The effects of hyperinflation on the Zimbabwean construction industry

• Main Author: Moyo, Admire
• Format: Others
• Language: English
• Published: Nelson Mandela Metropolitan University 2010
• Subjects: Inflation (Finance) > Zimbabwe; Zimbabwe > Economic conditions; Construction industry > Economic aspects > Zimbabwe
• Online Access: http://hdl.handle.net/10948/1197

Less than two decades ago, Zimbabwe was a symbol for the rest of the world of what Africa could become (Dell, 2005). DiSilvio (2007) contends that independent Zimbabwe was an economic success on route to attaining status of the most “developed country” in Africa. Contrary to expectations, by 2003 the Zimbabwean economy was shrinking faster than any other economy in the world at 18 percent per year (Richardson, 2005). Reports indicate that the Zimbabwean economy is in crisis and has since been set back by more than 50 years (Matikinye, 2005). This phenomenon necessitated the need for an investigation to ascertain its cause in Zimbabwe. As a result, the research identifies and presents hyperinflation as the root cause of the crisis in Zimbabwe and illustrates the validity of this assertion with a focus on the Zimbabwean construction industry. As part of the research inquiry, a review of related literature was conducted. The literature review illustrated the generic effects of hyperinflation as well as the effects of this phenomenon in action in Zimbabwe. The literature study was followed by a questionnaire survey. The questionnaire was completed by 23 contractors and 7 clients from a census of contractors and clients in Zimbabwe. The questionnaire consisted of a number of variables, which the respondents were asked to rate vis-à-vis the effects of hyperinflation in the construction industry. In summary, the questionnaire sought to determine the causes of hyperinflation in Zimbabwe, its specific effects on the construction industry and how respondents thought the phenomenon could be mitigated so as to revive the Zimbabwean construction industry. The techniques of re-scaling, in conjunction with descriptive and inferential statistics, ranking and quadrant analysis were applied to the data. Results from these analyses revealed a high degree of agreement among respondents vis-à-vis the effects of hyperinflation on the Zimbabwean construction industry. The interpretation of the results further revealed that hyperinflation has undoubtedly led to the collapse of the Zimbabwean construction industry. In conclusion, the research, applying the interpretations of v the survey findings, prescribes a number of ways in which the Zimbabwean construction sector may be resurrected. Among the recommended prescriptions, there are a number of debatable issues that arise that the researcher proposes should be subject to future study.