The social impact and responses to the economic crisis in Africa: A case for Zimbabwe

Abstract

A lot of research on the economic crisis and its impact on the African countries has so far focused on the economic performances of the countries concerned. The emphasis has been on variables such as production levels relative to population sizes, trade balances, world commodity prices, unemployment, budget deficits and so on. The social impact, let alone the responses to it, are merely touched upon in passing if not ignored altogether. The objective of this paper is to focus attention on the social aspects of the economic crisis and to try and use Zimbabwean data to quantify their social impact where possible. For the purposes of this paper, the responses by the various social and economic classes to the crisis would be taken as a measure of its social impact. There is no clear-cut definition of a crisis situation. It may be argued that analysing a "crisis situation" by focusing on the trends in economic indicators merely indicates whether a crisis situation is being approached or, if already reached, whether it is worsening. Such an analysis therefore does not actually tell us whether a crisis situation has been reached or not. Paul Procter defines a crisis situation as "....a turning point in the course of anything; uncertain times or state of affairs, moments of great danger or difficulty". In this paper, the last meaning will be adopted. This paper is not concerned with establishing whether a crisis situation has been reached or not, but rather with indications of movements towards a crisis or if a crisis situation has been reached, whether it is worsening. The development of a crisis is evidenced by falling output in both agriculture and industry in a situation of increasing population and falling world prices; increases in unemployment, growing government deficit, worsening terms of trade, high inflation rates and dwindling foreign currency reserves. As the crisis gets deeper, economic agents are assumed to adapt to the new situation until they can no longer do so, at which point a revolution might be necessary. At the household level, the adjustment process takes various forms ranging from changing consumption patterns, social habits, etc., to illegal practices like prostitution, pickpocketing, housebreaking, poaching, smuggling and the like. On the firm level, adjustment takes the form of using alternative raw materials in production, modifying and/or renovating the production processes with the aim of reducing costs. If the worst comes to the worst, the firm would inevitably close down, thereby worsening the crisis situation.