordinated aid                        respecting human rights, there
  architecture to be established as an                        is a need to further empower the
  integral part of the response. Such a                       various independent commissions
  robust aid architecture could also be                       to support monitoring and reporting
  leveraged to support the recovery                           of possible human rights violations
  agenda post the pandemic.                                   in a proactive manner.

• Cushioning the poor and vulnerable:                       • Turning adversity into opportunity:
  There is need to cushion a large                            The pandemic presents an
  segment of the population who                               opportunity for instituting a
  are poor and vulnerable- small                              development model characterised
  scale farmers, petty traders in the                         by investments in domestic
  informal sector, people living with                         productive capacity especially for
  HIV and AIDS, people living with                            basic goods and medical essentials
  disability etc from the adverse                             such as face masks, sanitizers
  effects of the pandemic through                             and PPEs and promoting regional
  targeted social transfers.                                  trade and deepening collaboration
                                                              between Zimbabwe and her
• Make credit more affordable and                             neighbours. It also presents an
  promote entrepreneurship: There is                          opportunity for the consideration
  need for government to put in place                         of greater investments in basic
  measures that would render credit                           services water and sanitation and
  more affordable while at the same                           critical sectors of the economy such
  time promoting entrepreneurship,                            as agriculture, manufacturing and
14   POLICY BRIEF 01/2020   A Preliminary Assessment of the Socio-economic Impact of Coronavirus (COVID -19) on Zimbabwe

                             services sectors, as well as better
                             management of the extractives
                             sector for forex earning, revenue
                             generation, sustainable job creation
                             and poverty reduction. Moreover,
                             there is a need to adopt a long-term
                             and regional, that is, devolution,
                             approach in strengthening the
                             health system to combat the
                             pandemic, currently, and offer
                             quality and accessible health care
                             as well as other basic services to the
                             people, now and in the future.
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