adminVandudzayi Zirebwa Buy Zimbabwe
Zimbabwe is grappling with many challenges in as far as economic turnaround is concerned and one of the most obvious of these is primarily industry’s inability to lobby for favourable policies. The general stance is that, rather than being proactive, industry is reactive and not engaging the powers that be in steering policy in a direction that promotes its growth. Even Finance and Economic Development Minister Patrick Chinamasa, recently lamented industry’s poor lobbying skills and capacity at the Buy Zimbabwe Public Procurement Conference held in August this year.
The major problem is that, rather than acting in unison for the good of industry, most companies are operating in silos, concerned only with their own challenges and not those that affect industry collectively.
This silo mentality has done little to achieve any meaningful transformation. Luckily the extractive sector has woken up and smelt the coffee.
This is one sector which has realised that there is strength in numbers and that voluntary arrangements are much better than statutory ones.
The mining sector in general and the Chamber of Mines of Zimbabwe in particular have come to the realisation that lobby and soft skills are critical in influencing policy.
So far, lobby efforts by the gold sector have paid off. Gold miners scored a victory when they successfully lobbied for the reduction of royalties, and had their wish granted when Minister Chinamasa announced the downward review of royalty on gold produced by primary producers from 7 to 5 percent and that of presumptive tax on small scale gold miners from 2 to 0 percent, effective October 1 2014.
Kudos also goes to the Chamber of Mines for its decision to elevate its Joint Suppliers and Purchasing Committee to the strategic level, headed by the Chamber’s President, Mr Alex Mhembere.
The committee brings together suppliers of goods and services and minerals producers to discuss issues of mutual interest, that range from how to improve procurement of mining supplies; how to lobby government for the application of appropriate tariffs; pricing issues; projects being implemented in the industry; constraints to business on both sides and initiatives to promote business. In the miners’ interests, the Chamber has brought together other lobby groups such as Buy Zimbabwe and the Confederation of Zimbabwe Industries in the hopes of creating mutual development.
The Chamber’s efforts to rope in miners with respect to enhancing local procurement are most commendable.
Already, big mines such as Mimosa, Zimplats and Zimasco are measuring themselves on how they are promoting indigenous companies through procuring locally.
Studies are also underway to have an appreciation of the relationship between local suppliers and local manufacturers, especially in light of revelations that most local suppliers are externally sourcing their merchandise. The common argument used to perpetuate this practise is the competitiveness conversation.
People in this country place a lot of emphasis on competitiveness, yet globally, the trend seems to be shifting towards supporting local at whatever cost.
In the UK, for instance, Prime Minister David Cameron has said that, by 2017, tender preference will be given to locals even when their charges are higher than foreigners’. In South Africa, the Black Economic Empowerment policy dictates that, even when South African companies are 50 percent more expensive than other bidders, they are awarded tenders. Now, this is not to say that we are encouraging overprizing and extortion. On the contrary, we are being pragmatic.
The reality is that Zimbabwe is bleeding, and that it is operating on a borrowed currency makes it that more difficult to compete against, for argument’s sake, the Chinese.
Over the last two and a half years, we lost about $9,6 billion in external haemorrhaging through deficits.
This year, this haemorrhaging has slowed down owing to some policies in place but we still have a long way to go in bringing liquidity here.
Clearly, the problem is that parties are not coming together in a many that is structured enough to plug this bleeding. The prevailing information asymmetry that still prevails also does not help our cause. In this knowledge economy, there is need to embrace technology and invest in it.
That way, crucial information is only the click of a button away, and it is easier to synergise efforts.
The mining industry is trying to narrow information gaps through initiatives such as the upcoming Mining Expo (MINEX), which promotes the exchange of information within the sector as well as between miners and their stakeholders. This will complement the Mining Indaba, which is now a permanent fixture and international event for Zimbabwe that identifies mining opportunities in the country and keeps stakeholders up to date with developments in the mining sector.
True, the mining sector still has a long way to go, but they are on the right path of embracing national pride.
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Online Reporter