Zimbabwe's Economy: Performance from 2013 to 2018

"Managing the economy is like herding cats"

  – Anthony Hopkins

Like most people, I have been struggling to reckon how the Zimbabwean economy will fare in the post-Government of National Unity (GNU) era.

My quest started by assiduously sifting through the election manifestos and economic blueprints of the chief contenders in the 2013 election. Unfortunately, that proved to be a Sisyphean endeavour; while the economic strategy documents were unequivocally pellucid about the envisaged end states, they failed to:

1. Clearly articulate how the economic visions would be operationalized; they did not satisfactorily delve into policy mechanics.
2. Enunciate or stress-test the assumptions that underpinned each economic plan.

Thus, I was left to my own devices. To scope my endeavour, I formulated three simple research questions:

• What is the minimum "acceptable" rate of economic growth?
• What are the main drivers of upswings and downswings in Zimbabwe's rate of economic growth?
• What is the probable trajectory of the Zimbabwean economy?

 In this post I will share abbreviated answers to the above-mentioned research questions.

***

...What is the minimum "acceptable" rate of economic growth?

Generally, for an economy / society to remain stable, the rate of economic growth has to consistently exceed the rate of population growth. Hence, the broad answer to the question "What is the minimum acceptable rate of economic growth?" is: any rate of growth that lies comfortably above Zimbabwe's population growth rate.

Illustration 1, below, shows Zimbabwe's population growth rate from 1971 to 2013:

Illustration 1 (click on illustration to zoom in)

From Illustration 1, the following is evident:

• Zimbabwe had its highest rate of population growth, 4.058%, in 1983. The bulk of the population growth during that year can be largely attributed to: 1) A post-independence war baby boom which was engendered by increased geopolitical stability, and; 2) Increased life-expectancy which was engendered by enhanced service delivery and improvements in public healthcare delivery. Owing to the emancipation of women, a lower life expectancy, youth emigration and the spread of planned parenthood, it is highly unlikely that Zimbabwe's population growth rate would, at any point in the future, ever exceed this 1983 peak.
• In 2013, Zimbabwe's population growth rate bounced back up to its 1992 level / pre-HIV scourge level, i.e. 2.41%. 

Hence, one can assert that Zimbabwe's minimum "acceptable" GDP growth rate lies somewhere between 2.42% and 4.06%.

...What are the main drivers of upswings and downswings in Zimbabwe's rate of economic growth?

 "As sure as the spring will follow the winter, prosperity and economic growth will follow recession."

   – Bo Bennett

To unearth the main drivers of upswings and downswings in Zimbabwe's rate of economic growth, it is prudent to interrogate Zimbabwe's most recent economic history:

Illustration 2 (click on illustration to zoom in)

Illustration 2 demonstrates that:

• Between 1960 and 2013, the Zimbabwean economy had six distinct historiographical phases. They can be summed as follows: The War-Time Phase, coloured white in Illustration 1, which lasted from 1960 up to 1978; The Independence Euphoria Phase, coloured blue in Illustration 1, which lasted from 1979 to 1985; The-Unity-Accord-Drought-Austerity Phase, coloured red in Illustration 1, which lasted from 1986 to 1993; The Social Upheaval Phase, coloured green in Illustration 1, which lasted from 1994 to 1998; The Free Fall Phase, colored yellow in Illustration 1, which lasted from 1999 to 2008, and; The Government of National Unity (GNU) Phase, coloured purple in Illustration 1, which lasted from 2009 to 2012. During these time-periods, GDP upswings and downswings (above the trend line in Illustration 2) were largely driven by increases and decreases in the Perceived Geopolitical Risk of the country.
• There were four boom-bust cycles in Zimbabwe's history. They include: the 1979-1985 boom-bust cycle; the 1986-1993 boom-bust cycle; the 1994-1998 boom-bust cycle, and; the 2009-2013 boom-bust cycle. During these boom-bust cycles, booms were largely spawned by a moderation of Perceived Political Risk, and busts were caused by an admixture of; increasing Perceived Political Risk, deteriorating Food and Water Security, and Local and International Debt Cycles.

The abovementioned drivers will each be discussed in detail in the subsection below:

Key Drivers of Upswings and Downswings

Illustration 3 uses the metaphor of interlocking cogwheels (or gears) to exposition the drivers of upswings and downswings in Zimbabwe's rate of economic growth:

 

Illustration 3 (click on illustration on to zoom in)

As Illustration 3 shows the drivers include:

1. Perceived Political Risk: Upswings in Zimbabwe's GDP growth rate were associated with the following periods wherein Perceived Political Risk moderated; the Independence era (1979-1981); the Unity Accord era (1986-1989) and the Government of National Unity (GNU) era (2009-2012). During these time periods, portfolio and direct flows of foreign investment to Zimbabwe increased, tourist arrivals swelled, firms increased their headcounts and capital expenditures, and, a sense of optimism motivated people to spend more. Further, multilateral and government-to-government lines of credit were extended to Zimbabwe during these time periods. These lines of credit allowed the Zimbabwean economy to expand by employing a goverment-spending-led growth model. In aggregate, these factors boosted the nation's rate of economic growth. Downswings in Zimbabwe's GDP growth rate were associated with the following periods wherein Perceived Political Risk increased: the Dissident era (1982-1985) and the Free Fall era (1999-2008). During periods of increasing Perceived Political Risk, there is reversal of the positive concomitants of moderate Perceived Political Risk. Owing to the-said reversal, economic growth nosedives. By and large, Zimbabwe endures relative diplomatic isolation during periods of increasing Perceived Political Risk. This, in effect, decouples the Zimbabwean economy from the global economy. And, it mutes Zimbabwe's sensitivity to the reverberations of International Short term and Long term Cycles. Conversely, when Perceived Political Risk moderates, the Zimbabwean economy recouples to the global economy.
2. Water and Food Security: Downswings in Zimbabwe's economic growth rate were associated with the following periods of food and water insecurity: 1990-1992. However, it is important to stress that during this time period, Food and Water security issues intensified a downswing that had already been ignited by IMF-induced austerity measures and a "post-Cold War global geopolitical realignment". [1]
   
3. Local Credit Cycles: The Government of Zimbabwe ("GoZ") is the largest originator of securities in Zimbabwean credit markets; its borrowing needs drive local credit cycles. For instance, in 1997, the GoZ capitulated to the demands of the country's war veterans and gave them gratuities amounting to ZWD 50,000.00 per person. These gratuities were largely financed (at artificially low interest rates) using "onshore" lines of credit. Owing to the Asian Financial Crisis of 1997, Zimbabwe's economic performance was, during that time period, soft. Thus, the nation's tax inflows were anaemic; the GoZ did not have the capacity to service the additional debt. Hence, the country's reserve bank largely serviced the new debt by "printing money". This money-printing orgy was largely responsible for the precipitous decline in nation's GDP growth rate between 1997 and 1998 [4]. In the year 2000, the country defaulted on its external sovereign debt. Because of this incident, the country was shut-out of international credit markets, and it was compelled to rely heavily on "onshore lines" of credit. Together with the economic and diplomatic fallout that was triggered by the Fast-Track Land Reform initiative, this forced local-debt-binge intensified inflation, and, it set into motion a ten year struggle with stagflation (1999-2008).
   
4. International Short term and Long term Cycles: Whenever Zimbabwe's Perceived Political Risk is low, the nation links to the rest of the global economy through trade and investment flows; i.e. it couples to the rest of the global economy. When this occurs, the Zimbabwean GDP growth rate increasingly moves in tandem with the economic growth rate of world economies. For instance, in 1997, the growth rate of Zimbabwe's GDP fell (partly) because of the global economic contraction that was triggered by the Asian Financial Crisis.

From the discussion of the drivers, it is evident that the Perceived Political Risk is the preeminent driver of upswings and downswings in Zimbabwe's GDP.

***

Recently, Zimbabwe's Perceived Political Risk increased owing to lack of clarity on Zimbabwe's Indigenization and Empowerment Initiative (and ongoing debates about the fairness of the 2013 elections).

Hence, it is reasonable to assert the following:

• During the GNU-era, Zimbabwe's economy recoupled to the global economy, particularly the East. In the post-GNU era, Zimbabwe will decouple from the Western hemisphere of the global economy [3].  However, she will continue to be sensitive to the gyrations of the Eastern economy, particularly China. Succinctly put, Zimbabwe will be relatively immune from any global economic shock that does not materially impact China.
• Very few multilateral institutions and offshore financial entities will be willing to extend lines of credit to the Zimbabwean government. Thus, it is reasonable to assert that the GoZ would have to predominantly rely on Zimbabwe's credit markets for its borrowing needs. This poses the following problems: 1) Zimbabwe's credit markets currently do not have the capacity to cater to the borrowing needs of the GoZ, and; 2) Debt from Zimbabwe's credit markets is more expensive to service than debt from the international markets (i.e. interest rates in Zimbabwe are relatively high). Ceteris paribus, this implies that: i) the GoZ's initiatives will be chronically underfunded, and; ii) The total debt burden of Zimbabwe will rise at an accelerated pace. If the nation's total debt happens to rise at a faster rate than incomes, it would be reasonable to expect, at some point in time, a sovereign default episode that would destabilize Zimbabwean banks and eviscerate the nation's savings.

...What is the Probable Future Trajectory of the Zimbabwean Economy?

  

"Face reality as it is, not as it was or as you wish it to be."

 – Jack Welch

According to the principles of conventional growth accounting, economic growth has the following constituent elements:

1. Growth in the Labour Participation Rate, or annual hours worked per capita; 
2. Growth in Labour Quality, or the skill level of the workforce;
3. Growth in Capital Deepening, or the amount of physical capital invested per worker; and 
4. Growth in Total Factor Productivity, or output per unit of quality-adjusted labour and capital.

Illustration 4 depicts the constituent elements of Zimbabwe's economic growth:

Illustration 4 (click on illustration to zoom in)

The elements of economic growth will each be discussed in the subsections below:

Labour Participation Rate

Owing to the following factors, Zimbabwe's labour participation rate is unlikely to register any near-term growth:

• Indigenization Uncertainty: There is a lot of uncertainty that surrounds Zimbabwe's Indigenization and Empowerment drive. During the run-up to the 2013 elections, the pronouncements that were made by 'certain political players' indicated that the initiative would, in the post-election period, increase in momentum and aggression. However, the pronouncements that have been made in the post-election period indicate that there would be some moderation in the implementation of the policy (Note: it is important to state that no specifics exist at this stage). This frequent reversal of policy stances creates a lot of ambiguities and confusion: it increases Perceived Political Risk. Hence, it is reasonable to assert that policy seesawing will curtail inward investment. The labour participation rate just cannot increase in such an environment.
• Frozen Credit Markets: In August of 2012, the Reserve Bank Governor of Zimbabwe announced that the minimum capital requirements of commercial banks would be increased from a level of USD 12.5 million to USD 100 million by December 2014. Increases in bank capital requirements, are in essence, a contractionary monetary policy tool: they mop-up liquidity from the markets. Thus, it is reasonable for one to assert that bank lending will be subdued between now and 2014. Owing to this, firms will have trouble funding their growth projects. And, the labour participation rate would remain subdued. Clearly, this does not bode well for Zimbabwe's growth prospects.
• Power and Water Shortages: Water and electricity are key inputs in agricultural and industrial processes. Thus, one can argue that Zimbabwe's labour participation rate would not register any material improvement until the availability of these critical inputs improves. Again, this doesn't bode well for Zimbabwe's growth prospects.
  

Labour Quality

The quickest way to improve Zimbabwe's labour quality would be to repatriate Zimbabwe's "lost skills".

In a March 2 2009 blog post titled Zimbabwe: Creating Prosperity I wrote and I quote: "Zimbabwe has a population of approximately twelve to fifteen million people. Currently, between three and five million (over 25% of the Zimbabwean population) of the youngest, healthiest and most skilled niche of Zimbabwe's population resides in the diaspora."

"Thus, this implies that the majority of Zimbabwe's human capital is currently in foreign lands; appreciating in value and accumulating knowledge and skills that have the potential of effecting a miraculous transformation in Zimbabwe."

As it currently stands, the Zimbabwean government has not yet implemented targeted policy measures that would facilitate the repatriation of lost skills, e.g. tax holidays, hefty relocation grants and competitive public sector wages. Further, there are no developments that hint the enactment of such policies in the near-term.

Therefore, it is reasonable to argue that an immediate improvement in Zimbabwe's labour quality is highly unlikely.

Capital Deepening

• Frozen Credit Markets: see Frozen Credit Markets in the Labour Participation Rate subsection.
• High Perceived Risk: see Indigenization Uncertainty in the Labour Participation Rate subsection.

Total Factor Productivity

By and large, Zimbabwean firms are teetering on the brink of collapse; they just don't have the free cashflows to invest in research and development initiatives. Further, the nation's frozen capital markets do not offer firms much room to manoeuvre. Furthermore, the government of Zimbabwe is chronically underfunded; it cannot support basic research.

If left unaddressed, this deficit of RnD funding will constrain the technological dynamism of the Zimbabwean economy (in the medium to long term).

To make-up for the deficit in local innovation, the Zimbabwean government would need to implement targeted policies that would allow the Zimbabwean economy to absorb productivity-enhancing technologies from the rest of the world.

As it currently stands, no such policies have been implemented. And, there are no definitive indications that suggest that the GoZ has the intention to implement such policies in the near-term.

If this situation remains unabated, there is the risk that the growth rate of Zimbabwean incomes would outpace the growth rate of the nation's productivity [2]. In the medium-to-long term, this would make Zimbabwe a chronically uncompetitive destination for investment.

Further, this would consequentially diminish the competitiveness of Zimbabwean products in the global markets.

***

To recap, the answers to the research questions that I formulated can be summed as follows:

• Question: What is Zimbabwe's minimum acceptable level of economic growth? Answer: Zimbabwe's minimum "acceptable" GDP growth rate lies somewhere between 2.42% and 4.06%.
• Question: What are the main drivers of upswings and downswings in Zimbabwe's rate of economic growth? Answer (in the order of prominence): 1) Perceived Political Risk, 2) International Short term and Long term Cycles, 3) Local Credit Cycles and 4) Food and Water Security Issues.
• Question: What is the probable trajectory of the Zimbabwean economy? Answer: Owing to the increase in Perceived Political Risk, the Zimbabwean economic growth rate will fall between now and 2014. If the GoZ manages to bolster the productivity of its agricultural sector, by addressing water issues, the nation can register annual economic growth rates of anywhere between 4% and 7% per annum from 2014 to 2018. However, this is very unlikely; to refurbish the country's legacy irrigation infrastructure, Zimbabwe needs approximately USD 3 billion: as it currently stands, multilateral institutions will not lend that money to Zimbabwe, and, Zimbabwean credit markets do not have the capacity to provide the funding.

[1] In the Post-Cold War era, the US government did not have any pressure to stop the spread of Communism. And, it was less inclined to avail lines of aid to countries that were not willing to adopt the U.S.'s core values and principles of governance.
[2] The government of Zimbabwe recently reaffirmed its unconditional promise to increase the salaries of civil servants.
[3] Western players are generally repulsed by the policy direction of Zimbabwe. 
[4] Zimbabwe's involvement, under the auspices of SADC's regional stability organ, in the DRC war was also responsible for this precipitous decline.

Irrigation and Hybridized Land Tenure: Increasing Zimbabwe's Food Security

"In the Lord's Prayer, the first petition is for daily bread. No one can worship God or love his neighbor on an empty stomach."

—  Woodrow Wilson

According to a report that was recently published by an NGO called the Food and Nutrition Council, 25% of Zimbabwe's rural households can be classified as "food insecure". Otherwise put, between 2013 and 2014, close to 2,206,924 Zimbabweans (~ 17% of Zimbabwe's population) will require some form of food aid. This figure represents a 32% year-on-year increase in the number of Zimbabwe's "food insecure".

Clearly, Zimbabwe's food security situation is deteriorating.

Generally, food insecurity is the precursor of societal turbulence; it drives communities to the brink of chaos. History is replete with numerous examples of placid societies that were morphed, by hunger pains, into screaming banshees.

In this post, I will identify some of the root causes of Zimbabwe's food insecurity. They can be summed-up as follows: erratic rainfall (& poor irrigation infrastructure); unviable grain prices, and; land tenure that impedes farmers from realizing economies of scale.

Further, I will argue that farming cooperatives can be employed to enhance the cost-benefit equation of growing food crops like maize.

From the outset, I have to point out that most of what I will say has been said before (e.g.), albeit in a  sweeping manner. Otherwise put, what I will say has been previously articulated in a manner which is divorced from supporting data, analyses and computations.

In this post, I will embellish the recommendations that have been made by others with data, analyses and computations. My goal is to present an evidence-based discussion that will: 1) Further-illuminate the drivers of Zimbabwe's food insecurity, and; 2) Outline a plausible solution to Zimbabwe's food woes.

***

...Zimbabwe's Food Situation

Illustration 1 sums-up Zimbabwe's food situation:

Illustration 1 (click on illustration to zoom in) Adapted From: ZimVac, 2013

Illustration 1, above, demonstrates the following key points:

1. The heart of Zimbabwe's diet is maize/corn. It is the "source material" of sadza, a thick polenta-like porridge that features prominently in Zimbabwean cuisine. As Illustration 1 demonstrates, Zimbabweans consume close to 2.2 million tonnes of maize annually.
2. Zimbabwe's production of maize fell from 1.4 million tonnes, in 2011, to just over 900,000 tonnes, in 2012. This translates to a 35.71% decrease in Zimbabwe's production of maize. And, it implies that Zimbabwe had a deficit of 1.3 million tonnes of maize in 2012. Generally, this grain deficit was supplemented by government-to-government imports of maize from South Africa and Zambia. Further, to address this crisis, aid organizations, like the World Food Programme (WFP), also dispensed food-aid-packages to vulnerable pockets of Zimbabwean society.
3. Historically, Zimbabwe produced, under irrigation, a 600,000 tonne annual buffer reserve of maize. In general, most of Zimbabwe's "legacy" irrigation infrastructure has fallen into a state of disrepair. This, in essence, has meant the loss of the-said buffer reserve. By some estimates, Zimbabwe requires a USD 3 billion capital infusion for the refurbishment of its irrigation infrastructure.

Generally, analysts assert that Zimbabwe's food insecurity is driven by; erratic rainfall, the country's power crisis and a shortage of funding, implements and expendable inputs. 

Intriguingly, an additional narrative is increasingly taking the center stage. It can be abbreviated as follows:

Zimbabwean farmers, especially the 146,000 new smallholder farmers, are increasingly using the lion's-share of their land to grow cash crops, like tobacco, and not food crops, like maize. [1]

A cursory look at Zimbabwe's agricultural data lends credence to this narrative.


...The Tobacco Story

Rising Production

Illustration 2, below, demonstrates Zimbabwe's output of tobacco from 2007:

Illustration 2 (click on illustration to zoom in) Adapted From: TIMB

From Illustration 2, above, it is evident that Zimbabwe's tobacco output has been on an uptrend since 2009. It has been increasing in-spite of the host of problems that are bedeviling Zimbabwe's agricultural sector:

Increasing Number of Growers & Falling Productivity

Illustration 3, below, demonstrates that the number of registered tobacco growers in Zimbabwe has been growing at an average annual rate of 31%:

Illustration 3 (click on illustration to zoom in) Adapted From: TIMB

According to Illustration 3, the number of tobacco growers registered its sharpest increase (61%) between 2011 and the 2012/2013 growing season.

Illustration 4, below, shows the average weight of tobacco that was delivered by each grower between 2007 and 2012/2013:

Illustration 4 (click on illustration to zoom in) Adapted From: TIMB

As Illustration 4 demonstrates, the average weight of tobacco that was delivered by each grower fell from 2,500 kgs, in 2010, to 1,500 kgs in the 2012/2013 growing season (i.e. it fell by 67%).

Put together, Illustrations 3 and 4 imply that the increase in Zimbabwe's tobacco output is being driven by a growing number of tobacco farmers; i.e. it is not being driven by productivity enhancements at a constant number of farms.

Falling Average Revenues

Illustration 5, below, shows the average revenue that was earned by tobacco growers between 2007 and 2012/2013:

Illustration 5 (click on illustration to zoom in) Adapted From: TIMB

According to Illustration 5, the average revenue that was earned by each tobacco grower plummeted from a high of USD 8,900 in 2010 to USD 5,000 in 2012/13. During the time-period in question, the average auction price of tobacco increased from USD 2.71 per kg, in 2011, to USD 3.69 per kg in the 2012/13 growing season. Succinctly put: the average revenue that was earned by tobacco growers was on a downtrend, while the average auction price of tobacco was on an uptrend. 

Basically, the auction price of tobacco is the function of two things; the global demand of tobacco and the quality of the tobacco that growers deliver [2]. The China National Tobacco Company is one of the most prominent buy-side players in Zimbabwe tobacco auctions; it accounts for close to 50% of the demand. Thus, it is reasonable to argue that Chinese demand is the main driver of prices on Zimbabwean auctions. 

According to a Euromonitor International report, China's demand for tobacco is growing, albeit at a falling pace. Thus, it is reasonable to assert that the increase in Zimbabwe's auction prices was predominantly driven by growing Chinese demand (not across-the-board quality improvements that would command higher prices). [5]

***

To recap, the preceding analyses reveal the following:

• Zimbabwean tobacco sales have been on an uptrend since 2009.
• The number of registered tobacco farmers has been growing at an average rate of 31% since 2007.
• Between 2010 and 2013, the average weight of tobacco that was sold by each registered grower fell from 2,500 kgs to 1,500 kgs.
• The average revenue that was earned by each tobacco grower plummeted from a high of USD 8,900 in 2010 to USD 5,000 in 2012/13.

 Hence, one can make the following deduction:

The bulk of the increase in Zimbabwe's tobacco output is being driven by smallholder farmers who are shifting from farming food crops to farming tobacco. Many of these smallholder farmers have limited experience in growing tobacco; they are at an early point on the tobacco farming learning curve. Thus, their productivity is relatively low, and it is pulling down the average productivity of Zimbabwe's tobacco sector.

Generally, the majority of Zimbabwean smallholder farmers were the product of the country's fast-track land reform exercise. Their plots average 5 hectares in area, and, they can predominantly be classified as semi-subsistence farmers.

Zimbabwe's average yield of tobacco stands at approximately 2 tonnes per hectare. Therefore, it is reasonable to assert that the average Zimbabwean smallholder farmer uses at least 0.75 hectares of his/her land to grow tobacco (this translates to 15% of the average 5 hectare A1 plot) [3]. Generally, it costs USD 1,800 per hectare to grow tobacco. Therefore, it is reasonable to assert that the average A1 farmer who grew tobacco made an average profit of USD 3,200.00 or USD 533.33 a month (i.e. the amount that, according to Zimstat, a family of 5 would require to live a decent life). This figure is USD 233.00 higher than the average monthly salary of most Zimbabweans (which currently stands at USD 300.00 per month).

Ceteris paribus, the hectarage that the average smallholder farmer puts under tobacco is set to rise. Unfortunately, this may not bode well for Zimbabwe's food security.

...Why Zimbabwean farmers have practically no incentive farm maize

"Most of economics can be summarized in four words: 'People respond to incentives. The rest is commentary."

— Steven Landsburg

Zimbabwe's Food Security; Unpacking the data

Illustration 6, below, depicts the provincial picture of Zimbabwe's food insecurity:

Illustration 6 (click on illustration to zoom in) Adapted From: ZimVac

As Illustration 6 demonstrates:

• Eight out of ten of Zimbabwe's provinces urgently need some form of food aid.
• By and large, Zimbabwe's food insecurity stems from prolonged dryspells.

From Illustration 6, it is evident that Zimbabwe's food insecurity is largely driven by erratic rainfall patterns. Otherwise put, "water issues" are the predominant driver of the increase in the number of Zimbabwe's food insecure.

Illustration 7 shows the regions that experienced the greatest crop losses in the 2012/2013 agricultural season:

Illustration 7 (click on illustration to zoom in)

As Illustration 7 demonstrates, three (out of ten) Zimbabwean provinces experienced severe crop losses in the 2012/2013 agricultural season. They include Manicaland, Midlands and Masvingo provinces. In aggregate, they lost 387,416 hectares of maize (owing to erratic rainfall patterns). This translates to a loss of between 774,832 and 1,549,672 tonnes of maize.

Otherwise, put, if Zimbabwe had normal rainfall / well-developed irrigation infrastructure, the country would have produced between 1,674,832 and 2,449,672 tonnes of maize in the 2012/2013 agricultural season; i.e. the country would have had a grain deficit of around 525,168 tonnes in the worst-case scenario.

Illustration 8, below, depicts the number of people in Zimbabwe who require(d) food aid between 2009 and 2013:

Illustration 8 (click on illustration to zoom in) Adapted From: ZimVac

As Illustration 8 demonstrates, between 2009 and 2012, the number of Zimbabwean denizens who required food aid fell from 6 million to 1.8 million people. From 2012 to 2013, the number of people who were food insecure increased from 1.8 million to 2.2 million. This implies that 400,000 "new" people became food insecure between 2012 and 2013.

The Economics of farming maize

In Zimbabwe, the market of maize is regulated; the country has a centralized state buyer of maize called the Grain Marketing Board (GMB). Annually, the Government of Zimbabwe (GoZ) gazettes the producer price of maize, i.e. the price at which the GMB would buy maize from farmers. In theory, this is the price at which the GMB would purchase Zimbabwe's annual consumption of maize (i.e. 2.2 million tonnes of maize).

In the 2012/2013 agricultural season, the producer price of maize was USD 378.00 per tonne. Hence, this implies that the GoZ had earmarked USD 831,600,000.00 for the purchase of maize. [6]

At this producer price, which is USD 2.00 less than the A1 per tonne cost of producing maize, farmers were only willing to supply 20,000 tonnes of maize to the GMB [7]. Owing to the moribund state of Zimbabwe's grain storage infrastructure, 10,000 tonnes of this supply went bad. 

As I mentioned elsewhere, Zimbabwe's grain deficit (which was 1.4 million tonnes in 2012/2013) is predominantly addressed by government-to-government imports of maize from South Africa and Zambia. In 2013, close to 150,000 tonnes was imported under this arrangement at an average price of USD 460 per tonne.

The price, supply and demand information that was discussed above can be reduced in Table 1 as follows:

Table 1 Adapted From: Zimbabwe Commercial Farmers Union data

From the data points in Table 1, one can plot the supply and demand chart in Illustration 9, below:

Illustration 9 (click on illustration to zoom in)

Illustration 10, below, is an iteration of Illustration 9:

Illustration 10 (click on illustration to zoom in)

According to Illustration 10:

• The equilibrium price of maize in Zimbabwe, i.e. the price at which supply equals demand is approximately USD 520.00 per tonne. At this price, the GoZ can expect A1 farmers to, ceteris paribus, sell 1.1 million tonnes of maize to the GMB.
• At the export/import parity price, i.e. USD 460.00 per tonne, the GoZ of Zimbabwe can expect A1 farmers to, ceteris paribus, sell 600.000 tonnes of maize to the GMB.

The data in Illustration 10 ignore the cost of producing maize, and tell us nothing about the aggregate volume of maize that A1 farmers would produce or the volume of maize that A2 farmers would produce.

Why farmers have an implicit disincentive to farm maize

Generally, the cost of producing maize, at an A1 plot, under irrigation is USD 380.00 per tonne. If we assume an average yield of two tonnes per hectare, the profitability of farming maize can be computed as follows:

Table 2 (click on table to zoom in) Adapted From: Zimbabwe Commercial Farmers Union data

As Table 2 shows, the A1 farmer who produced 10 tonnes of maize would expect to make an aggregate profit of: USD 1,400.00 in a scenario where the GMB purchases maize at the equilibrium price.

Generally, it takes 6 months to "produce" maize. Thus, the profit that would accrue to the farmer translates to USD 233.00 per month. Generally, the average income of Zimbabweans is USD 300.00 per month. According to Zimstat, the average Zimbabwean family of five requires at least USD 534.00 per month to live at the poverty datum line.

Otherwise put, the computed income is less than the monthly average income of Zimbabweans and the Zimbabwean poverty datum line. Hence, it is reasonable to assert that an increase in the producer price of maize is unlikely to incentivize A1 farmers to grow more maize.

Further, if we postulate an implausible average yield of twelve tonnes per hectare, the profitability of farming maize under irrigation, on A1 farm can be computed as follows:

Table 3 (click on table to zoom in) Adapted From: Zimbabwe Commercial Farmers Union data

As Table 3 illustrates, the A1 farmer who produced 10 tonnes of maize would expect to make a profit of USD 8,400.00 in a scenario where the GMB purchases maize at the equilibrium price.

As I stated previously, it takes 6 months to "produce" maize. Thus, the profit that would accrue to the farmer translates to USD 1400.00 per month.

Evidently, the income from farming, at an average yield of twelve tonnes per hectare and a producer price of USD 520.00 per tonne, is greater than the monthly average income of Zimbabweans, and, it is also greater than the Zimbabwean poverty datum line. Thus, it is reasonable to assert that an increase in the producer price of maize would only incentivise A1 farmers to grow more maize if it is accompanied by radical productivity improvements. [8]

Hence, one can conclude that A1 farmers do not have much of an incentive to grow maize.

Incenting farmers to grow maize

Generally, A1 farms are 50 hectare plots that are parcelled into ten 5 hectare lots as follows:

Illustration 11 (click on illustration to zoom in)

Crop farming is about economies of scale; which cannot accrue to farmers when the land tenure is fragmented (as is shown in illustration 11).

To incent A1 farmers to grow more maize, the GoZ would have to "encourage" adjacent A1 farmers to form 50 to 100 hectare farming cooperatives, as is shown in Illustration 12, below:

Illustration 12 (click on illustration)

Generally, the cost of producing maize, on a large scale, under irrigation is approximately USD 1,500 per hectare. At an average yield of 12 tonnes per hectare, the profitability of the farming cooperative in Illustration 12 can be computed as follows:

Table 4 (click on table to zoom in) Adapted From: Zimbabwe Commercial Farmers Union data

As Table 4 shows, the farming cooperative in Illustration 12 can expect to make a profit of between USD 201,000 and USD 237,000, over a six month period [9].

This translates to an income of between USD 3,350 and USD 3,950 per farmer per month, which is over ten times the monthly income of the average Zimbabwean.

If this set-up doesn't incentivise the average Zimbabwean A1 farmer to grow maize, I don't know what will!

***

From the analyses in this post, it is evident that the following measures would need to be taken to bolster Zimbabwe's output of maize:

1. Build new irrigation infrastructure and refurbish the nation's "legacy" irrigation infrastructure. From the data, it is evident that the main cause of Zimbabwe's food insecurity is erratic rainfall. Thus, it is reasonable to assert that the input that the GoZ should provide is water.
2. Increase the producer price of maize to at least USD 520.00 to improve the cost-benefit equation of farming maize. This measure can be abandoned once Zimbabwe's commodity exchange becomes fully operational. When the Zimbabwean commodity exchange is fully operational, it would be prudent for the government of Zimbabwe "free" the market for maize.
3. Encourage A1 farmers to form farming cooperatives. This measure would allow maize farmers to gain economies of scale. And, it would greatly enhance the cost-benefit equation of growing maize.

[1] Tobacco and maize have overlapping planting/growing seasons. For small holder farmers, who own plots with an average area of 5 hectares, there is an implicit trade-off between growing maize and growing tobacco.
[2] I have deliberately excluded supply.
[3] This figure was computed using the following formula: Average weight of tobacco delivered by each registered grower divided by The average yield of tobacco per hectare (i.e.=  1,500/2,000).
[4] Generally, the quality of tobacco that is delivered is directly related to the availability of water and electricity. These key inputs are scarce, and their availability isn't improving. Thus, it is reasonable to assume that the quality of tobacco that was delivered has not registered any material improvement.
[5] I am assuming an average yield of  2 to 4 tonnes per hectare.
[6] Computed by multiplying the annual requirement of maize by the producer price.
[7] The per tonne cost of producing maize, under irrigation, at an A1 farm is USD 380.00.
[8] When Zimbabwe was still the breadbasket of Africa, only an elite few large scale farmers would produce maize at an average yield of 12 tonnes per hectare. It is highly unlikely that the average A1 farmer would produce maize at such a yield, unless they are using genetically modified seed - something that will not happen in Zimbabwe anytime soon.
[9] This profit estimate is for the range of scenarios where the GMB pays purchases maize at an amount between the import parity price and the equilibrium price (refer back to Illustration 10).

Zimbabwe 2013 Elections: What happened to the MDC? Answer: Self-Cannibalism

In a 2nd of March 2013 post titled Zimbabwe's Forthcoming Elections: Political Equilibrium, Campaign Points and Herestetics, I wrote and I quote:

"The forthcoming Zimbabwean elections will certainly be interesting to follow. While it is difficult to predict who will win at this stage (there are many undecided voters in Zimbabwe), only a finite number of cards can be played. In this post, I have attempted to exposition these cards (barring the violence and opponent suppression and intimidation cards).

Regardless of who wins or loses, my wish is for the Zimbabwean elections to be conducted in a manner that is peaceful and yields an incontestable outcome. Because, this is what the Zimbabwean economy really needs to bounce back."

According to pronouncements that were made by key observer contingents, unlike the 2008 elections, the 2013 harmonized elections were generally free of violence (i.e. my wish, for the Zimbabwean election to be conducted in a manner that is peaceful, was granted) [1]. Thus, the 2013 Zimbabwean elections can generally be regarded as free.

However, the 2013 elections featured a host of irregularities that will continue to polarize future debates on the extent to which they were fair.

Truth be told, I expected the outcome of the 2013 harmonized elections to be dreadfully close. However, as Illustration 1 unequivocally demonstrates, the outcome of the 2013 elections was anything but close:

Illustration 1 (click on illustration to zoom in) Adapted From: Sokwanele

Illustration 1 demonstrates that the MDC-T was trounced in the 2013 elections; the party experienced a monumental reversal of fortunes. Interestingly, the gulf between the victors and the losers left everyone in a state of bewilderment; generally, everyone expected a marginal gap.

A number of narratives have been posited to explain the 2013 election outcome. They can be summed as follows:

1. Zanu-PF was the better political party: Proponents of this narrative believe that the MDC-T: 1) lost touch with the evolving needs of the electorate; 2) fashioned a negative campaign that lacked resonance; 3) lost its appeal to voters owing to an admixture of the MDC-T's corruption and incompetence (which became evident during the lifespan of the GNU), and; 4) was derailed by its president's sex scandals. Proponents of this narrative also believe that the party's ground-game fell short; they believe that MDC-T did not go on an aggressive-enough drive to register its supporters and turn them out on Election Day. Evidently, this narrative unequivocally speaks to a failure of leadership.  
2. The Zimbabwean elections were rigged: Some quarters allege that (the aforementioned) irregularities skewed the electoral outcome in favor of Zanu-PF. Succinctly put, they allege that the election was rigged. To be fair: In 2009, a Government of National Unity (GNU) was formed to: 1) Stabilize the Zimbabwean Economy, and; 2) Repair the country's institutions (in a bid to deliver fresh free and fair elections). When the 2013 harmonized elections were held, the inclusive government had not yet concluded the implementation of the Global Political Agreement (GPA). Simply put, the MDC-T was complicit in the failure to revitalize the (very same) institutions that yielded the outcome that it's challenging [13]. Like the previous narrative, this narrative also points to a failure of MDC-T's leadership.

Over the last week, I did my own (informal) research to identify the dynamics (within the MDC) that could have spawned the scenarios that are encapsulated in Narratives 1. and 2. My research largely entailed reading a broad cross section of informed opinion pieces on the MDC, and, talking to people who knew of: 1) the power centers in the MDC; 2) the party's internal political dynamics, and; 3) the characters of its leaders (and how they influenced the party's decision-making dynamics).

In this post, I will present a meta-narrative that integrates the disaggregated information pieces that I gathered. A caveat: This narrative should be regarded as a subjective proposition on the root causes of the failure of the MDC (in the 2013 elections).

The narrative will argue that the MDC has, since inception, been unconsciously alienating key power and support bases. Owing to this, the party has been progressively weakening. This weakness culminated in the party's poor performance in the 2013 harmonized elections.

***

...The Big Tent Party: How the MDC came to be

The MDC was founded in 1999, and its founding constituents are shown in Illustration 2 as follows:

Illustration 2 (click on illustration to zoom in)

*** The title should read: "Founding Constituents of the Movement for Democratic Change"


As Illustration 2 demonstrates the founding constituents of the MDC were:

1. Unionists: By 1995, Zimbabwe's GINI coefficient had risen to 0.5 [3]; i.e. it had exceeded the threshold for social unrest (0.4).  In an environment with diminishing purchasing power (inflation) and anemic GDP growth [2], it was only inevitable for this unrest to find its embodiment in Marx's classical battle between Capital and Labor [17]. During the 1990s, anti-establishment unions increasingly sprawled-up to enhance workers' job security and lobby for more earnings per unit of man hours. To increase their bargaining power, unions united under a federated organizational structure that is known as the Zimbabwean Congress of Trade Unions (ZCTU). The ZCTU was, until 1999, headed by Mr. Morgan Tsvangirayi. Together with leftist student unions, the ZCTU organized a host of popular uprisings. The uprisings / protests harnessed the discontent of the urban masses and brought the economy to a grinding halt (albeit for periods of time not exceeding a week) [4]. Generally, the unionists argued that the Lancaster House Constitution was an instrument for the suppression of vulnerable pockets of Zimbabwean society. The key asset that the ZCTU possessed was grassroots support from urban masses and students from tertiary institutions.
2. Deposed Farmers: When Zimbabwe attained her independence (in 1980), 46.5% of the nation's arable land was owned by around 6,000 commercial farmers (most of whom were of European descent) [5]. In contrast to this, 5.103 million people (~ 70% of Zimbabwe's population in 1980) lived in what were known as Tribal Trust Lands. Generally, these were stretches of marginal territory that had been over-exploited. To reverse this legacy of colonization, in the late 70's the Independence Movement and the UK government agreed that, going forward, land tenure would morph under a willing-buyer-willing-seller principle. Under the terms of the Lancaster House Agreement, the Zimbabwean Government (GoZ) had the right of first refusal in all sales of agricultural real estate in Zimbabwe. If the GoZ identified a farm that met its 'resettlement criteria', it would purchase it (using funds from a £44 million grant from the British government), sub-divide it and resettle landless communities on the farm. By the mid-90s, it had become evident that this policy would never yield its envisaged outcome: the rural population of Zimbabwe had increased by nearly 50%, and, the land ownership patterns remained relatively unchanged; rural areas were overpopulated. A series of ad hoc constitutional revisions saw the majority of white commercial farmers losing their farms without compensation [6] [17]. These farmers coalesced into an anti-establishment movement that sought to (via political and legal channels): 1) Reclaim their possessed farms, and/or; 2) Compel the Zimbabwean government to compensate them for property lost and damages incurred [7]. Generally, deposed commercial farmers possessed the following key assets: idle pools of funds and highly potent lobbying machinery.
3. Civic Organizations: During the 1990s, Zimbabwe endured successive maladies that stretched the nation's welfare system and its traditional social support system. They include: 1) Yield-cutting droughts, locust and army worm invasions; 2) Economic pains that stemmed from austerity measures (like the Economic Structural Adjustment Programme) [18], and; 3) Decimation of the nation's human capital and social fabric by the HIV/AIDS virus. Between 1990 and 1999, a broad array of single-issue civic organizations [8] burgeoned to combat the first and second-order effects of the-said maladies. By and large, the civic organizations regarded themselves as guardians of their target communities. And, they sought to secure constitutional protections for the vulnerable. This rallied them around a new cause: lobbying, under the auspices of the National Constitutional Assembly, the Zimbabwean government to formulate a new "people-driven" constitution. The key assets that civic organizations possessed were their relationships with foreign governments, international donors and transnational entities.
4. Academics and Lawyers: They were invariably principals of civic organizations and leading educationists at tertiary academic institutions. Their key asset was/is their ability to build, using a multi-stakeholder approach, organizational infrastructure around social and political causes.

Illustration 3, below, depicts the overlapping relationships between the MDC, ZCTU and the National Constitutional Assembly:

Illustration 3 (click on illustration to zoom in)

*** The diagram is an over-simplification; the reality is more complex.


As Illustration 3 demonstrates, when the MDC was founded in 1999 [9], it was essentially a subset of the National Constitutional Assembly (NCA); its structure, human capital mix, financing strategy, vision, mission and objectives were the products of the NCA ecosystem. Together with other constituents of the NCA, the MDC campaigned for a "No" vote in Zimbabwe's 2000 constitutional referendum. By and large, the NCA opposed the Chidyausiku Commission's draft constitution because:

• The draft did not have a retroactive limit on the number of terms that a sitting president could serve.
• They felt that the draft gave legal immunities to the state.

While the Commercial Farmer's Union was not part of the NCA Ecosystem, it unofficially joined the NCA in its "Vote No" campaign, because it was in opposition to the Section 2.3.2 of the draft constitution which, according to the pronouncements that it made, would violate private property rights. The section read, and I quote:

In view of the overriding considerations set out in subsection (1), where agricultural land is acquired compulsorily for the resettlement of people in accordance with a programme of land reform, any compensation payable must reflect an equitable balance between the public interest and the interests of those from whom the land is acquired.

In the assessment of compensation for the compulsory acquisition of agricultural land, regard must be had to the following factors: 

(a) the history of the ownership, use and occupation of the land;
(b) the price paid for the land when it was last acquired;
(c) the current use to which the land is put;
(d) any investment which the State or the acquiring authority may have made which improved or enhanced the value of the land;
(e) the resources available to the acquiring authority in implementing the programme of land reform;
(f) any financial constraints that necessitate the payment of compensation in installments over a period of time; and
(g) any other relevant factor which may be specified in an Act of Parliament.

Thus, during the "Vote No" campaign era, an unwritten alliance was forged between the MDC and the membership of the Commercial Farmers Union (CFU): Members of the CFU would fund the MDC, and, the MDC would reciprocate by insulating them from the loss of property.

***

Interestingly, the MDC was an usual fixture on the Zimbabwean political landscape. Unlike its adversaries, the party did not have a monolithic ideology. Under the banner of "Change", it had the flexibility to move to the ideological "left" or "right" of any position that its key rivals took. This flexibility allowed the MDC to:

• Link major and contradictory principles;
• Build a fusionist coalition of groups with disparate needs and wants.

Succinctly expressed, the MDC was a "big tent party" that housed the entire spectrum of centrist and leftist viewpoints.


...Balance of Power and Alienation of Supporters

Illustration 4, below, shows the 1999 balance of power in the MDC:

Illustration 4 (click on illustration to zoom in)

As Illustration 4 demonstrates, in 1999 Unionists had the highest amount of power in the MDC. They could:

• Drive their agendas even when there was resistance from other constituents. 
• Get other constituents to do what they would not otherwise do.

Their power stemmed from the grassroot support structures that they had cultivated, and, the political capital that they had built through their collective bargaining endeavors. Unfortunately, nothing in their antecedence had prepared them to manage an organization with a diverse range of viewpoints, like the MDC.

In 2001, the leadership of the MDC faced its first real internal challenge. The vocal extreme left of the party, of which Mr. Munyaradzi Gwisai was the poster child, advocated, as a proactive measure, for the party to: abandon its centrist position and move leftward to occupy the ideological terrain that the incumbents had seized.

To be exact, they encouraged the party to formally:

• Embrace the land reform exercise that Zanu-PF was spearheading.
• Champion pro-working class socialist policies (that were similar to the policies that Zanu-PF implemented in the pre-1990 era).

These recommendations, were from the vantage point of the leadership of the MDC, unpalatable for the following reasons: 

1. The MDC would alienate Deposed Farmers if it embraced the land reform. If this happened, their sizable financial contributions would evaporate. 
2. The land reform policy, was regarded, in Western quarters as a regressive policy. Embracing it publicly would, in essence, mean a certain PR death for the MDC. This would, in turn, make it difficult for the organization to secure the continued support of international community.
3. They knew that the 1980s-era socialist policies were unsustainable; the policies would increase Zimbabwe's already ballooning debt - which would culminate in austerity measures (that would ultimately hurt the working class) [14].

To preserve internal harmony and the party's international brand, the leadership of the MDC saw it fit to boot-out the extremists. By failing to find the middle ground between the party's official position (on land reform) and the position of "the socialists", the MDC condemned itself to a future of being caricatured as "a stooge of the West that desired to reverse the gains of the liberation struggle". [10]

In urban areas, this caricature did not influence the electorate's perception of the MDC. However, in rural areas, i.e. where 70% of Zimbabwe's population resides, this caricature defined the electorate's perception of the MDC. Understandably, this made it perennially difficult for the party to make political inroads into rural Zimbabwe.

The next challenge for the MDC came in 2005, i.e. during the run-up to Zimbabwe's senatorial elections, when the leadership of the MDC was split between participating / not participating in the elections. Basically, the camps that were at loggerheads included: 

• The Tsvangirayi camp (i.e. the camp of the party President) which asserted that the senatorial elections were unconstitutional. And, it advocated for the party to boycott the elections.
• The Ncube camp (i.e. the camp of the party's Vice President) which urged the party to participate.

This squabble tore the MDC into two; the Welshman Ncube breakaway faction and the Morgan Tsvangirayi MDC formation.

Owing to Mr. Ncube's preference for a bipartisan approach to resolving national issues, the rank and file members of the MDC suspected that he was a Zanu PF apologist. Thus, it is reasonable to assert that he did not have a broad base of internal support. Due to this reality, most people argue that the split had no material impact on the MDC. However, this is a simplistic way of looking at things.

Ncube had a stabilizing effect on the MDC. He always deferred to the party's constitution for guidance on resolving conflicts, disciplining party members, and most importantly, selecting candidates who would represent the party in elections. Further, he always made sure that others did likewise.

This insulated the party from the grass-roots discontent that would have stemmed from "translucent and partial" methods of appointing candidates and resolving conflicts. When he left, no one assumed this stabilizing role. Unilateral, corrupt and deleterious appointments proliferated [16]. And, they had the net-effect of alienating the party's grass roots support structures: "A house divided against itself cannot stand" (- Abraham Lincoln).

Prior to the formation of the Government of National Unity (GNU), the MDC formations and Zanu-PF sought to establish common ground. Zanu-PF was adamant that it would never enter into any negotiations with parties that did not acknowledge the permanence and irreversibility of the land-reform exercise. [15]

Both MDC formations acknowledged the permanence and irreversibility of the land-reform exercise. For Tsvangirayi's MDC, this weakened the support it received from:

• Commercial farmers who hoped to reclaim their "acquired" properties.
• Members of the international community who supported Tsvangirayi because they were incensed by the manner in which Zimbabwe's land reform exercise was conducted.
• Quarters that did not understand why Mr. Munyaradzi Gwisai had been booted-out of the MDC in 2001 when he had clearly advocated for a position that the MDC had eventually taken [15]. Some members of the MDC felt that this was a sign of its leaderships' lack of principles.

Owing to the first two bullet points, the money spigot gradually ran dry. Thus, the party's 2013 campaign was chronically underfunded. Generally, the opposition parties that participated in Zimbabwe's 2013 election preached the gospel of Jobs, Infrastructure, Education and Healthcare. Otherwise put, the opposition parties spoke from the same script. Due to the-said funding constraints, the MDC was unable to differentiate its campaign. This gave Zanu-PF the upper-hand in "swing constituencies" [11]. 

***

The Makones: During the pre-GNU days, a certain entrepreneurial couple appeared from relative obscurity and became close to Mr. Morgan Tsvangirayi. Unlike the other members of the MDC, the Makones were not part of the NCA Ecosystem (refer back to Illustration 3). Hence, most MDC members were perplexed by their almost-immediate ascent to the party's upper echelons. Generally, most MDC members feel/felt that the couple: 

• Was cordoning Mr. Morgan Tsvangirayi off from everyone. They argue that owing to this, Mr. Tsvangirayi lost touch with the grassroots sentiment.
• Had accumulated too much power in the party, and;
• Was overriding/hijacking the MDC's constitutional mechanisms for appointing party officials and election candidates. Owing to this sentiment, some of the candidates who failed to secure nominations in the party's primaries stood as independents in the 2013 elections.

By and large, members of the NCA Ecosystem unequivocally opposed the secondment of Mrs. Theresa Makone to the Home Affairs Ministry, i.e. the Ministry that was responsible for the production of Zimbabwe's contested voter's role (and administering elections in line with SADC's guidelines and principles for democratic elections). They argued that there was nothing in her antecedence that had prepared her to manage such a crucial ministry. 

No one listened to them.

***

Shortly after the death of his wife, Mr. Tsvangirayi became embroiled in a sex scandal of epic proportions. This scandal eroded the support that the MDC received from:

• Civil society: Generally, the leaders (and mid-level functionaries) of most Zimbabwean civil society organizations are socially-assertive-highly-educated-financially-independent women (who can best be described as feminists) [19]. To them, Mr. Tsvangirayi's "genuine search for love" epitomized the objectification of women. Crudely put; they were mortified by Mr. Tsvangirayi's conduct. And, this cost him their support (particularly the support of the leaders of gender advocacy groups).
• Western Political Entities: Who generally regard sexual misconduct as an unforgivable political sin.

By and large, less support translated into less funding and lower chances of having a resonant campaign.

During the 2013 constitutional referendum, elements of the NCA urged the electorate to vote against the adoption of the COPAC draft constitution. As it did in 2001, the NCA argued that parliament deserved most of the powers that the draft had consigned to the presidency. 

The NCA appealed to its erstwhile collaborator, Mr. Tsvangirayi (who was now the Prime Minister of Zimbabwe), for support and more time to campaign for the "No" vote.

Curiously, Mr. Tsvangirayi declined to give the NCA his support and he rubbished its campaign. To put icing on the cake, he also called the body "stupid". In response to this, the principals of the NCA launched their own political platform (using the human capital that they would have otherwise contributed to the MDC's campaign). 

The loss of the NCA's support was tantamount to a loss of the MDC's brain trust.

***

Hence, one can argue that MDC has, since inception, been unconsciously alienating key power and support bases. Because of this, the party has been progressively weakening. This weakness culminated in the party's poor performance in the 2013 harmonized elections.

Therefore, the answer to the question "What happened to the MDC?" is: it succumbed to self-cannibalism.

#TotalRandomness: The answer to the question "Is there anything like self-cannibalism in nature?", is Yes - see Illustration 5 [12]:

Illustration 5 (click on illustration to zoom in) Adapted From: Mike Rugnetta

[1] The key observer contingents that monitored the 2013 elections include SADC, the African Union, China and the Zimbabwe Election Support Network.
[2] Between 1990 and 1999, Zimbabwe's inflation rate (CPI) grew at a mean rate of 28.57% per year. During this time period, the inflation rate bounced between 17.36% per year (in 1990) and 58.52% per year (in 1999). This contrasts with the 1980s where inflation grew at a mean rate of 12.81% per year and hovered between 5.402% per year (in 1980) and 23.12% per year (in 1989). This simple comparison illustrates that Zimbabwean inflation skyrocketed in the 1990s. During the 1980s, the mean real growth rate of Zimbabwe's GDP was 5.22% per year and the real GDP growth rate hovered between - 1.907% per year (in 1984) and 14.42% per year (in 1980). This contrasts with the 1990s where the mean real GDP growth rate was 2.906% per year and the real GDP growth rate hovered between -9.016% per year (in 1992) and 10.36% per year (in 1996). This simple comparison illustrates that the Zimbabwean real GDP growth contracted in the 1990s.
[3] 55.74% of Zimbabwe's annual income was held by 20% of the people.
[4] These 2-4 day protests were, in union parlance, known as "stay-aways".
[5] For a detailed history of the land ownership patterns in Zimbabwe, read this Wikipedia article.
[6] Post-1990 iterations of the Zimbabwean land reform policy include Compulsory Land Acquisition and the Fast-Track Land Reform Exercise.
[7] By and large, the farmers who lost their land were members of the Commercial Farmers Union (CFU).
[8] The civic organizations predominantly focused on the following issues: Human Rights, Women's Rights, Children's Rights, Democracy, Corruption and Empowerment.
[9] The MDC was founded after the trade union movement's first National Working Peoples Convention in 1999.
[10] I think that it was Bruce Bueno De Mesquita who once said "There always exists a principled way to defend any position, no matter how extreme it is".
[11] (Click on the "Margin tab" after clicking on: this link) Generally, the constituencies shaded in navy blue are the swing constituencies.
[12] There is a Shona saying that loosely translates to "A big snake does not bite itself" (The original Shona version is: "Nyoka huru haizvirumi"). Illustration 5 disproves that saying. 
[13] Actually, the MDC has now withdrawn its election petition. For the reasons, read Morgan Tsvangirayi's affidavit. 
[14] The socialist policies of the 1980s lifted a large number of people out of poverty in a very short space of time. That is an unequivocal fact.  Generally, they were donor funded. When the flow of donor funds started to dwindle, the government of Zimbabwe increasingly funded the policies using debt from multilateral finance institutions - which increased the nation's indebtedness. This culminated in forced austerity, which was, in turn responsible for creating the social pressures that spawned the MDC.
[15] It would have been politically disastrous for the MDC to advocate for the reversal of the land reform policy. Zimbabweans from all walks of life regret the chaotic and violent manner in which the land reform policy was conducted. However, they do not wish for the policy to reversed. As far as the land question is concerned, Zimbabweans would like the "reform farmers" to be more productive. One can argue that it was only inevitable for the MDC to embrace land reform. Thus, it is reasonable to assert that the loss of support (for the MDC) from the deposed farmers was unavoidable. 
[16] A lot of the businesspeople who have had interactions with MDC-appointed Ministers, deputy Ministers and Councillors say that the MDC's capacity to administer "still has a long way to go"; i.e. the party's appointees are largely unqualified to govern. This could stem from a flawed system for selecting and appointing candidates.
[17] Contrary to popular belief, the violent farm seizures that occurred in Zimbabwe were not the product of a top-down government initiated process, but a bottom-up process wherein landless people invaded farms. This process started in the late 1990s, in a communal area called Svosve. And, it was only rubber-stamped by the Zanu-PF government in the year 2000. It was this official endorsement made the invasions ubiquitous. Like the union-organized popular uprisings of the 1990s, the invasions had their origins in rising inequality. Thus, they should in essence, be regarded as nothing more than class warfare. 
[18] For a brief description of the havoc that ESAP wrecked, read this excerpt from Chimhou and Woodhouse: "The origins of Zimbabwe’s political and economic crisis are often identified in the Economic Structural Adjustment Programme (ESAP) the government initiated in 1990 as part of a financial agreement with the International Monetary Fund (IMF). The key consequence of ESAP was the rapid closure of significant sections of manufacturing industry and a wider collapse of the country’s non-agricultural economy during the first half of the 1990s. Rapid reduction in formal private and public sector employment followed, with 45,000 jobs lost by 1995 and wages falling from 64 to 40 per cent of national income (Moyo and Yeros, 2005: 175). Those remaining in work by the mid-1990s saw the value of their wages eroded by inflation to only 75 per cent of their 1990 value in the private sector, or only 61 per cent in the case of the public sector, and “inflation in the second half of the 1990s probably cut real earnings in half again” (Addison and Laakso, 2003: 461). Widespread unrest, including strikes by government employees reached a critical point when, in 1997, War Veterans staged public demonstrations, threatening to split the ruling party." 
[19] Civic organizations are ostensibly apolitical and they generally do not actively campaign for political parties. However, they are particularly adept at: 1) spotting leadership talent in rural areas. 2) generating campaign-bolstering knowledge on the dynamics and resonant issues in target communities, and; 3) Establishing links to donors who seek to expand the Zimbabwean democratic space.