With over a decade of strained relations between Government and the business sector, little room existed for productive engagement. The result- a stifling business environment doing little to stem the rampant closure of big business and inhibiting the growth of micro, small and medium enterprises which provide a source of livelihood for the majority of Zimbabwe’s workforce. In this blog, I reflect on how this is changing. By using research evidence to build engagement between policy actors, Zimbabwe is instituting a number of important reforms to improve operating conditions hoped to stimulate new job creation and reduce poverty amongst the working poor.
A time to build trust
In the past, little was understood on the potential of research evidence to influence pro-poor policy making in Zimbabwe. This is not surprising given the dynamic political context that influences decision making in the nation. Mixed results of various policy interventions implemented since independence have left the country with poverty levels still considered high at 72.3 per cent (World Bank). Over the last decade, rapid de-industrialisation and escalating formal unemployment have left millions dependant on informal sector activities for their livelihoods. Strained relations between Government and the business sector meant constructive engagement to address challenges in the operating environment were near impossible. The ESRC-DFID Zimbisa programme supports efforts to bring non-state actors into dialogue of how economic recovery and inclusive growth can be achieved.
Zimbisa’s approach is flexible and non-prescriptive, instead choosing to work within the incentives and priorities of policy actors. This allows Zimbisa to build trust and strengthen relationships with local partners. These relationships have enabled the programme to move quickly, achieving over 32 partnerships with local public and private actors as well as six policy reforms over the last two years.
Fostering meaningful engagement through a market systems approach
Zimbisa’s approach similarly enables actors to productively engage one another. Concerned about Zimbabwe’s growing lack of competitiveness for example, public and private actors were assisted by Zimbisa to dialogue on this issue of common interest. It became apparent that to address Zimbabwe’s perennial low ranking in the World Bank Doing Business Indicators a collaborative effort would need to be undertaken by the public and private sectors. Leveraging on this incentive, Zimbisa used its market systems approach to help Government and the private sector gather evidence that looked into the local context and told the Zimbabwean story on competitiveness. By using a consortium of researchers from academia, think tanks, government and the private sector, the evidence generated had buy-in from all segments of the economy. The National Competitiveness Report (NCR), now an annual evidence driven process, has provided a platform for open and honest public-private dialogue on economic and business environment issues. This process has led to the setting up of a local public institution ceased with implementing recommendations of the NCR and monitoring the country’s improvements in competitiveness.
Building local coalitions around important areas requiring reform, has enabled the private sector to speak with one voice and positively influence policy. Aware that the introduction of a local tax on accommodation services for foreign tourists would impact the sector negatively, Zimbisa supported a local business membership organisation in the tourism sector to gather independent evidence and engage the Government. Tourism is a sector that provides a livelihood for numerous microenterprises, including arts-based businesses employing in majority women. The local tax was likely to result in a decline in tourist arrivals with negative effects along the tourism value chain. Using an inclusive process to engage value chain actors, the business membership organisation was supported by a local policy think tank to generate evidence for policy engagement. This enabled two key reforms to be introduced aimed at cushioning the sector against decline.
In addition to remaining relevant to demand driven processes, Zimbisa is entrepreneurial, seeking opportunities to add value to ongoing policy reforms. Eager to capture the informal market into the mainstream economy, the Ministry of Small and Medium Enterprises and Cooperative Development undertook a process to draft a strategy aimed at formalising the informal sector. Alert to the disgruntlement of informal sector enterprises in largely being excluded from the formulation process, Zimbisa supported a local business membership organisation to undertake inclusive research aimed at influencing the Ministry’s strategy. Compelled by evidence presented, the Ministry sought Zimbisa’s support to undertake an extensive exercise to ensure the perceptions of informal enterprises across the country are captured and inform the revision of the formalisation strategy. The research, carried out in partnership with a local independent research institution is a remarkable partnership given the history of mutual mistrust between private research firms and government. Zimbisa has been able to leverage the relationship capital it has built with both private and public actors to facilitate players building relationships amongst themselves. Once completed, the strategy is expected to lead to legislative and regulatory reforms that will improve the business environment for micro, small and medium enterprises and their workforce, the majority who are poor.
The environment Zimbisa works in is not without constraints. Operating in a dynamic political context such as that prevailing in Zimbabwe requires a delicate touch. Ensuring the incentives of different policy actors remain aligned in a changing context is a key challenge. Additionally, contracting fiscal space and a difficult economic environment often means partner’s resources are severely constrained. This requires flexibility and innovation on Zimbisa’s part to ensure partners access resources and use them efficiently to undertake critical activities with pro-poor outcomes. Over the past two years, Zimbisa has been able to address these challenges due to the trust it has built with actors, enabling it to leverage its relationship to positively address challenges.
- To promote engagement and achieve greater policy influence, it is critical that the research undertaken feeds into the priorities of local actors and their stakeholders. Zimbisa’s non-prescriptive approach which works to strengthen the capacities of local actors to engage with one another has so far yielded positive outcomes in this regard.
- Actors in the policy space are driven by a wide range of incentives to undertake reforms. Gaining an understanding of these incentives is important to allow the development of smart partnerships between local actors. These partnerships offer the best opportunity for policy influence.
- Policy influence and reforms take time. To progress from the ways of the past to a future where national priorities are set through inclusive processes, where local ownership of evidence informs national strategies is a process not an event, and processes take time to be institutionalised and replicated.
image credit: flickr.com/photos/swathi-icrisat-esa/