Lessons from Rhodesia’s import substitution 

Source: Lessons from Rhodesia’s import substitution – NewsDay Zimbabwe

By Vince Musewe
Leadership integrity, accountability and delivery were at the centre of the success of Rhodesia’s import substitution strategy.

I have no doubt that the name Rhodesia and what it stood for remains offensive to most of us blacks. It hangs like a nightmare in our brains because of what it did, especially to our fore fathers and those who perished fighting for our freedom. Racism and racial discrimination remain an obnoxious and indefensible evil which can never be defended.

However, it is to our advantage to learn from our past, regardless of the context and objectives of the actors who created it. After all, as Karl Max once noted that men make their own history, but they do not make it as they wish, it remains educated by and predisposed to the past and that is one thing we cannot change.

Rhodesia faced serious sanctions, but the country rapidly developed notwithstanding.  During Unilateral Declaration of Independence (UDI) Rhodesian list of import substituted goods increased from 300 to 6 000 products. We must learn from that.

I want here to force our minds to appreciate how Ian Smith reacted to those circumstances and why he was successful in developing the productive capacity of a country isolated by the international community, but continued to have a strong currency and was a net exporter of food.

It is an open secret that Zimbabwe has all it needs to develop and yet we continue to complain about how sanctions are preventing that. In my opinion, it is not the issue of sanctions that is our problem (real or imagined), it’s our response to our problems that continues to hold us back and disempower us in coming up with our own solutions.

I think that the main reason why Rhodesia’s self-sufficiency developed rapidly during its import substitution programme was the discipline and integrity of its leadership; racist they were, but here I want us to learn from the enemy.

Smith was certainly not in it for the money or accumulation personal wealth. He truly believed in the national cause. Although a misguided racist, he was dedicated to his country to the bone. He was not greedy nor did he pursue personal wealth accumulation as is the case with our current political leadership. The preservation and development of the idea of Rhodesia came first and all State enterprises and institutions were established and competently managed only to meet that end. There were not a feeding trough for relatives and clansmen.

Our first lesson is that, leadership integrity and accountability were at the centre of the success of Rhodesia’s import substitution project. The unfolding revelations of the rot in our State enterprises are shocking, and reflect the value system of our current leadership. This also equally applies to the rot in our extractive sector. The stories around how platinum and lithium minerals are being managed are disappointing and it is time we change our strategy around our key mineral endowments. Our key challenge is to identify national resource management strategies that benefit the country’s present and future generations, including strategies for attracting the requisite investment and technology to develop the resource sector effectively in the long term. Unless we brutally address this, any of our contemplated economic recovery blue prints are a waste of time.

Second, he ensured that no raw material left the country as a matter of policy. Vertical integration of industry was primary at all costs. If no raw materials were to leave the country, it required that the country had to develop the capacity to process them first. This was achieved by investing heavily in infrastructure, especially in the railway network, power and water.

Our lesson here is that we need an informed and holistic strategy on vertical integration of industry that is not implemented ad hoc, but takes into account what needs to be in place first.

In many instances good projects are announced without first ensuring that we have the capacity to implement them. It also does not do enough home work to make sure that implementation does not create negative unintended consequences that derail or immunise the intended results. We need to think clearly and anticipate before we act. Inconsistent government policy clouded by hidden vested interests remains our core problem.

The third thing that Smith did was to implement selective subsidies, but these were price subsidies and not input subsidies. In other words, the finished product would be subsidised through its sell price only. This avoided a parallel market for inputs developing. It also avoided profiteering at input level as is the case now, where the unscrupulous buy fertiliser in bulk to make profits thereby creating artificial shortages and increasing production costs unnecessarily.

An example was the subsidising of wheat production. Farmers would produce wheat without input subsidies, but the price of wheat offered, would compensate the farmer for his full cost of production thus making it viable to produce wheat.

Fourth, Rhodesia had very strict import control measures with strong accountability and fairness. Companies had to have import licences which were managed fairly and with minimum corruption. They had to first prove that they could not source inputs locally and this further encouraged local supply companies to grow. The middleman had no place in that process.

The important thing here was that this policy was only guided by the national priority of producing goods locally. Government officials did not drive imported German or British cars, they used locally-assembled Peugeot 504’s for those who still remember, thus creating demand and jobs.

From this we can learn that we must control the import bill strictly, but fairly. We must all live within our means and we must walk our talk. We must promote home made products in word and in deed; authenticity is key.

Fifth, Rhodesia had incentives in place for industry to build local production capacity. For example, building a manufacturing plant had huge tax incentives and farmers could write off costs for building dams and thus we could irrigate throughout the year ensuring food security and exports. Incentives and not penalties work more effectively.

Of course Rhodesia had its own currency which remained strong because it was managed prudently. Discipline and national interests were not negotiable; something that is a major challenge today.

My contention here is that we can certainly do these things if we wish. Our problem is not the lack of ideas or sanctions; it is because of greed and corruption both in the public and private sectors. We now have a generation of thieves who want to do as little work as possible while making as much at the expense of national inclusive development and in that process thereby leaving so many behind!

Yes, we can rebuild our country, but this requires that we all put our heads together in the national interest. Our leaders must also lead and live by example.

• Vince Musewe is an economist. He writes here in his personal capacity. He can be contacted on vtmusewe@gmail.com.