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ZIMBABWEANS need to get the kiya-kiya brand of economics out of their system and adopt proper business practices if this country is to get out of the woods. It seems the generality of the people of this country are still trapped in the hyperinflationary era where the law of the jungle ruled.
The adoption of the multi-currency regime appears to have caught them off guard and some are still in delusionary mode where they expect to reap obscene profit margins through a distorted and unsustainable pricing regime. Thankfully, this is no longer possible.
Giving his take on the country’s economic outlook, FBC Holdings group chief executive John Mushayavanhu said on Wednesday it is not all “doom and gloom” and the so-called deflation in the economy is more a correction of prices than a sign of a shrinking economy.
“If you look at our inflation, I believe that is a correction of past mischief and for me it is a good thing,” said Mushayavanhu.
These words, coming from a seasoned banker, are profound.
Zimbabwe’s deflation slowed substantially after the annual inflation rate gained 0,65 percentage points to minus 0,26 percent in April as revenue from tobacco eased the liquidity crunch. The development has raised fears that the country’s economic activity could be slowing down.
According to the Zimbabwe National Statistical Agency, the annual rate of inflation improved from minus 0,91 percent in March 2013 to minus 0,26 percent in April.
Yes our country had become known for all the wrong reasons from obscene salaries of parastatal bosses to inflated prices. Obviously efforts to correct such malpractices will be met with apprehension from those that had been benefiting from the status quo.
Mushayavanhu is right in his assessment that the country is not in a deflation mode, but going through a phase where it is correcting a pricing distortion caused by the depreciation of the rand and increased competition.
Most people might not agree — especially those in business and positions of power — but it is a fact that many people hung on to those huge margins from the hyperinflation era where they would slap a thousand percent mark up riding on the shortage of goods. This could be the reason why most business collapsed when the country dollarised in 2009 and proper business principles were now required.
But thank God things have changed.
Dollarisation has presented an opportunity to the generality of Zimbabweans and the business community in particular to understand what proper pricing entails.
We know that businesspeople are in it to make money, but they must realise the environment has changed. Where they used to make say a $5 profit on a 20kg bag of mealie-meal without breaking a sweat, now they need to sell about maybe 10 for the same. Running a successful business now requires skill. Opportunists are bound to fail in this environment.
Mushayavanhu could not have said it better when he said, “The message that I want to say is that if you can’t make it in the US dollar era then you cannot make it.” The current stable macro-economic environment albeit with its challenges, presents an opportunity to genuine businesspeople to stand up and display their acumen.
The message is simple. We cannot continue to do things the same way and expect different results.
Zimbabweans need a new culture. A new culture of hard work and not greed. A culture of hard work and not corruption. As the new Reserve Bank governor John Mangudya correctly put it when he assumed duty, the challenges we face as a country are not at all insurmountable. What we need is discipline. Discipline to utilise our resources efficiently. Discipline to refrain from living beyond our means and discipline to know that we need to work very hard for this economy.
It’s now time to put action into those principles and stop complaining. If we continue complaining we will only have ourselves to blame. Let’s work hard to get Zimbabwe working again. It is possible.
Online Reporter