Online Reporter
A LOT of work has been done under the National Development Strategy 1, which ends this month, to reform and build up the mining and agricultural sectors.
Investors have also been encouraged by ease of doing business reforms implemented by Government.
Going forward, the new stress will be on building on the successes by both the private sector and the State sector through the Mutapa Investment Fund which is expected to completely reorganise State-Owned Enterprises (SOEs).
These enterprises have, for far too long, been seen as part of the problem rather than as a vibrant part of the solution.
There were good reasons why some enterprises had to be set up in the State sector in past decades, or brought into that sector.
Some were straightforward companies operating in areas where private enterprise did not have the will or resources, while others were parastatals set up by Parliament to deal with specific tasks and often given a legal monopoly that was then modified in a partial commercialisation drive.
The trouble has been that those making the decisions were rarely gifted entrepreneurs operating in a pure commercial environment.
Too often other factors assumed more importance than commercial viability, let alone commercial success.
The general problem, also faced within large areas of the then tightly controlled private sector, of inadequate capitalisation and competition, meant that reform was difficult.
This has now changed right across the economy and it is right that the State-owned enterprises are included so that their new legal owner, the Mutapa Investment Fund, becomes what it must be, a sovereign wealth fund building up genuine assets for the people and using those assets to help build Zimbabwe.
Already the enterprises have been removed from the control of the line ministries where they were operating and are now consolidated in the new structure, with business managers rather than administrators or politicians calling the shots.
This allows them to seek investment partners and generally be taken seriously within the business community. Some successes have already been seen in the mining sector on that path, and the whole mess of the National Railways of Zimbabwe is being tackled.
In some areas commercialisation can be complete, and the State enterprise simply be one of the companies in that area operating now efficiently.
In other cases the need for a monopoly is still very relevant. A good example from infrastructure is the railways.
While it seems perfectly possible to have several operators and a mix of private-sector and State-sector companies providing the freight and passenger services, there must be a single owner and operator of the railroad track and signals system.
The old-fashioned need to set up State-enterprises with tax dollars has largely vanished. Zimbabwe is much better at attracting private investment and the oddities produced by the UDI economy should by now have been removed from our systems, as they have from the private sector at long last.
The modern private sector is now growing again, and pushing industrial growth although this time on commercial grounds.
Rather than looking at final stage import substitution and packing to get around import controls, the new industrialists are looking at buying raw materials from Zimbabwean farmers and miners, or even mining raw materials themselves, and building a sustainable industrial base based on value addition.
This has already seen a wide range of successes; we remember when cooking oil was in short supply for example rather than seeing a handful of major producers operating efficiently and even indulging in some price competition.
More successes are on the way.
Textiles are likely to be the next big primary industry in Zimbabwe, with already a far sighted investor bringing in the modern technologies and scrapping museum pieces left on factory floors.
As this industry builds up there will be obvious links and benefits for Zimbabwean farmers. They are likely to have a much better market and more stable and better pricing when selling to a Zimbabwean industrialist rather than some middleman on the global market.
A fair chunk of our agro-industry is already in this position, buying raw materials from farmers and making high end consumer goods, and the culture of going further to produce surpluses for export is growing.
We do not need to be a grain exporter, for example, rather exporting the things you make with grain.
The Mutapa conglomeration needs to be included in this new innovative approach, with no real difference in the managerial and entrepreneurial emphasis between private or public owners.
Many countries, such as Norway, with high natural wealth have successful sovereign wealth funds, along with that spectacular success as a trading and investment nation, Singapore.
But these funds all work properly, and were set up to help maintain stability through good and bad times as well as create wealth.
They act as ideal counterparts for the pure private sector, which as Zimbabwe has seen this year places a lot of trust on a stable economic environment, and knowing that a proper sovereign-wealth fund is actively at work helps cement that stability.
It is not so much a case of either-or, as a case that all parts of our economy need to grow on the right lines.
