Zimbabwe is Open for Business: Time to Buy Zimbabwe

 

I recently had interesting discussions with family members and colleagues regarding the repeated reports about cement shortages being experienced in Zimbabwe and the causes thereof.

 

Of course, the usual defeatists, doomsayers and alarmists repeatedly made inaccurate reference to the so-called “political illegitimacy” that they guessed was somehow causing cement shortages.

 

Fortunately however, Zimbabwe’s major cement manufacturers publicly put to rest the pessimists by issuing a statement which read as follows:

 

“The [cement] consumption spike being witnessed is a very positive economic growth indicator, which may be attributed to a rise in mortgage finance as well as improved disposable income following a successful tobacco and maize farming season on the back of the Command Agriculture Programme.”

 

In summary, the cement companies stated that the recent spike in demand for cement, which resulted in a supply backlog on the market, is a positive signal of economic growth.

 

There are two interesting observations that I made during this “cement shortage” saga.

 

The first was that in our country we have what I call the subgroup of perpetual skeptics.

 

Arguably, the subgroup of skeptics consists of those ordinary citizens, politicians and even business leaders that choose to whine and whimper about socio-economic conditions without professing practical solutions to the problems thereof.

 

It is this sub-group of skeptics that I’ll be speaking to when I make my point later in this article.

 

The second observation that I made was simply this: If the demand of cement exceeds supply (in a country where we are constantly reminded by doomsayers and skeptics that unemployment is above 80%) then my question is: who is buying cement? Who is building houses?

 

Let me tell you who.

 

It is the farmers, the informal miners, the kombi drivers, the money-changers, the commodity-brokers, the cross-border traders, or in summary the members of that community that we commonly refer to as the informal sector.

 

Let’s remember that in 2017 some of Zimbabwe’s cement producing firms recorded up to 40% increases in profit.

 

To the discerning eye, it becomes clear that there is a vibrant consumer base in Zimbabwe, where people operating in both the formal and informal economies are earning enough to consider building houses.

 

It’s also clear that the moment a person plans to build a house, he or she would know that furniture is also needed alongside, food, electricity-supply and water- all of which require the potential home-owner to have a constant supply of money.

 

In this context it again becomes clear that there is money circulating in our informal sector.

 

Simply put, people who are building will also need places where they can purchase goods and services, like supermarkets schools and transport, and the supply of those goods and services essentially means employment creation and consequently more tax revenue for the state.

 

This all points to potential economic growth as indicated by the cement producer’s statement that I highlighted earlier.

 

Nevertheless, why should all this concern you, the reader, as a citizen, potential investor or a business owner?

 

The answer is simple. Where there is going to be economic growth as is the case with Zimbabwe today, there is also going to be an increase in competition.

 

While the prospective arrival of foreign businesses, investors and capital is good news for our job-seeking citizens, the same prospect should alert local business-owners to adequately prepare for competition.

 

Studies in countries like South Africa, Botswana and Mozambique have demonstrated that when the economic environment is ripe to attract foreign businesses, we find that those foreign firms come in equipped with adequate capital as well as precise market intelligence and this often results in those foreign firms excelling in our markets and ultimately taking business from locals.

 

In summary, for any business owner, it’s important to plan and strategize on how to remain competitive, especially since we anticipate that more and more foreign businesses will be entering the Zimbabwean market very soon.

 

Here are some of the strategies that local businesses can implement in order to remain competitive:

  • Businesses should adopt global best practices and technology (particularly internet). This is particularly necessary in the tourism and hospitality sector where our foreign visitors should be charmed by our Zimbabwean hospitality.
  • Citizens and businesses alike should cultivate the “Buy Zimbabwe” culture. For citizens this means supporting local products, and for businesses this means producing products that are not only locally affordable but also globally competitive.
  • Local businesses should invest in substantive market intelligence. This involves investing in the various forms of market research which benefit business efficiency, explore brand reach and quality and even determine levels of customer satisfaction.

 

Judging from neighboring countries like South Africa, foreign businesses more often than not rigorously implement at least two of the three aforementioned strategies and as a result they excel more than local businesses.

 

As Zimbabwe, we should therefore avoid what is currently the South African situation where politicians and non-competitive local businesses blame their non-competitiveness on “white-monopoly-capital.”

 

Just look at the ongoing war between Uber and The South Taxi associations as an example.

 

Let us not be like that. Instead, let’s embrace the “Zimbabwe is Open for business Policy.” Let’s also Buy-Zimbabwe. But more than anything let’s do adequate market research.

 

If our local businesses follow that approach, they will undoubtedly see positive results in the near future.

 

Tau Tawengwa

 

Email

 

zimrays@gmail.com

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2018 Elections: Putting the Zimbabwean Revolution in Context

 

 

On the 4th of July America celebrated its independence day.

 

 

In fact in Philadelphia, Pennsylvania on July 4, 1776 America made a declaration announcing that the thirteen colonies (which were then at war with the Kingdom of Great Britain) would regard themselves as thirteen independent sovereign states no longer under British rule.

 

 

This makes the United States of America 242 years old.

 

 

Interestingly, at the time that the American founding fathers made the declaration of independence, the economy was only beginning to industrialize, and this was essentially the process of expanding cottage industries (what we call in Zimbabwe “home-based-industries”) to larger scales.

 

 

Historians note that around the time of the American Declaration of Independence, most production in the 13 colonies was agricultural, and at least 90% of eighteenth-century Americans made their living on the land.

 

 

Of course, we cannot ignore that black slaves had been working on American plantations since slavery began in in 1619, and undoubtedly African slaves helped build the American nation into an economic powerhouse through the production of lucrative crops such as tobacco and cotton.

 

 

Nevertheless, my argument here is centered on the fact that at the time of the Declaration of Independence in 1776, America had three key economic assets. These are land, minerals, and labour.

 

 

Sound similar? Of course! That’s because on a smaller scale, Zimbabwe is also very rich in those three key resources.

 

 

However it was the deliberate and focused attitude of the American leadership at the time of the industrial revolution that transformed that country into the giant it is today.

 

 

 

The Industrial Revolution

 

 

 

 

The industrial revolution was largely characterized by automation based on the establishment of infrastructure, which in the American context were the railway and the steam train.

 

 

In our context, this is what President Emmerson Mnangagwa has repeatedly referred to as the mechanization of agriculture and mining and the widening of our infrastructure base.

 

Also, the industrial revolution saw to the urbanization of America’s rural communities and consequently the expansion of markets for goods. Ultimately this allowed for an increase in the American standard of living.

 

 

Furthermore the proliferation of free market capitalism (despite its flaws) incentivized scientific innovation and rewarded hard work.

 

 

All in all, one hundred years after its independence, America had become a global force.

 

 

In fact, by 1900, the United States had one half of the world’s manufacturing capacity and had overtaken Great Britain both in iron, steel production and in coal production.

 

 

 

Re-industrializing Zimbabwe

 

 

I have often heard people speaking negatively about vendors, and how the informal economy in Zimbabwe is nothing more than a nuisance.

 

 

I do understand the logic behind those arguments especially when they come from rate paying shop-owners and business-people that have to accommodate vegetable sellers who sometimes urinate at their shop’s door-step.

 

 

However, I have argued before and I will state again here that our informal economy in Zimbabwe is a constant reminder of our backslide from an industrialized, advanced middle-income economy to the informal economy we are today.

 

 

Yet if we ponder over America’s experience form 1776, we can see that our future is filled with possibilities.

 

 

We are rich in land and mineral resources like America was when it began its industrial revolution. We also have an expansive and educated pool of labour.

 

 

But more than anything else, we now have the political will to re-industrialize, after years of isolationism and counter-productive politics.

 

 

In this light I give credit to President Emmerson Mnangagwa’s “Zimbabwe is Open for Business” program.

 

 

His efforts have once again put Zimbabwe on the international radar for the right reasons and over the months since November 2017 we have seen delegation after delegation from different parts of the globe coming in to register their interests in the Zimbabwe.

 

 

Clearly what we need now is to allow President Emmerson Mnangagwa to serve a full term in office during which Zimbabwe can undergo the process of re-industrialization.

 

 

Judging from American History, what is certain is that the re-industrialization of Zimbabwe is a real possibility if we focus as a nation after July 30.

 

 

At the end of the day, President Emmerson Mnangagwa’s “Zimbabwe is Open for Business” program presents a real opportunity for Zimbabwe to under-go an economic revolution and consequently and economic boom going forward.

 

 

For that reason I believe he deserves a full term in office.

 

 

Tau Tawengwa

 

Executive Director

 

Email

zimrays@gmail.com

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