The Zimbabwean Dilemna

After an absence from writing and rather choosing to travel, l have taken time to take notes about all things economic. I asked myself why the Dollar has brought more problems for our nation than solutions. I also asked myself why industry has not turned around even with the little foreign direct investment coming into the country and also the different funds that have been setup to aid the entrepreneur. We have seen Youth Funds launched to aid the young businessman and we have seen countless mechanization initiatives being launched. Rather than debate the political nature of these projects and initiatives the gist is that somehow all these have been meant to grow our economy and see to it that we can talk about a better Zimbabwe that is hinged on a perpetual growth model. IMF reports all the way to World Bank publications do refer to Africa as the next growth frontier so it cannot be a sin to try equipping Africa for growth.

One interesting observation that l made in my travels was the issue of our road networks. According to the Zinara work has begun on US$ 206,6 million Plumtree to Mutare highway that is presently being rehabilitated by Infralink, a joint venture company between Zimbabwe National Road Administration (ZINARA) and Group Five (G5) International of South Africa has changed. However, the scope of works on the project has changed and will no longer be rehabilitation only but the new scope of work will now see the dualisation of the Bulawayo to Harare and Harare Bulawayo highway. There is a lot of importance in the success of this project which will provide an efficient transport link…

Zimbabwe is a land locked country and thus we do not have direct access to ports meaning all importers within this country pay a premium to land goods as opposed to countries with direct access to the seas. Unfortunately because landing goods through the skies is rather too expensive for a country such as ours the second and most viable option is the road network. It is open to debate but currently the cheapest mode of transport which is rail currently requires funding to become viable once again. NRZ general manager, Mike Karakadzai said the once vibrant parastatal needed about US$2 billion for its long-term rehabilitation of infrastructure. The company is facing the daunting task of improving its communication signals that are too old and need replacement. NRZ’s track system is also in disarray. At its peak in 1998, NRZ used to carry goods in excess of 18 million tonnes compared to 3,7 million tonnes carried in 2011. So this sad news it becomes more apparent why l am weighing more towards a road network being more viable for transportation of goods.

I will be quick to say that our local industry is far from being able to sustain our ever growing economy. To be quite frank and blunt Zimbabwe has become more of an import country loosely termed as a warehouse nation. With the facts at hand, l wish to write about our transport network. The quicker our government prioritizes the efficiency of our road network the quicker things may improve. A good road network will ensure better supply of both local and foreign goods. In addition this helps avoid artificial price increases due to scarcity of goods in the market. Industry has also turned to import most of its raw material as opposed to having a long supply chain of manufacturing all the way to retailing due to aging machinery and viability issues. This means our transport network becomes a backbone to industry efficiency. If government is to look at growth it has to come from strong infrastructural growth which means more roads, wider roads and smooth flowing traffic. This will ensure turn around on arrival of goods improves thus increasing turnover for our firms.

My second observation was the issue of being competitive. I have been privileged to have many informed discussions with a wide array of professionals who complain about the Chinese products that keep flooding our country and have led to the collapse of the motoring industry along with the clothing industry just to name a few. Contrary to popular belief l support the influx of these goods as the world has also followed suite. Just because the world has accepted these products does not mean to say l am happy about local industry collapsing. Rather l feel we should build our models into the Chinese system of trade. It is not even viable for us to build factories and try competing. No, rather my point is to say we should outsource some services to the Chinese. Most developed countries have outsourced industry to China and chosen to develop prototypes from their nations and ensure production is in China. The competitive advantage that China has is that is has a perpetual supply of man power and contrary to popular belief the Chinese earn less than Zimboz on a ratio scale of social classes.

Most Fortune500 firms have exported factory services to Asia and the host nations have then kept administration, advertising and distribution to their home countries. One financial report states that manufacturing in Zimbabwe may never be able to compete with the huge economies of scale that the Chinese bring to the table for certain products. However, to the extent that proximity to market is important, or where the products are uniquely Zimbabwean and require ongoing tweaking to satisfy customers, there will always be a place for local manufacturers. In addition, there is an opportunity for some existing manufacturers to focus on understanding local demand, designing appropriate products and outsourcing the manufacturing to the Chinese. These can be cheap locally branded cell phones and other electronic accessories designed specifically for the local market or anything the imagination and economic viability can conjure. So before my critics pounce on me l have presented a balanced view on the issue at hand.

My older brother in the diaspora is always keen to remind me that he earns his salary whereas us locals at home hustle our salaries. Just to decode his statement he is of the opinion that locally we are not at the production levels that would justify the salaries that we are earning. As much as most locals feel that they are being underpaid, the wage burden in the country unfortunately still cannot be supported by the levels of commerce taking place. Foreign nations pay well even from a minimum wage point of view when comparing to our country. However it is quite unfair for the work force locally to expect the same levels of remuneration with counterparts out there as we are certainly not pushing the volumes that are present elsewhere. Smaller countries than Zimbabwe are turning over more business than here and therefore it is not factual to say we are a small nation and thus can never reach high volumes. That is the reason why many firms keep retrenching, why many have gone into judicial administration as facilities from banks disappeared into the wage book instead of production and why eventually many firms have closed doors.

National pride is required to fix our nation with so much potential. One fine example l came across in my travels was that many people in South Africa are more than happy to buy original disks. This is not confined to local disks alone but even foreign. This is doing business just right which l wrote about in my earlier articles. The taxman is there to help build our schools, widen our roads, ensure we buy goods at the correct price and see to it that citizens are happy. However if we promote quasi-businesses which have no direct benefit to the economy (pirated enterprises) we are in trouble, these may include smugglers, pirates and tax evaders. We need a level of national pride that is happy to give back to the country that looks after it, a success level of commerce that is above board. Our standards need to improve locally; it is not about the Chinese or any other nations but us. If we tighten our standards the Chinese will bring better quality goods, this will allow for better competition as the playing field is leveled. A level playing field gives us a chance, but poor systems will hamper our initiatives.

I dream of a Zimbabwe where we can buy bread for the right price, where flying is affordable and not only because Air Zimbabwe just launched a promotion, where options are available when making purchases. I look forward to my banker calling me about my eligibility to access a vehicle loan and where a mortgage is available for me to purchase my dream home. We have a lot of puzzles to solve, the Zimbabwean dilemma, l choose to confront our short comings and not throw complaints irresponsibly. It is all about doing things right and right does not mean quick, growth is more like success which normally are earned!