Economy Uncensored with Tapiwanashe Mangwiro
The global economy is undergoing a profound transformation, marked by a gradual but significant shift from globalisation to regionalisation.
As nations and corporations recalibrate their strategies in response to geopolitical tensions, economic uncertainties and technological advancements, regional economies are emerging as pivotal players in shaping the future of trade and development.
For Zimbabwe and its surrounding region, this trend offers both challenges and opportunities, particularly in industries such as pharmaceuticals, artificial intelligence (AI), modern production systems, and infrastructure development. Understanding and leveraging these dynamics could be key to unlocking sustained economic growth.
The rise of regional economies
The concept of regional economies is not new, but its relevance has grown in recent years as countries seek to mitigate risks associated with overdependence on global supply chains. Geopolitical tensions, such as the trade war between the United States and China, have amplified the need for “friendshoring,” where nations prioritise trade with allies and regional partners.
For Zimbabwe, situated in Southern Africa, this shift presents a chance to strengthen ties within the region, particularly with countries like South Africa, Zambia and Botswana, while also fostering intra-African trade through the African Continental Free Trade Area (AfCFTA).
Zimbabwe’s strategic location and abundant natural resources position it as a potential hub for regional economic integration. However, the country’s ability to capitalise on these advantages depends on its readiness to address critical bottlenecks, including inadequate infrastructure, limited industrial capacity and policy inconsistencies.
Industries such as pharmaceuticals and AI-driven technologies could play a transformative role, but they require a robust foundation of energy, transport and digital infrastructure.
Pharmaceuticals: A regional necessity
The Covid-19 pandemic underscored the vulnerability of Africa’s healthcare systems and the urgent need for a self-sufficient pharmaceutical industry. Zimbabwe, like many African nations, relies heavily on imported medicines, exposing the country to supply chain disruptions and price volatility.
Developing a regional pharmaceutical hub could reduce dependency on imports, enhance healthcare access, and create jobs.
Zimbabwe’s pharmaceutical industry, though nascent, has the potential to grow through regional collaboration. Leveraging partnerships with neighbouring countries to pool resources, share expertise, and harmonise regulatory frameworks could stimulate local production.
For instance, South Africa’s relatively advanced pharmaceutical sector could serve as a model and a partner for Zimbabwean firms. Investments in research and development (R&D) are also crucial, particularly in producing generic drugs and vaccines tailored to regional health challenges such as malaria, HIV/AIDS, and tuberculosis.
AI and innovation: The future of production
Artificial intelligence is reshaping industries worldwide, and its adoption in Africa is gaining momentum. For Zimbabwe, AI presents an opportunity to leapfrog traditional development hurdles and drive innovation across sectors.
AI can enhance productivity in agriculture, a cornerstone of Zimbabwe’s economy through precision farming techniques that optimise resource use and increase yields. In manufacturing, AI-driven automation can improve efficiency and product quality, making Zimbabwean goods more competitive in regional and global markets.
Moreover, AI can play a critical role in modernising public services, from healthcare diagnostics to education delivery. However, realising these benefits requires significant investment in digital infrastructure, skills development, and data governance.
Regional cooperation can help bridge these gaps. For example, partnerships with South Africa, which has a growing tech ecosystem, could provide Zimbabwe with access to expertise, funding, and technology transfer.
Modern production systems: Building competitive industries
The integration of modern production systems is essential for Zimbabwe to diversify its economy and reduce reliance on raw material exports. Industries such as textiles, food processing, and automotive components could benefit from adopting advanced manufacturing techniques.
These systems, characterised by automation, digitisation, and sustainability, can enhance productivity and reduce costs.
However, modern production systems require reliable infrastructure, particularly in energy and transport. Zimbabwe’s persistent power shortages and aging rail network are significant impediments to industrial growth. Addressing these challenges is critical not only for the manufacturing sector but also for attracting foreign direct investment (FDI).
Infrastructure: The backbone of economic growth
Infrastructure development is a cornerstone of regional economic integration and industrialisation. For Zimbabwe, improving energy and transport infrastructure is paramount to unlocking its economic potential.
The country’s energy sector, dominated by hydroelectric power from the Kariba Dam, is vulnerable to climate change and requires diversification. Expanding renewable energy sources such as solar and wind, along with modernizing the national grid, could provide a more stable and sustainable energy supply.
Transport infrastructure, particularly rail, is equally vital. Zimbabwe’s rail network, once a regional leader, has deteriorated due to years of underinvestment. Revitalising the rail system could reduce logistics costs, improve connectivity with regional markets, and support the movement of goods and people.
Collaborative projects, such as linking Zimbabwe’s rail network with those of South Africa and Zambia, could enhance regional trade and integration.
Policy and regional collaboration
To fully harness the benefits of regionalisation, Zimbabwe must adopt policies that promote economic stability, investment, and innovation. Strengthening governance, ensuring policy consistency, and reducing bureaucratic hurdles are essential steps. Additionally, regional collaboration is crucial.
The AfCFTA provides a framework for reducing trade barriers and fostering economic cooperation, but its success depends on the commitment of member states to implement its provisions.
Zimbabwe can also benefit from aligning its industrial and trade policies with regional priorities. For example, participating in regional value chains, where different countries specialise in various stages of production can enhance competitiveness and create jobs.
The automotive industry offers a case in point: Zimbabwe could focus on producing specific components while relying on regional partners for assembly and distribution.
Conclusion
The shift toward regional economies presents a unique opportunity for Zimbabwe to redefine its economic trajectory. By focusing on industries such as pharmaceuticals, AI-driven innovation, and modern production systems, and by addressing critical infrastructure gaps, the country can position itself as a key player in Southern Africa’s economic landscape.
Success will require visionary leadership, strategic investments, and a commitment to regional collaboration. As the world moves toward a more fragmented but interconnected economic order, Zimbabwe has the potential to turn its challenges into opportunities and become a catalyst for regional growth and development.
Tapiwanashe Mangwiro is a resident economist with the Business Weekly and writes this in his own capacity. @willoe_tee on twitter and Tapiwanashe Willoe Mangwiro on LinkedIn
