Zimbabwe Now One Of The Most Unequal Societies In The World – Eddie Cross

Economist Eddie Cross says Zimbabwe’s economy is made up of three main segments, which interact and sustain one another, but in many ways remain quite distinct.

According to Cross, these are: the formal economy, now estimated at around US$50 billion in annual GDP; the informal economy, which he said is probably larger than the formal sector and employs the majority of the adult population; and the grey economy, dominated by oligarchs — white, brown, and black — who control substantial resources and operate largely under the radar, often running criminal enterprises, though not always illegally.

Cross argued that the formal economy is growing strongly and provides regular employment for over a million adults, roughly half of whom work in the public service.

However, he said the public sector is probably twice the size it needs to be and consumes about half of the national budget.

Salaries are generally low because the sector is larger than the state can afford, given that 90 per cent of the tax base comes from the formal economy.

On the other hand, Cross described the informal sector as dynamic, thriving, and highly competitive, providing livelihoods for the vast majority of Zimbabweans. He said that without it, Zimbabwe would hardly survive.

Turning to the grey economy, Cross warned that this segment may exceed the national budget in value, saying grey operators siphon off over US$2 billion a year from the fuel industry alone. Said Cross:

“We have oligarchs who can hand out hundreds of motor vehicles and millions of dollars in cash, wives who can fly to Europe first class, with friends and spend a million dollars a day.

“We have children who can walk down to a jetty in Dubai and buy a US$37 million boat for cash. Some of these people have no visible means of support.

“It’s not limited to the oligarchs – we have civil servants who can spend US$2 million on the wedding of their daughter.

“Many parts of our cities look like Hollywood – homes with helicopter pads, heated pools, irrigated gardens. Luxury cars crowd our roads.

“Yet our public education system is a disaster, private schools play sport internationally and win bag pipe competitions in Britain.

“Our public health system has no drugs, even cleaning materials. We are now one of the most unequal societies in the world and this simply cannot go on.”

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