Zimbabwe - Overseas Development Institute

V. AGRO-INDUSTRIAL LINKAGES
5.1 Macro-Trends
A g r i c u l t u r e and manufacturing are (and/or have the p o t e n t i a l
to be) l i n ) i e d i n a v a r i e t y of ways. Most obviously, manufacturing
sector output can be used as inputs to the a g r i c u l t u r a l
sector, commonly to replace the importation of those products
while, f o r i t s part, a g r i c u l t u r a l output can be used as inputs to
the manufacturing sector. To the extent that t h i s l a t t e r linlcage
leads to e i t h e r c o s t - e f f e c t i v e import s u b s t i t u t i o n of domestic
consumption goods or f o r e i g n exchange earnings of what would
otherwise be raw a g r i c u l t u r a l exports then there w i l l also be a
f o r e i g n exchange gain f o r the country. A d d i t i o n a l l y there are
demand e f f e c t s that can be important: a r i s e i n a g r i c u l t u r a l
incomes not only provides a d d i t i o n a l p o t e n t i a l produce to process
w i t h i n manufacturing i t a l s o r a i s e s o v e r a l l demand by i n j e c t i n g
higher disposable incomes i n t o the economy, s t i m u l a t i n g demand
f o r manufactured products w i t h i n the a g r i c u l t u r a l sector and
elsewhere. A n a l y s i s of these d i f f e r e n t sorts of linltages i s
l i m i t e d i n the Zimbabwean case because of lack of r e l i a b l e time
s e r i e s data. Thus while t h i s s e c t i o n of the paper w i l l attempt
to point to the d i f f e r e n t forms of r e l a t i o n s h i p e x i s t i n g between
the two sectors, many of the f i n d i n g s must remain rather tentat
i v e ' ' 8 .
A number of analysts (such as Hawkins (1987)) have argued
that i n Zimbabwe a g r i c u l t u r e i s the key motor of contemporary
development and thus that changes i n GDP l e v e l s and, more
narrowly, i n manufacturing growth are determined by a g r i c u l t u r a l
performance. I n d i r e c t support f o r such a viewpoint i s suggested
by the data i n Figures 5, 7, 16 and 17, above, which reveal the
small and d e c l i n i n g outward o r i e n t a t i o n of manufacturing over
time. More d i r e c t evidence i s provided i n Figures 19, 20 and 21,
below, which examine these d i f f e r e n t r e l a t i o n s h i p s from the e a r l y
1950s. Figure 19, showing the r e l a t i v e c o n t r i b u t i o n s of manufact
u r i n g and a g r i c u l t u r e to GDP, appears to suggest that the
o v e r a l l i n f l u e n c e of a g r i c u l t u r e has p r o g r e s s i v e l y d e c l i n e d while
that of manufacturing has stepped i n not only to replace i t but
to gain increased prominence and i n f l u e n c e . Figure 20, recording
the changes i n absolute value added over the same time period,
shows c l e a r l y that the l i n k s were strong and close i n the period
p r i o r to 1967, the year that i n absolute terms manufacturing
value added exceeded a g r i c u l t u r a l value added for the f i r s t time.
Thereafter, however, two trends are observable: f i r s t , the annual
v a r i a t i o n s i n a g r i c u l t u r a l performance''' are f a r more marked
than the annual v a r i a t i o n s i n manufacturing production; second,
the absolute c o n t r i b u t i o n of each sector to the o v e r a l l economy
a l t e r s q u i t e d r a m a t i c a l l y over time such that i n the two year
period 1985/86, annual MVA was estimated to be $2,303 mn with
a g r i c u l t u r e ' s c o n t r i b u t i o n $ 943 mn, only 40% of that achieved by
manufacturing. Together, Figures 19 and 20 would tend to suggest
that the Hawkins t h e s i s i s becoming f a r l e s s robust.