The Path of Cotton Value Chains to Development
An Exploration of the Resuscitation of the Cotton-to-Clothing
Value Chain in the Post Economic Liberalisation Era in
Zimbabwe
Emma van Schie
12297607
MSc International Development Studies (Research Master)
University of Amsterdam
Thesis Advisor and First Reader: Dr Nicky R.M. Pouw
Second Reader: Dr. Esther Miedema
Date of Submission: 28 June 2020 Date of Defence: 2 July 2020 Word Count: 29,976
“In her book, The Golden Thread, Kassia St Clair writes, ‘We live surrounded by cloth. We are swaddled in it at birth and shrouds are drawn over our faces in death. We sleep enclosed by layer upon layer of it - like the pea that woke the princess in the fairytale - and when we wake, we clothe ourselves in yet more of it to face the world and let it know who we shall be that day … Textiles have allowed humans the ability to live and travel through a plethora of regions that might otherwise have been too cold to be hospitable. Rich silks and warm woolen clothes bartered through trade networks such as the Silk Road facilitated cross-cultural exchanges of ideas, craft, techniques, and people.’ Often these exchanges, sometimes better known as colonisation, were largely exploitative. Cotton in many ways brought the British Empire to India and upheld slavery in the United States. Fur hats contributed to European settlement in Canada oppressing indigenous people along the way. Sheep's wool made possible the travels of Vikings. And as St Clair points out, even advancement in protective textiles made possible man's mission to space. In almost every tragedy, and every advancement of human society, materials have had a hand in shaping our world and our future. So as we think about how to shape the world, let's consider textiles as the building block of a world in which we wish to live.” (Fashion Revolution, 2019).
Abstract
The purpose of this study is to use mixed methods research to analyse the performance of firms in the Cotton-to-Clothing value chain in Zimbabwe, and to use this analysis to add to the small pool of studies on Sub-Saharan African value chains performing in the context of economic liberalisation, and achieving development.
The uptake of economic liberalisation measures across Sub-Saharan Africa has led to the restructuring of many value chains. While this action has resulted in some African economies positively reintegrating into global commodity chains, it has also been deeply problematic for the development impacts of the majority of others. Over and above this, these nations have been placed at a disadvantage due to the fact that there is little scholarly and policy research on approaches for managing economic liberalisation and value chain development in the unique African context. As such, the central question facing these less successful cases is how they can integrate into the world economy whilst still fostering their general development and value chain development. This paper draws from quantitative questionnaires and qualitative interviews with 29 stakeholders in the Cotton-to-Clothing value chain in Zimbabwe. This paper examines the performance of firms in the value chain following its collapse in the wake of Zimbabwe’s uptake of economic liberalisation measures, and the subsequent local socio-economic development value that is generated by the revival of the cotton-to-clothing value chain. Firstly, the paper finds the relatively undocumented characteristics and structures of firms in the value chain in the post economic liberalisation era. Additionally, it analyses the internal and external business strategies undertaken by the closed, judicially-managed, and open firms in the value chain. The key findings show Zimbabwe’s way of balancing global-level value chain governance and local-level value chain architecture for a suitable and healthy value chain management strategy that begins to bear local value for socio-economic development. This analysis is used to make practical and policy recommendations on achieving this balance between the global and the local level, as well as recommendations for further academic research for how local value chains can develop in global markets without getting locked into them. This study adds a case to the small collection of academic evidence and policy recommendations for the challenges that African nations face when trying to incorporate into global commodity chains in attempts to benefit from their associated socioeconomic development opportunities.
Keywords- Cotton-to-clothing value chain, economic liberalisation, restructuring value chain,
Acknowledgements
Anyone that knows me, knows that I have an aversion to anything economically related, which is why I often laugh at my choice of thesis topic, and why I have to thank so many people for getting me through this process.
Firstly, I would like to extend my appreciation to all of the teachers and fellow students that I have had classes with at the UVA in the past two years. The concepts and skills that I have learnt in these classes have given me much more confidence and insight, not only as a student, but also as a twenty-something year old navigating this world.
I would like to thank Dr. Esther Miedema who taught me a course that gave me the ‘tricks of the trade’ on how to write a literature review, and helped me to place my research in the wider global context. Furthermore, I would like to thank Esther for taking them time and care in being my second reader.
To my advisor, Dr. Nicky Pouw, I would first like to extend my appreciation. You have inspired many of your students, myself included, with your ability to balance and execute the many different aspects of your full life (and to answer emails so quickly!). Thank you for taking me on (quite late) as a supervisee. Your support throughout this process, especially in light of some of the hardships I have faced with the COVID-19 crisis, has helped me to feel like more than just another student number at the UVA. Your academic guidance and encouragement has helped me in all of the aspects of this thesis from its conception to its execution.
To my research respondents, you epitomise the platitude “Zimbo’s always make a plan.’ Despite having been put through so much, thank you for reassuring me of the kindness of Zimbabwean people.
Lastly, thank you to my friends and family for your all of the study dates, conversations, and moral support thank you have shared. A special thank you to my little sister for being my messenger in Zimbabwe, whilst I was in the Netherlands. My heart goes out to my parents for the sacrifices that they have made for my education and their trust in the fact that I will always do my best.
Table of Contents
Abstract 2 Acknowledgements 3 Table of Contents 4 List of Acronyms 7 List of Figures 8 List of Images 9 1. Introduction 10 1.1. Background 10 1.2. Research Problem 11 1.3. Research Approach 12 1.4. Structure of Thesis 12 2. Theoretical Framework 13 2.1. Introduction 13 2.2. Literature Review 132.2.1. Economic Liberalisation in Sub-Saharan Africa 13
2.2.1.i. Positions on the Uptake of Structural Adjustment Programmes in Sub-Saharan
Africa 14
2.2.1.ii. Positions on the Outcomes of the Structural Adjustment Programmes 14
2.2.2. Industrialisation in Sub-Saharan Africa 16
2.2.2.i. Positions on the Uptake of Industrialisation in Sub-Saharan Africa 16 2.2.2.ii. Positions on the Outcome of Industrialisation in Sub-Saharan Africa 17
2.2.3. Problematising the Literature 19
2.3. Conceptualisation 20
2.4. Conclusion 22
3. Research Methodology 23
3.1. Introduction 23
3.2. Research Strategy 23
3.2.1. Ontological and Epistemological Positioning 23
3.2.2. Research Questions 24
3.2.3. Methodological Position 25
3.3.1.Research Procedure 26
3.3.2. Unit of Analysis and Unit of Observation 31
3.3.3. Sample 31
3.3.4. Fieldwork Details 32
3.3.5. Limitations and Quality Considerations 32
3.3.7. Ethical Considerations 34
3.4. Conclusion 35
4. Description of Local Context 36
4.1. History 36
4.2. Economic Context and Policy 36
4.3. The History of the Zimbabwean ESAPs and Cotton Sector 39
4.3.1. The Cotton-to-Clothing Value Chain 40
4. 4. Conclusion 43
5. The Cotton-to-Clothing Value Chain 44
5.1. Fragmentation 44
5.2. Power Asymmetry 47
5.3. Functionality 49
5.4. Conduct 52
5.5. Conclusion 54
6. Internal Business Strategies 57
6.1. Strategic Business Operations 57
6.1.1. Vertical integration 58
6.1.2. Operational Cost Management 61
6.1.3. Inventory Management 63 6.2. Production Management 64 6.2.1. Diversification 66 6.2.2. Modernisation 67 6.3. Employment Structure 71 6.3.1. Lean Workforce 72 6.3.2. Polyvalent Positions 73 6.2.3. Wage Structure 73
6.4. Relationship with Cotton Sector 75
6.5. Conclusion 76
7. External Business Strategies 80
7.1.1. Export Market Linkages 81
7.1.2. Domestic Market Linkages 83
7.2. Influencing Policy and Practice 84
7.2.1. Local Industry 85
7.2.2. Local Alliances 86
7.2.3. Local Training Programs 86
7.3. Collaborations 87
7.3.1. Governing Body 88
7.3.2. Peer Collaboration 89
7.4. Conclusion 89
8. Conclusion and Recommendations 92
8.1. Answer to Main Research Question 92
8.2. Theoretical and Conceptual Reflections 94
8.2.1. Theoretical Reflections 94
8.2.2. Conceptual Reflections 96
8.3. Methodological Reflections 97
8.4. Research Recommendations 99
8.5. Practical and Policy Recommendations 101
Bibliography 106
Appendices 113
Appendix I: Operationalisation Table 114
Appendix II: List of Respondents 116
Appendix III: Quantitative Questionnaire 117
Appendix IV: Stakeholder Analysis 119
Appendix V: Interview Protocol Open Firm 120
Appendix VI: Interview Protocol Closed Firms 122
Appendix VII: Layout of Framework Analysis 123
List of Acronyms
ACET African Centre for Economic Transformation
ACVAZ The Association of the Cotton Value Adders Zimbabwe
BCI Better Cotton Initiative
BWIs Bretton Woods Institutions
BCGA British Cotton Growing Association
C&T Clothing and Textile
CBD Central Business District
COMESA The Common Market for Eastern and Southern Africa
C2C Cotton-to-Clothing
(E)SAPs (Economic) Structural Adjustment Programmes
FDI Foreign Direct Investment
GATT Global Agreement on Trades and Tariffs
GVCs Global Value Chains
ITC International Trade Centre
SMEs Small and Medium Sized Enterprises
SSA Sub-Saharan Africa
VCM Value Chain Management
ZIM-ASSET Zimbabwe Agenda for Socio-Economic Transformation
ZIMPREST Zimbabwe Programme for Economic and Social Transformation
ZITMA Zimbabwe Textile Manufacturers Association
List of Figures
Figure 1. Conceptual Framework. 21
Figure 2. A Visual Model for Mixed Method Procedure Using
Sequential Exploratory Design. 30
Figure 3. A Stakeholder Map Showing the Position of Stakeholders
in the Zimbabwean Cotton-to-Clothing Value Chain. 45
Figure 4. Stakeholder Map Showing the Relationship Between
Stakeholders in the Zimbabwean Cotton-to-Clothing Value Chain. 50
List of Images
Image 1. A Newspaper Advert. 40
Image 2. A Newspaper Article. 41
Image 3. A Newspaper Article 31
Image 4. The factory shop and factory of a firm. 46
Image 5. The abandoned factory of a former garment manufacturing company. 47
Image 6. A manufacturing factory with water tanks installed. 61
Image 7. A dyeing machine that has been taken apart for parts. 62
Image 8. The cotton loom inventory for a garment manufacturer. 64
Image 9. The inventory room for a garment manufacturer. 64
Image 10. A firm that has diversified their product. 67
Image 11. A quality-checker checking the quality of workwear shirts. 68
Image 12. Stacks of treated cotton looms that have been through a quality check. 69
Image 13. A firm manager shows their embroidery machines. 70
Image 14. A manufacturing factory with empty sewing machines. 72
1. Introduction
1.1. Background
In its history Zimbabwe boasted a booming cotton industry that was not only rich in the financial value that it generated, but also in the socio-economic and developmental value that it added to the nation. As the international cotton industry has become increasingly globalised the organisational sophistication of this industry has concurrently developed, resulting in new opportunities and dynamics, such as the formation of industrial clusters and networks, new knowledge transfer, and more employment opportunities (Bair & Gereffi, 2001; Phelps et al., 2009). In the light of this, Zimbabwe, like many other Sub-Saharan African (SSA) countries, took steps towards opening themselves up to the global arena by undertaking economic liberalisation measures, most predominantly under the Economic Structural Adjustment Programmes (ESAPs) in the early 1990s. However, Zimbabwe was not immune to the fact that many Sub-Saharan nations did not yield the benefits that economic liberalisation and the ESAPs promised. Zimbabwe’s switch to economic liberalisation proved to be too much for a nation that had learnt to thrive in a fairly closed system. This, along with domestic issues, culminated into one of the most challenging economic and social periods in Zimbabwean history, that hit its crux in 2008 when Zimbabwe experienced crippling hyper-inflation and widespread industrial collapse.
The government took drastic measures to revive the economy in 2009, and thereafter, signs of stabilisation started to appear. The government made optimistic policy changes by approving a new constitution in 2013, and implementing a new Agenda for Socio-Economic Transformation (ZIM-ASSET) in the same year. As part of these actions, the government has placed a spotlight on the Cotton-to-Clothing (C2C) value chain, as they have identified it as a low-lying fruit and an inclusive sector that can act and a driver for socio-economic development with its ability to serve as a wide-reaching source of formal employment and income, as well as a source of
foreign exchange earnings. Zimbabwe is one of the first SSA nations to structure these intentions by initiating a cotton sector revival strategy in their five-year strategic plan for the Cotton-to-Clothing value chain (2014). The installation of such revival strategies has since been picked up in a number of other SSA nations in similar macroeconomic positions with similar development goals, such as Kenya, Uganda, and Tanzania.
1.2. Research Problem
These efforts to resurrect the cotton industries in these SSA nations, albeit commendable, beg the question of how these nations expect to experience success in doing so, considering the fact that the context of economic liberalisation that disrupted and disintegrated their industries still defines their macroeconomic structure. The focus on cases in SSA is of importance as in academic and policy circles, as well as in the international market, their experience is overshadowed by the successful trajectories of the East Asian and Latin American experiences with liberliastion and value chains. This research addresses these problems by analysing the case in Zimbabwe, a nation whose C2C chain has been heavily affected by economic liberalisation measures, and that was one of the first SSA nations to take steps towards C2C value chain resuscitation in the wake of this. Thus, this research is guided by the main research question:
How have firms along the Cotton-to-Clothing value chain in Zimbabwe performed in the post economic liberalisation era?
This research is conducted with the aim of critically questioning how the C2C value chain revival plans are taking place in the context of economic liberalisation, specifically regarding whether this facilitates socio-economic development. Furthermore this research adds to the knowledge about the liberalisation of SSA nations in global commodity chains and their unique contextually-based considerations in doing so. Academically speaking, this thesis adds to the small pool of literature concerning the failing of SSA nations in terms of implementing economic liberalisation measures, and the even smaller pool of literature on SSA efforts to re-engage with this economic model more successfully. In terms of policy and sectoral circles, this research analyses both the failed and successful strategies for resuscitating value chains, with
added attention to strategies that forge socio-economic development, thereby offering learning points that are fitting to the SSA context.
1.3. Research Approach
This research considers the changes in and performance of the Zimbabwean C2C value chain in light of the nation’s macroeconomic shifts under economic liberalisation measures. In investigating this, the research considers the factors that have led to the shutdown or judicial management of firms that could not cope in this context. Additionally, it considers strategies that have enabled other firms to remain in operation, paying specific attention to how their operations have been able to generate spillover effects within and along the chain that contribute to value addition and local-level, socio-economic development. The study is underpinned by a critical realist approach that allows for the explanation of the emerging social conditions of the C2C value chain in Zimbabwe in causal relation to underlying structures of economic liberalisation. In carrying out, this study utilises a mixed methodology with a sequential explanatory design that allows for apt quantitative and qualitative data collection strands to complement each other for a rich data analysis.
1.4. Structure of Thesis
The thesis begins with the theoretical framework in Chapter 2 that consists of a literature review and a conceptual framework on which this research study is based. Thereafter the methodology chapter, Chapter 3, elaborates on the research strategy, including the research questions, and the research design that guide this research study. Following this, the local context in which this study was carried out is contextualised in Chapter 4. Hereafter the paper analyses the research findings about the structure and characteristics of the value chain, and the strategies of the firms herein in Chapters 5, 6, and 7, respectively. This analysis provides the answers to the research sub-questions. The thesis concludes with Chapter 8 that answers the main research questions, provides theoretical and methodological reflections, as well as academic, and policy and practical recommendations for the future.
2. Theoretical Framework
2.1. Introduction
This chapter looks at the theoretical debates of the key concepts that arise when considering the research problem, and how these concepts can be mapped and understood within the frame of this research. This chapter starts with Section 2.2, a literature review that provides an overview and deliberation of the literature and theoretical debates surrounding the processes of economic liberalisation and industrialisation, particularly in Sub-Saharan Africa. Thereafter, Section 2.3. explains the conceptual framework that this thesis is based upon before Section 2.4. concludes the chapter.
2.2. Literature Review
I carried out a meta-narrative literature review to illuminate the debate and subsequent development of the main concepts and theory that pertain to this research, namely, economic liberalisation and industrialisation. By identifying the clashes and credence within and between these theories, the review elucidates on where points of dissension and knowledge gaps exist. Doing so aids in constructing the conceptual framework on which this study is based.
2.2.1. Economic Liberalisation in Sub-Saharan Africa
The empirical literature on economic liberalism has two sides to the coin, with those who advocate for the positive correlation between the nexus of economic liberalisation and economic growth, and those that look at economic liberalisation as being a responsible factor in the economic fragility of the Sub-Saharan African nations that have taken these measures.
2.2.1.i. Positions on the Uptake of Structural Adjustment Programmes in Sub-Saharan Africa
From the 1980s many African nations found themselves with unattainable debts both in their state budgets and their balance of payments. As influential observers at the time, the IMF and the World Bank assessed the African crisis and placed the blame for Africa’s persistent economic troubles on faulty policies taken on by their governments. The Bretton Woods institutions (BWIs) used this discourse to spread their liberalised agenda by imposing it on nations through policy conditionalities for those in need of lines of credit. These conditionalities meant that these nations would achieve growth led by the private sector and downsizing public expenditures, through a market-based system (Jaycox, 1989; Mehlum, 2000; Sundaram et al., 2008). By the late 1980s the SAPS gained credibility as the UNDP was reporting findings of growth and “a sense of solidarity” that correlated with these measures (Jaycox 1989: 37). Soon after, the SAPs were widely taken up across the African continent with 30 SSA countries adopting these adjustments between the years 1986 and 1992 (Nsouli, 1993: 21).
2.2.1.ii. Positions on the Outcomes of the Structural Adjustment Programmes
Years on, while some commend the SAPs for being useful in highlighting some macroeconomic aggregates, other commenters are skeptical of this development discourse, and consider the SAPs to have performed disappointingly (Siddiqui, 2015). These commenters argue that these policy changes did not come lightly as many countries restructured their entire economies to comply with the conditions. Public expenditures on health, education, and social sectors were often the first to dwindle in the light of this, with these cuts disproportionately affecting the poor (Reinhart & Tokatlidis, 2003; Akinsola & Odhiambo, 2017).
In a 1994 report the World Bank defended itself in saying that there has been an erroneous tendency to confound the effects of the failure of a nation to implement policy with the failure of the reforms themselves (cited in World Bank, 2000). However observers refute this defence in saying that comprehensive implementation of the SAPs was next to impossible given the fact they were based on ideology as opposed to scientific and contextual analysis, and thus
lacked the rigour to ensure that the context in many of the nations in which reform took place was initially not conducive to full uptake (Saha, 1991; Noorbakhsh & Paloni, 2001). Scholars state that the reasons as to why these nations had such adverse reactions to the economic liberalisation measures that they undertook under the SAPs can be explained with further inquiry into the theoretical underpinnings of the SAPs. The IMF policies were largely based on Polak’s model , and the World Bank’s policies are based on the Revised Minimum Standard Model ,1 2
both of which make assumptions that are not conducive to the African continent. Therefore, contrary to the claims of free trade for all, these policies did not offer a level playing field to developing nations. In fact, many commenters follow Chang’s (2003) concept of “kicking away the ladder” and highlight that these policies have shrunk the development space in these nations and have left them ‘hostage’ to international finance systems (Whalley, 2003; Stigitz, 2005; Reinhart & Tokatlidis, 2003; Sundaram and Von Arnim, 2008; Siddiqui, 2015).
Despite this, observers have noticed that the initial priorities of these policies have permanently narrowed the scope for national economic development policy initiatives. The idea that liberalisation is the path to growth remains the ‘conventional wisdom’ at the nucleus of policy making across the majority of the African continent (Stiglitz, 1998; Sundaram et al., 2013). Many of these nations rely on importing capital from abroad and are dependent on liberalisation to remain in international capital markets, and they therefore believe that there is still value in liberalising (Tereke, 2001; Reinhart & Tokatlidis, 2003). In the light of this belief, scholarship has turned to look at such suggestions for iterations of liberalisation that do not necessarily follow the priorities of the western-centric policies of the Washington Consensus
1Polak’s 1957 model that enables better insight into the fundamental structure of an economy.
However, this model had a western bias that underestimated the fragmentation in African markets, and the inflexibility in African economies that prevents them from being able meaningfully participate in the global economic arena (Ancharaz, 2003; Meilink, 2003).
2 The basic idea of the Revised Minimum Standards Model is that a country’s economy would
grow because of more capital accumulation from savings that could be invested in the production process and therefore increase the rate of output. This model was inadequate in the African context as it did not take into consideration the various distributional challenges in many African nations, such as infrastructural and institutional inadequacy, rent-seeking, consumeristic use of
(Tereke, 2001; Nsouli, 1993). Most of these suggestions include a consideration for contextual factors. For example, studies by Sachikonye (1995), and Misati and Nyamongo (2001:158) state that reform packages should carry out “managed financial openness.” This can therefore consider the concerned nation’s characteristics, and include contingency measures for the growth retarding contextual factors in an SSA nation, such as droughts.
2.2.2. Industrialisation in Sub-Saharan Africa
Conventionally speaking, the path of industrialisation and a switch to the secondary sector have been considered to play a prominent role in the economic development and general prosperity of a nation. With regard to developing nations, it was believed that it could transform economies from being low-productivity and low-growth to being dynamic and ‘modern’ (Haraguchi et al., 2017). As these notions have materialised and been tested there has been debate about the role that manufacturing and industrialisation can have in developing nations.
2.2.2.i. Positions on the Uptake of Industrialisation in Sub-Saharan Africa
Many developing countries have embarked on the path of manufacturing and industrialisation in order to reap the economic benefits associated with this trajectory. In the case of Sub-Saharan Africa, nations had built up modest manufacturing industries in the 1950s and 1960s under protectionism and policies of import substitution (Rodrik, 2015). At present day, when looking back at the industrial context in Sub-Saharan Africa, it has performed relatively poorly (Lall and Wangwe, 1998). Many of these nations have undergone what Rodrik (2015) describes as ‘premature de-industrialisation’ by which the hump-shaped relationship between industrialisation and income generation has not taken shape as in western nations . Despite this 3
unconvincing first attempt at industrialisation, many SSA nations renewed their endeavours towards industrialisation when they restructured their economies under the SAPs. At the start, this choice was lauded as ostensibly beneficial as, from the 1990s, these nations experienced higher export concentrations and related increases in their GDP. However, critics state that upon further inquiry this seeming success is surface level, as in many SSA nations a single
3In the case of SSA nations the hump shape has peaked lower and shifted closer to the origin of
primary-commodity product accounts for more than half of a nation’s total exports. Thus, these nations are still dependent on natural resources that have capital and technology intensive industries, and therefore that do not offer the widespread job creation and subsequent economic benefits that a diversified industry could. In the light of this, these critics have highlighted that the short-lived increase in GDP experienced in SSA has therefore not had a comparable impact on poverty reduction (Lall and Wangwe, 1998; Morris and Fessehaie, 2014).
2.2.2.ii. Positions on the Outcome of Industrialisation in Sub-Saharan Africa
Despite the reflection on this uptake of industrialisation, there is still no consensus regarding the future path for SSA nations. On one hand, the aforementioned poor performance has not deterred some academics and policymakers from saying industrialisation is the best, if not only, way that can enable Africa to eradicate poverty and achieve sustainable development (Moshi, 2014; Osei Opoku, 2017). On the other hand, some academics have come to view the manufacturing trajectory as fitting into an antiquated linear and western-centric mould for economic development (Krieger Mytelka, 1989; Saha, 1991). Separate to these opinions, other contemporary authors suggest that it is time to reassess the role that manufacturing can have for the economic development and economic policy in developing nations and thus reach a middle ground. Those of this inclination argue that the significance of the manufacturing sector as a driver for economic development is still relevant but that it has become concentrated in a smaller number of mostly Asian and Latin American countries. They therefore believe that newly manufacturing countries have to take on a path to industrialisation that is alternative to the traditional route (Haraguchi et al., 2017). More specifically, contemporary scholars and policy-makers that are looking at the position of SSA nations are increasingly challenging the conception of the mutual exclusivity of local clustering and participation in global value chains. They suggest a manufacturing trajectory that balances these options and allows the value chain to upgrade to a position whereby it can integrate on a global scale without having to ‘lock in’ into the global value chain (Guiliani et al., 2005; Humphrey and Schmitz, 2000 a and b). In following a path that achieves this balance, these nations can manage two concepts that are cited in contemporary literature as being important in the Sub Saharan case: value chain governance that
relates more to the global level, and value chain architecture which concerns a more local level (Mapanga et al., 2018).
Firstly, the concept of value chain governance is perceived to be important to achieve successful export-oriented industrialisation. With the liberalised policies of these SSA nations, their industrial development will have an outward and more diversified orientation. Thus, many of these industries will have interactions with Global Value Chains (GVCs). The term Global Value Chain has come to be understood as a set of different links for value addition, that can span different countries, and that consist of various activities that bring the product from its conception, to making it up, to its delivery to the final consumer, and even to its disposal (Kaplinsky and Morris, 2000). Engaging in GVCs will be valuable in the case of SSA, as it will drive these nations in the direction of diversifying and extensifying their commodities and engaging with the global market (Mapanga et al., 2018). However, academics flag that due to the broader scale of GVCs, incorporation into GVCs has the potential to place an additional burden on these developing nation, such as changes in the competitiveness of their value chain, or changes in their value chain efficiency that will affect the quality, availability, and price point of goods and services (Kaplinsky and Morris, 2000; McCormick and Schmitz, 2002; Altenburg, 2006). Therefore, academics emphasise that SSA nations need to take care with regard to their value chain governance. According to Humphrey and Schmits (2002a: 4) value chain governance implies that “some firms in the chain set and/or enforce the parameters under which others in the chain operate … governance refers to the inter-firm relationships and institutional mechanisms through which non-market … coordination of activities in the chain is achieved.” Thus, in order to increase the likelihood of the benefits of integrating into GVCs, the SSA nations should avoid a rapid and sweeping exposure to the international arena, and instead they should carry out their integration with improved government capacities in the role of broker, as well as combined with policy reform that brings a more gradual liberalisation (Lall and Wangwe, 1998; Morris and Fessehaie, 2014).
Secondly, academics believe that SSA nations should focus on their value chain architecture, as they state that Africa is currently in a structural deficit following over three decades of deindustrialisation and a dependence on natural resources. Without structural change any growth momentum that these nations experience will not be able to drive them to the point of reaching middle income status in the global arena (Page, 2012; Mapanga et al., 2018). An approach by which this can be achieved is through Value Chain Management (VCM) which acknowledges “the primacy of cooperation over competition in the management of business in the efficient global markets … to achieve competitiveness through the efficient and effective addition of consumer-recognised value at every stage along the production pipe-line” (Mapanga et al., 2018: 23). By focusing on the local value chain, the shift in emphasis from international trade to domestic production will encourage economic planners to integrate value chain linkages into a coherent input-output matrix that is compatible with domestic resources and domestic needs. Scholars posit that VCM will generate the forward and backward linkages that will incite structural change. Forward linkages can instigate the creation of higher export revenues and the generation of foreign exchange. Backward linkages can promulgate the diversification of skills development and technological advancement abilities. Additionally, these ‘spillover effects’ would be to generate indirect and direct employment opportunities. Thus, these ‘spillover effects’ or linkage development to commodity sectors, is a viable means of achieving this next wave of industrialisation and subsequent general development (Morris and Fessehaie, 2014; Signe, 2018).
2.2.3. Problematising the Literature
In contemporary times we have been moving in the direction of increased globalisation and concurrently unprecedented levels of economic openness. While we know this to be true, academics and policymakers highlight the fact that this process is gradually slowing and some nations have been left behind. Despite this, when looking at the meta-narrative in the literature, there are still two converse schools of thought regarding the economic liberalisation and industrialisation: those that argue that the neoliberal economic system is beneficial for all, and those that highlight the difficulty for most developing nations to get into a position in which they
can access these benefits. Between these two extremes, some academics have begun to explore the gap that lies in the middle ground between them. This is done by involving these developing nations in these global processes but emphasising the fact that given the varying geographical locations and their accompanying resource endowments, as well as the different social and economic histories of African nations, these nations need a more bespoke means of enabling their spillover effects for value adding (Morris and Fessehaie, 2014). Thus, liberalised SSA nations will have to strike the balance in their value chain between local coordination and global competition. The gap herein lies in the understanding and development of the local inter-firm linkages and international governance in a nation, and consequently allowing the policy space to form a multifaceted approach to industrialisation that not only overcomes market failure but allows for the benefits of economically liberal practices to be reaped. Furthermore, although in recent years more contemporary scholars have sought to focus on the African perspective, Morris and Fessehaie (2014) emphasise the fact that the literature lacks an African perspective. Based on this, there lies a further issue in the lack of differentiated perspectives that better represent the vastly different national economies in Africa.
2.3. Conceptualisation
This research is based upon the conceptual scheme in Figure 1. The scheme highlights the main concepts and the relationships between them that will be the focus of this research. The orange circles indicate which research questions certain concepts and their relations pertain to, thereby further indicating how the conceptual scheme relates to the research.
The orange circle labelled ‘1’ looks at the relationship between the impacts of economic liberalisation and the performance of the Zimbabwean C2C value chain.
The orange circle labelled ‘a’ is placed next to the box that represents the C2C value chain as it looks at the changed structure and operation of this chain (marked in yellow) as it exists within the macroeconomic structure of economic liberalisation that encapsulates it (marked in blue). The ‘textiles’ and ‘clothing’ firms are in bold as this is the portion of the chain that the fieldwork focuses on.
The green box represents the effects of economic liberalisation on the structure of the C2C value chain. The orange circle that is labelled ‘b’ looks at the relation of this to firms that have closed down, which occurs as a result of individual, community, or institutional variables, or a combination of these. The orange circle ‘c’ looks at the relation of this dynamic to the firms that are still in operation, based on their internal business strategies, or their external business strategies, or a combination of these.
The orange circle ‘d’ links the operating firms to the inter-firm dynamics in the C2C value chain as it looks at the ability of firms that are still in operation to form spillover effects in the form of backwards and forwards linkages in the context of economic liberalisation. This therefore looks at the intersection of the value chain management on the local level and its value chain governance on a more global level.
2.4. Conclusion
Where some scholars remain pessimistic about the SSA region's engagement with industrialisation in the context of economic liberalisation, more recently scholars have begun to cautiously posit alternative ways in which this can be carried out successfully. With this more moderate approach being fairly novel, there is a lack of research on the approaches that can be applied to the variety of economies and industries in the SSA region. As a result of this, there are few information sources that facilitate a better understanding of the regional problem of using economic liberalisation to foster industrialisation, and thereby facilitate general development. This research contributes to this knowledge gap by studying the structure of the Zimbabwean value chain in the economic liberalisation context, thereby adding to the repository of SSA cases, as well as providing information and insight regarding SSA industrialisation and liberalisation trajectories.
3. Research Methodology
3.1. Introduction
The C2C value chain is multifaceted and therefore the research combines various fields in its aims to understand this chain. It is important to have a clear understanding of the research strategy that will be undertaken in doing so. The following chapter sheds light on the assumptions and decisions that I have made in designing and conducting this research. Firstly, Section 3.2. explains the research strategy which entails the chosen research positioning and approach, as well as the rationale behind this approach. Thereafter the research design will be elaborated on in section 3.3. by sharing the methods, field study details, quality criteria, and ethical considerations of the research. Finally the chapter is concluded in section 3.4 that summarises the chapter.
3.2. Research Strategy
3.2.1. Ontological and Epistemological Positioning
In terms of the positionality of the research, this research follows the critical realist paradigm. A key feature of critical realism is what Bhaksar (2014) has called ‘the epistemic fallacy’ which is critical of the tendency to couple ontology and epistemology, and thereby critical of our tendency to confuse that which exists with the knowledge that we have about it. In following the philosophy of critical realism, I take a realist ontology, that seeks to inquire about the nature of a reality that exists, and a relativist epistemology that believes that there is no way of knowing things except via historically transient descriptions.
Critical realism believes in the existence of mechanisms that combine and create something new in the process of ‘emergence’. It believes that based on observed phenomena, the underlying mechanisms and the internal relations between them might be discovered and show how they shape an outcome. This research uses this belief to guide its discoveries of the
macroeconomic mechanisms, as well as the internal value chain mechanisms, that have shaped the outcome of the performance of the Zimbabwean C2C value chain in the context of economic liberalisation.
In engaging with this process of emergence, it is important to maintain that context has an influence on how these mechanisms manifest empirically (Eastwood et al., 2014). Critical realists are not ultimately concerned with identifying the lived experiences of social actors or making discoveries that are generalisable; but they ultimately wish to develop a sound understanding of matters (McEvoy and Richards, 2006). The axiology of this research therefore stems from a desire to obtain a better understanding of the research topic in order to present research that acts to explain the current context in the Zimbabwean case, and that might be useful for uptake, such as in strategic plans.
The research methodology assumes a judgmental rationality, which is a tenet of the critical realist paradigm. Under judgemental rationality, the goal of the research should be to establish a relatively stable description or explanation that provides a plausible model for the object of inquiry (Archer et .al, 2016). Thus, the approach of the research is abductive, as it will deductively use theory as a starting point in order first to find the knowledge gaps to guide the research and to help in identifying patterns in the research, and then to inductively use these findings of the study to construct knowledge on the value chains in Zimbabwe that is useful for other SSA nations.
3.2.2. Research Questions
The main objective of the research is to answer the question:
How have firms along the Cotton-to-Clothing value chain in Zimbabwe performed in the post economic liberalisation era?
In order to answer this question, the study looks at the structure and state of the firms and the value chain in this context of economic liberalisation, specifically paying attention to whether the chain is able to tap into its potential to make socioeconomic development contributions through
local value addition. Thus, following sub-questions guide the exploration of the main research question.
a. What are the structure and characteristics of the Zimbabwean Cotton-to-Clothing value chain following its economic liberalisation?
b. Why have some firms undergone closure or come under judicial management in the post economic liberalisation era?
c. Why have some firms been able to stay in operation in the post economic liberalisation era?
d. Are firms able to have spillover effects of value-adding for Zimbabwe in the context of economic liberalisation?
These research questions were operationalised using the concepts of ‘value chain factors’ ‘performance’ and ‘spillover effects’ as can be seen in Appendix I.
3.2.3. Methodological Position
Mixed methods are used throughout the research, from the data collection phase to the data analysis phase. The definition of mixed methods that this research refers to is, “A procedure for collecting, analysing, and ‘mixing’ or integrating both quantitative and qualitative data at some stage of the research process within a single study, for the purpose of gaining a better understanding of the research problem” (Ivankova et al., 2006: 3). The rationale behind a mixed methodology in the context of this research spurs from the critical realist perspective that suggests that the choice of methods should be chosen based on its suitability to the research problem (McEvoy and Richards, 2006). Thus, mixed methods have been chosen based on their utility to best answer the research questions, thus creating a robust research outcome. Mason’s (2002) approach to qualitative research has been used to identify the most suitable research method for each sub-question. This approach showed that the first question, which was more descriptive, would benefit from the use of quantitative methods, and the following questions, which were more explanatory, would benefit from the use of qualitative methods. These methods thereby follow the ‘complementary argument’ for using mixed methods, as they use the strength
inherent to both methods to achieve the most suitable means of answering the research questions (Johnson et al., 2007).
This mixed methods research takes on a ‘fixed design’ in order to gather and compare the data within the relatively short three month time frame that I had allocated. Furthermore, in designing the research, a ‘typology-based’ approach is taken as it provides a set research plan to be accountable to, again making the research more feasible in the allocated time frame (Creswell and Plano Clark, 2017). In line with this approach, the mixed methods strands are implemented in a sequential fashion. Therefore, the core design of this mixed methods research is sequential explanatory design (Ivankova et al., 2006). This design is carried out by starting from an extensive perspective and zooming in to a more intensive perspective. Extensive methods, in the form of stakeholder analysis are used to provide an impression and understanding of the structure and the characteristics of the value chain. As such, the quantitative data and its analysis will contribute in a general understanding of the research topic. Following this, an intensive perspective in the form of interviews, is used to provide elaborative insights into the research questions. This qualitative phase is used to go into detail about the dynamics regarding the value chain that have been highlighted by the quantitative phase. As such, of the two strands, the second strand of research will be weighted more, as this is the part of the research that will provide the explanations that are needed to answer the main research question. (See Figure 2., N.B. “QUAL” is capitalised to show that the qualitative stage is weighted more).
3.3. Research Design
3.3.1.Research Procedure
Step 1I designed and implemented the quantitative phase. This phase aided in answering the research sub-question a., and in informing sub-question d.
First the quantitative data collection was undertaken. This was done using the stakeholder analysis method. This method originates from the organisational and behavioural sciences “to identify and assess the importance of key groups of people or institutions that might have a significant influence on the success of a research project” (Daniel & Horsburgh, 2009: 2501). This method was adapted for a development studies context to look at the stakeholders with an influence on the Zimbabwean C2C value chain. The aim in doing so was to get a strategic idea of the human-institutional landscape and the relations herein.
I identified eight key stakeholders in the C2C value chain. This list was composed of representatives of firms in the chain as well as experts situated outside of the chain (see Appendix II). I designed and implemented a standard interview questionnaire that was used to interview stakeholders (see Appendix III). The questionnaire consists of closed questions that are based on the influence over the value chain, and the contribution to socio-economic development that the stakeholders have.
Data Analysis
I carried out the quantitative data analysis in which the stakeholder positioning and interrelations were allocated based on the data collected (see Appendix IV for stakeholder analysis). I plotted this onto two stakeholder maps. The first of these maps the positions of the stakeholders in the value chain. According to the methods of a stakeholder analysis these positions are divided into 4 quadrants that describe the relational meaning of their positioning, namely, whether they are the ‘key players’, ‘subjects’, ‘crowd members’, or ‘context setters’ (see Figure. 3.). The second of these maps the relationships between the stakeholders (see Figure 4.). The result of this is stakeholder analysis is a coherent representation of the state and dynamics of the value chain as it exists today. (See Figures 3. and 4.).
Step 2
I analysed and evaluated this phase and used the understanding of the stakeholder relationships that I had gained to help in the preparation for the qualitative research phase. I was also able to use this process to identify some of the respondents for the qualitative phase of the research. The remaining respondents were found through a combination of snowball sampling
and selecting suitable respondents from the C2C directory (See Appendix II). I developed two interview protocols based on the concepts, dimensions, and variables highlighted in the operationalisation table. One interview protocol was for interviews with representatives from firms that have undergone closure or judicial management, and the other interview protocol was for interviews with representatives from firms that are still in operation (see Appendices V and VI).
Step 3
I implemented the qualitative data phase. This phase helps in answering sub-questions b, c, and d.
Data Collection
I collected qualitative data in the form of individual, in-depth interviews with the selected representatives of the participant firms. The motivation for using in-depth interviews was to allow the research questions to be addressed in a way that provides a sound understanding of the answers to the questions. The interviews were semi-structured and, as such, they followed a standard interview protocol, however I remained open to additional comments and questions from the participants and I made appropriate changes to my interview protocol and operationalisation table. As well as the interviews, in most cases I got a tour of the operations of the respondent’s firm. Whilst on these tours, the respondents and I would see and discuss details of the business, and as such, these tours acted as an adapted form of participant observation. This is a qualitative method with roots in traditional ethnographic research in which I observed the study community’s activities. In some cases I made field-notes, which are objective accounts and observations, following the tour in order to note my impressions down (Mack et al., 2005). Additionally, where it was possible, I took photographs of the operations as a means of gathering visual data to supplement my impressions and understandings of the textual information gathered. Lastly, in order to seek more archival information, I went to the Zimbabwe National Archives where I was able to obtain some quantitative textual data that are further used in contextualising the country context and supplementing some points in the analysis.
Data Analysis
I transcribed the interviews, and labelled and attached the photographs and field-notes to the associated transcriptions. The transcriptions were coded using Atlas.ti. I based the qualitative analysis on the tenets of ‘framework analysis’ (Furber, 2013). In following the critical realist approach, the coding process was abductive and identified emergent themes and sub-themes. However, in order to conduct coding systematically I mainly followed the deductive principle which was guided by the research questions, the conceptual scheme and the operationalisation table in order to give a sense of direction to the coding process. Thereafter, I allowed emerging themes to be included through inductive practices (Saldana, 2016). These codes were used to create a framework analysis table which allowed me to highlight, link, and organise the themes that were found within the data to have them ready for application in the discussion (see Appendix VII).
Step 4
I combined all of the data that I had collected to help in answering the main research question. The interpretation of the quantitative and qualitative data phases were carried out in relation to one another. From the interpretation and evaluation of this, I was able to formulate the analysis section of the research that is presented in Sections 5,6, and 7.
3.3.2. Unit of Analysis and Unit of Observation
The research looks at how firms along the C2C value chain in Zimbabwe have performed in the post economic liberalisation era. Thus, the unit of analysis is the performance of the cotton value chain in economic liberalisation, and units of observation are the firms along the value chain that have come under closure or judicial management, as well as the firms along the value chain that are still in operation.
3.3.3. Sample
This research has three sample groups, namely:
1. Quantitative phase: Key stakeholders including managerial representatives from firms along the entire value chain and external experts of the value chain;
2. Qualitative phase A: Managerial level representatives of firms that have closed down or come under judicial management.
3. Qualitative phase B: Managerial level representatives of firms that are still in operation.
For the sample group 1, I gathered data from eight representatives of participant firms across the C2C value chain. Additionally, this sample group includes key experts with an indirect link to the C2C value chain, such as a representative of the Association of the Cotton Value Adders Association (ACVAZ). In order to select these participants, I first chose the five main categories in the value chain that I wished to speak to representatives of, namely from cotton farming, ginning, spinning, textiles, and clothing. In most cases the category in the value chain had a representative body, for example the manufacturing category has a Zimbabwe Manufacturers Association. In the cases in which there was not a representative body present, I asked the representatives that I had already spoken to for recommendations on who to contact. Taking a wide sample from across the value chain facilitates the aim of the first sub-question in understanding the structure and characteristics of the entire value chain as it exists in a post economic liberalisation setting. The sample groups 2 and 3 were treated relatively similarly to one another; the difference between the groups being that they received different interviews
based on the status of their firm’s operations. I conducted 21 semi-structured interviews with these sample groups and by the end of the fieldwork period I had reached the ‘point of saturation’ of the information gathered from the interviews (Bryman, 2012). I first sought the representatives interviewed in this qualitative phase of research by focusing on firms in the textile and clothing part of the value chain. I chose these two key groups of the value chain in order to facilitate the feasibility of the research given the allocated time frame, as these sections of the value chain are predominantly found in the fieldwork location of Harare, Zimbabwe. The sample includes firm representatives from the managerial level or above, as these individuals are the most well-versed in the operations and objectives of their respective firms.
3.3.4. Fieldwork Details
The data collection took place in Zimbabwe and the data analysis took place in the Netherlands. The fieldwork was carried out over the course of about three months with the quantitative phase taking place from July to August 2019 and the qualitative phase mainly taking place between December 2019 and February 2020. The fieldwork primarily took place in the capital city of Harare as this is where the majority of the firms in the textile and clothing portion of the value chain are located at present day. However, a key firm is located in Kadoma, a town 131 kms from Zimbabwe and so I took a day trip to their premises for an interview and tour.
3.3.5. Limitations and Quality Considerations
The research has been designed to keep in mind its feasibility in the allotted time frame. In order to maximise the amount of time for research and potential setbacks once in the field, I contacted and scheduled appointments with as many of the participants as possible before arriving in the field.
The feasibility of the research was hampered by the fact that at the time of the research Zimbabwe was undergoing a fuel crisis. This limited my mobility as well as the mobility of the respondents. In the cases of firms that had more remote locations, this meant that I would have to meet the respondent in a convenient meeting location and therefore prioritise the interview with the firm representatives over taking a tour of the firm.
Despite the above limitation, I took measures to ensure the quality of the research. Due to the fact that qualitative data weighs more heavily in this study, the methodological quality of the research has been assessed using a criteria with qualitative emphasis. This study follows the quality criteria of research according to Guba and Lincoln (1994, cited in Bryman, 2012: 390). As such the research quality criteria seek to achieve trustworthiness and authenticity.
The criteria for trustworthiness that the research engaged with are credibility, transferability, dependability, and confirmability. In order to achieve credibility, I sought to get
consensus on the understanding of social reality. In order to do so, I ensured
respondent-validation either via email or vocally on the phone in order to confirm that I had a sound understanding of the data collected. In order to achieve transferability, the research findings need to be transferable to another milieux. One way in which Guba and Lincoln believe that qualitative research can achieve transferability is through Geertz’s (1973) thick description as this provides fellow researchers with the database by which they can make judgments for transferability. In order to add a thick descriptive element to this study, I used multi-methods in the quantitative strand of the research, thereby adding descriptive elements. Dependability in research concerns establishing the merit of the research. In order to have dependability regarding this study, I have taken an auditing approach to the process of this study, and have kept records of the stages of the research to act as an auditable trail. Lastly, confirmability in research entails that the researcher has acted in good faith. In terms of the confirmability of the research, I aimed to remain conscious of my positionality through the various stages of the research to prevent personal value or theoretical implications from meddling with the research process and outcome.
Three of the five criteria for authenticity are relevant to the research, namely: fairness, educative authenticity, and ontological authenticity. Fairness aims to fairly represent the different viewpoints among the members of a particular social setting. I aimed to achieve fairness by engaging with the respondents from across the C2C value chain, as well as those external to the chain, in order to represent different viewpoints. Educational authenticity involves getting members to gain an appreciation of the perspectives of their peers. In exploring and sharing the aforementioned different perspectives, the study aims for educational authenticity. Ontological
authenticity involves aiding members to reach an understanding of their social circumstance. Through the in-depth discussions that were had with many of the interview respondents, and through the outcome of the study, I aimed to provide members of the value chain with a better understanding of their social milieu and thereby achieve ontological authenticity. The other two criteria, namely: catalytic authenticity and tactical authenticity are not currently relevant to the nature of the research as they involve more activist-type responses.
3.3.7. Ethical Considerations
The research looks at the performance of various firms that are involved in the C2C value chain. The first potential issue is that the research enquires into the structure and management of the participant firms and this holds the risk of probing into sensitive business information that some firms may be uncomfortable sharing. Secondly, the nature of some of the research questions involves reflections on external business interactions, for example, with the government. The political atmosphere under the Mugabe regime was one of heavy censorship, which has led to a general apprehension amongst Zimbabweans of speaking to journalists and researchers. Although this has largely subsided since President Mnangagwa came into power, I anticipate the potential that this attitude might still be ingrained in the participants. In order to account for these potential hesitations, prior to all data-gathering I specified that the participants need not answer the questions that they are uncomfortable with. Additionally, I have maintained the confidentiality of participants by anonymising information such as their names, and the firms that they work for through codes so that they are not traceable through the research paper. Furthermore, any photographs taken have been approved by those that are potentially recognisable in the photograph. For those that wish to remain anonymous in the photographs, the photograph has been taken so that it does not contain telling identification elements such as people’s faces, or brand logos. The option of anonymity was made clear to the participants at the start of the data collection. Moreover, I ensured that the participants were sure of the fact that the research is based on voluntary participation and that they have the right to end their participation and request that their data be deleted at any given point in the research. I provided the participants with my contact information to allow the participants to contact me in the event that
there is a need to do so. The participants were asked to sign two copies of a written consent form that includes the aforementioned points, with one copy for myself and the other for the participants to keep for themselves.
I am a third party person in relation to the participants which places myself as an outsider to the community that I am engaging with. Additionally, I am a female of a relatively young age (24 years old) and in some contexts, particularly if the respondent is an older male, this could create situations in which power imbalances arise. In the light of this, I made efforts to note the respondent’s positionality throughout the research so as to maintain the comfort of the respondents, to facilitate mutual respect, and to inform any bias that might enter the research process.
3.4. Conclusion
The C2C value chain spans many sectors and the study of this value chain engages with it, both in terms of its structure and its function. In order to tackle these aspects of the research goals I have chosen to position the research from the critical realist approach and take on a mixed method methodology. In order to ensure that this research strategy is carried out suitably, I have taken many steps to design and implement a mixed methodology research design in order to achieve a sound and representative study.
4. Description of Local Context
This chapter describes the most relevant aspects of the local context in which this study was carried out to help to contextualise the state of the C2C value chain at present day. Firstly, Section 4.1. provides a brief political history of Zimbabwe. Thereafter section 4.2. elaborates on the recent economic history in Zimbabwe, highlighting the hyper-inflation and dollarisation that have molded the present day business environment. Lastly, Section 4.3. describes this history of Zimbabwe’s C2C value chain, with attention to the role of Zimbabwe's economic liberalisation, particularly the structural adjustments that they undertook before it concludes with Section 4.4. that highlights the position in which Zimbabwe currently finds itself.
4.1. History
Zimbabwe, formerly known as Rhodesia, gained its independence from British rule in 1980. Robert Mugabe became the Prime Minister of Zimbabwe in 1980 when his party, ZANU PF, won the vote against the British rule. Mugabe was made president in 1987 and became the country’s only ruler until his forced resignation following a military coup in 2017. The ZANU PF Vice President, Emmerson Mnangagwa, took over following the coup, and went on to win the presidential election in July 2018 by a very close margin (CIA, 2019).
4.2. Economic Context and Policy
Zimbabwe’s economic downturn is usually dated back to the 14th of November 1997. This is the day that the Zimbabwean dollar collapsed spectacularly as a result of heavy fiscal discipline in the form of stabilisation packages following IMF money lending, and the ripple effects of the Asian crisis (Makina, 2010). Shadowing this plunge was the deterioration of the rule of law in Zimbabwe. This includes human rights violations, electoral malpractice, state-sanctioned farm invasions of more than 3000 farms, and the unauthorised spending of the national budget for partisan matters (Globalisation Institute, 2011; Mugumisi, 2014). These actions compromised Zimbabwe’s relations with western nations as they placed sanctions on
Zimbabwe and discontinued their balance of payment support (Mugumisi, 2014). With the consequent cutbacks in Foreign Direct Investment (FDI) and being segregated from their usual investor and donor base, Zimbabwe looked to alternative economic partners, including Libya, Iran, India, and China. A notable outcome of this is Zimbabwe’s ‘Look East’ Policy that is a strategy to strengthen its ties with China. This new orientation has incited structural change in many parts of Zimbabwean society, including infrastructural investments, and the most relevant to this study: the influx of cheaper and second hand goods that have flooded Zimbabwean markets (Mugumisi, 2014; Makasi & Govender, 2015). The low prices of these goods have enhanced the accessibility of such goods for the majority of the population whose purchasing power was weakened by the economic crises. However, on a macroeconomic scale these imports are proving to be destructive for the long term health of the Zimbabwean economy. The preference for imports has exacerbated the already worsening foreign currency shortage in Zimbabwe, it has added to the nation’s falling GDP and employment rate, and contributed towards trends of de-industrialisation (Mugumisi, 2014; UNCTAD, 2016).
The culmination of these factors has given rise to a socio-economic meltdown. In a decade from when the downturn began, Zimbabwe’s GDP had cumulatively declined by 54 percent and they had become one of the worst performing economies in the world (Makina, 2010; Globalisation Institute, 2011). This crux of this was the hyper-inflation that the IMF has estimated to have peaked at 489 billion percent in September 2008, with some independent analysts estimating it to have been much higher (IMF, 2009; Globalisation Institute, 2011). This economic crisis had a large human cost that was extensive in its reach, including an unemployment rate above 90 percent, a drop in the average life expectancy to 35,5 years old, and a brain drain with the migration of over 3 million Zimbabweans. Hyper-inflation has also adversely affected the local business environment, most noticeably as the prices of goods doubled frequently, and businesses were therefore forced to revise their prices several times per day. Furthermore, the aforementioned precariousness of social condition resulted in a declining productive base, and a resultant contracting revenue base, which led the state to reduce its spending on public services, such as education and health. This has indirect impacts on the
