Current Edition >> Archives Section >> Leading Stories >> 1 - 15 July 2003
With the visit of American president George Bush to South Africa this month, the effect of the Zimbabwean crisis - and the difference of opinion between the two governments - will be high on the agenda. Looking at the hard facts, it remains a riddle why the SA government is continuing to assist in keeping the dictatorial Mugabe regime in Zimbabwe in power. Apart from the human rights atrocities in Zimbabwe, the crisis has already cost South Africa some R15 billion during the period 2000-2002.
The latter figures come from a research report entitled “The cost of Zimbabwe to the South African economy”conducted under the auspices of the Zimbabwe Research Initiative in Johannesburg. “The cost of Zimbabwe to the South African economy is divided into two distinctive parts - the real and the financial economy effects. Real economy effects, which include exports of goods and services, tourism, non-payments and foreign direct investment (FDI), are easier to quantify than the financial economy effects, measured in exchange rates, inflation and interest rates,” the report states. It indicates that the real economic effect of Zimbabwe on South Africa has added up to over R9 billion by end 2002. South Africa has, for example, suffered goods export losses to the value of R6 billion in this period, while some R2 billion has been lost in service exports to Zimbabwe.
Visible trade exports from South Africa to Zimbabwe have declined from about 5% in 1990 to the current figure of about 2%. Where Zimbabwe used to be South Afica's sixth-largest trading partner, it has now been lifted out of the top 10 by countries such as Mozambique and Angola. Other real economy effects suggest that South Africa has lost about R180 million in tourism revenue as a result of the crisis in Zimbabwe, while FDI figures translate to an average loss of R270 million. Meanwhile, South African companies have also lost some R465 million as a result of non-payment from Zimbabwe. As for the financial economy effects of Zimbabwe on South Africa, the report claims that the rand directly decreased by 9,9% in value from 2000 to 2002 as a result of the declining political, social and economic situation in Zimbabwe, while inflation rates increased by 1,2% on a year-on-year average.
Furthermore, the present currency trends in the table below indicates that the Zimbabwean dollar is now worth less than R0.01c ! Combining the effects of both the real and financial effects of the Zimbabwean crisis, a midrange estimate of a R15 billion loss to the South African economy translates into a total GDP loss of 1,3%. Put differently, South Africa's GDP would have been around 1,3% larger by the end of 2002 if it were not for the crisis in Zimbabwe for the last three years, which means that South Africa suffered a GDP growth loss of just over 0,4% a year, the report concludes. All this amidst the situation where it is estimated that two-thirds of the 11,2 million population of Zimbabwe is dependent on foreign food aid. To this, the SA government over the past months donated millions of rand, much of which was food transported by a continuous chain of truck loads from Free State maize silos to Zimbabwe. Against this background some commentators reckon that if South Africa was to close its Beit Bridge border post and even to simply switch off the Eskom power supply to Zimbabwe, the Mugabe regime would pass into history in less than a week.
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