The Failure of Institutions

Successful countries all over the world are built on strong institutions of all kinds. We often assume that the failure of the State in Zimbabwe is solely due to poor government policy and management. I do not think so – the malaise is much wider and involves many different local institutions, some with a proud tradition and record in the past.

The first of these failures are the many organisations that represent sectoral interests and are meant to act as lobbyists and protectors of the essential interests of the companies in the sectors they represent. The main ones are the Confederation of Industry (CZI), the Chamber of Commerce (ZNCC), the Farmers Unions and the Chamber of Mines.

As an economist and then as the CEO of a major agribusiness enterprise I had to deal with the Farmers Unions – more specifically the Dairy Producers Association and the Cattle Producers Association – both part of the Commercial Farmers Union. Of all the institutions representing sectoral interests the CFU, in my own view, was the best managed, funded and led. They were a very powerful lobby and no one concerned with matters to do with the farming industry could ignore them. If they did it was at their peril.

After I left the agricultural industry in 1988 and then went into the private sector I joined CZI – rising to the position of Vice President before I left to join the political game in the MDC in 1999. Again I found that CZI, representing industry, was a powerful organisation – well led and managed although not on the scale of the CFU which was in a league of its own.

But all these institutions have become victims of the political culture and practices of Zanu PF, like the coils of a large python they have been gradually taken over by politically linked individuals and co-opted into the State system of patronage and loyalty to the ruling Party no matter what. As a result they no longer can represent the real interests of the companies in their sectors and instead have become just an extension of a corrupt and incompetent State system. In consequence they have failed and become dysfunctional.

The fate of the CFU was sealed when the State systematically began to dissemble the base of the whole industry – the commercial farm based on freehold title rights. Recently I have had a lot to do with the Chamber of Mines and have not been impressed – they fail to represent the interests of their companies and instead have become a club of senior managers (not owners) who look after their own as against their company’s interests. They are often appointed because of their political connections and influence. This whole system tells investors that you can only survive if you pay your dues to powerful elites who are only concerned with power, influence and self interest.

Then there is the failure of the Trade Unions to truly represent their member’s interests. I have little doubt that one of the major benefits of independence in 1980 was the establishment of links to the global labour movement and in particular the ILO. Trade Unions in mainly Western Europe supported the labour movement in Zimbabwe, overcoming the negative influence of the State which both before and after independence had pursued policies that were designed to curb the influence of the Unions and limit collective bargaining.

In 1980 there were a handful of Unions, the largest of which was the Mineworkers Union, by 1997 there were over 60 Unions with a membership of 500 000. Only the Unions had the capacity by 2000 to take on the Zanu PF regime and they did so in the form of the MDC which rapidly emerged as the first serious threat to the Zanu PF grip on power.

So long as they did not threaten the State, the Unions were tolerated. Once they decided to take on the State in the interests of their members, they quickly became enemies of the State and the State began to systematically dismantle the structures of the Unions focusing in particular on the Congress of Trade Unions (ZCTU). Today the Unions are a shadow of what they were in 2000, battered by direct and indirect attacks and subversion and of course undermined by the collapse of the economy. When I was Chairman of the Industrial Employers Committee of CZI we dealt with 38 Unions and over 300 000 workers. I doubt if industry has 60 000 employees today.

The institutions that were created to facilitate dialogue and consensus and to assist the State with policy formulation have totally failed to achieve their stated goals. No one pays any attention to the Kadoma Declaration or the grand sounding Tripartite Negotiating Forum. This is no surprise given the failure of the institutions that are meant to be the constituting partners in the TNF.

Then there is the failure of institutions created to deal with specific issues – the National Social Security Authority (NSSA), the Tourism organisations (ZTA), the Trade Promotion Agency (Zimtrade).

NSSA had a gross income of $300 million in 2012, every formal sector employee is obliged by law to become a member and pay a set contribution to the Authority every month. NSSA was formed in 1987 and over the past 27 years it must have received no less than $8 billion in contributions. Of all that money only some $800 million remains – the rest squandered in bad investment decisions, patronage linked activities and theft.

The NSSA has failed totally in its stated role as the basic provider of social security. When I retired after paying into NSSA for almost all the 27 years of its existence, I did not even get an acknowledgement and receive nothing in the form of a pension. In any event what they do pay is so small that it’s hardly worth the effort.

As for Zimtrade – when last did you ever hear of that organisation? What on earth does it do? I was partly responsible for setting it up but like NSSA, we regret the decision and the organisation has become just another failed institution that absorbs resources and contributes little except jobs for the boys.

We need strong institutions that are independent and professional. Led by people who have their real interests at stake, owners rather than managers. They must be well managed and able to attract the best management that is available. They must fight for the interests of their members and industries and be feared and respected as lobby groups. This requires that the State itself allows this situation to emerge and for these institutions to take on a life of their own. It also requires that the State listens and acts on what these organisations say.

Eddie Cross
Harare 5th April 2014