adminRobert Zhuwao Correspondent
On the 13 April 2016, the nation woke up to a Presidential statement to clarify Government’s position on the indigenisation and economic empowerment policy. The statement was signed by His Excellency, President Mugabe.
This clarification was pleasant news to probably the whole business community as the bickering between the Ministry of Youth, Indigenisation and Empowerment and that of Finance and Economic Development was destabilising the flow of business in Zimbabwe.
The first quarter of 2016 has not been a good one for business, let alone investment into the country.
I am a battle-hardened black businessman who has been in business for 27 years, therefore, my approach and perception of things will be business-oriented.
I am a businessman first, then novice politician second.
Hence, my bemusement of the past few months on the tiffs between two ministers representing the same Government, moreover the same party.
One wonders whether they could not have resolved their different interpretations of the law and/or act in Cabinet.
Or taken their fight to their offices to thrash out their differences as opposed to dressing each other down in public and via the press.
From a businessman’s perspective, the cost to investment in the country, business flow and commerce in general was high.
With the clarification from the highest office in the land having been given, I believe it is time for the Minister of Youth, Indigenisation to buckle down to work to cover lost ground under his purview.
Whilst our Government ministers were bickering, indigenised sectors of the economy like the fuel sector were falling back into the hands of foreigners.
Reserved areas for locals continued to be dominated by foreigners who have since entrenched themselves deep in the sector. The reserved sectors category include:
1. Transportation: passenger buses, taxis and car hire services
2. Retail and wholesale trade
3. Barber shops, hair dressing and beauty salons
4. Employment agencies
5. Estate agencies
6. Valet services
7. Grain milling
8. Bakeries
9. Tobacco processing
10. Advertising agencies
11. Provision of local arts and crafts; and marketing and distribution of the same
The press statement has the proviso that, “Except for existing businesses”.
This presents a challenge for local entrepreneurs who had been of the notion that foreigners would be pushed out of the reserved sectors to enable locals to take over existing businesses.
This also gives foreigners in these sectors comfort to stay.
As an indigenisation lobbyist and leader of a lobby group, I am not surprised at the wording in the statement.
Indigenous businesses need to convince Government that they have the capacity to fully guarantee longevity of participation in the business sectors that they clamour for bigger participation in. The indigenous businessman/entrepreneur needs to move from being a seasonal business.
A seasonal businessman is one who is in business to retail what may be in demand at that particular moment, be it hair extensions today, then next you find they have stopped retailing hair extensions and are now retailing car parts!
I have written in previous articles on the need for the indigenous business sector to rid itself of chancers, hustlers, conmen, dealers and straight up thieves masquerading as businessmen. A breed of Zimbabwe indigenous businessman needs to be built.
A look at the retail sector will show that retail chains like OK, TM and Spar were able to weather the storms especially during the Zimdollar hyperinflation whilst our own indigenous attempts to develop similar retail chains in the form of Food Chain Group (FCG), Mutomba and Food World fell by the wayside. These are the insecurities that government does not want to see.
These are the crevasses that allow for foreigners to be kept in the loop to safeguard the nation’s food supply. That does not indicate that the indigenous entrepreneur is incapable.
There is need for stamina to survive the good and bad of business.
The need for longevity of local businesses cannot be over-emphasised.
The dream for Africa’s most literate state to lead its economic destiny is achievable.
The ministry responsible and mandated to oversee the attainment of that dream needs to ensure that longevity of indigenous businesses, which is the critical link to the resurgence of the nation’s economy, is achieved.
The country’s economic soldiers are the educated masses in Zimbabwe and the diaspora. B
eing educated without business experience often leads to failure of a project.
Giving out loans to new graduates who have no experience in business may not be a long term solution. Business realities are different from book theories.
Local indigenous businesses need to invest in constant training of their staff.
Holiday retreats often enjoyed by the owners/directors of the business need to be devolved to their staff as holiday retreats with capacity building and training workshops. Most local businesses are struggling to keep afloat.
Even companies owned by our own ministers are not faring any better.
To create employment, these companies need to make money.
Before consideration about dispossession of any foreign owned companies, we need to create the capacity to operate these companies beyond what the current owners were doing.
In my view, capacitating locally constituted companies to surpass those targeted foreign companies may be an option.
Push them out when there is a viable option.
Industry has collapsed and has antiquated equipment.
Rather than giving loans to individuals, Government should consider the option of bringing in identified equipment, set up the infrastructure then float tenders for running the business either on a lease or lease purchase arrangement.
If there is failure to pay one’s obligation, government has the assets to pass on to the next able person as opposed to trying to reclaim borrowed money from someone who will not have the money, leading to a high default rate.
It may be a better option than doling out money.
With retail, SPVs for importation need to be set up to enable for economies of scale when ordering inputs and equipment for that sector. Relevant line ministries have the statistics of the country’s needs and import patterns.
We need to look at what machinery is needed to manufacture the stuff, set a model where, if possible, to include a production line of small units leading up to the final product.
Different beneficiaries run the production line before passing on to the next stage.
That will be a step towards formalising and capacitating the informal sector.
Let Zimbabwe rebuild its collapsed industry with modern electricity light equipment.
The programme gets supported with a rigid quality control and training regime. Once these programmes are in place, foreigners in the reserved sector(s) gradually get assisted to set up in the right sector for them.
In the case of partnerships on 51:49 basis, strict compliance and an Act that criminalises the fronting of businesses need to be addressed with jail terms set for both parties in collusion.
It would be foolhardy to see a business where the partner lives in the affluent suburbs of Harare and drives to work in a top of range vehicle whilst his local 51 percent partner cycles to work from Epworth.
The benefits of the partnership need to be shared proportionately with a notable change in lifestyle for the local partner. This is me looking at it from a Zimbabwean mind.
In essence, now that the feud between the two Patricks has been settled, may the two ministries start working to assist businesses so that they start making money. I have met with many businessmen across the country and we are all squealing. When the business makes money, service providers will get business orders from them and thus also employ more people as their businesses grow.
The Ministry of Youth, Indigenization and Empowerment needs to engage organizations which are operational on the ground such as the NBCZ to help assist with engagement on the way forward.
Details and statistics for presentation to them are there. Given the number of foundations, associations, trusts and councils with grassroots information, solutions to the problems on the ground can be addressed. The youth ministry needs to move away from their preferred, designer suit, gold wearing watch and flashy car, preferred groupings and create time and ear for those with the jeans, T-shirt and boot.
The latter may not afford designer suits but they may have ideas and solutions which may turn the fortunes of the country.
Robert Zhuwao is the National President of the National Business Council of Zimbabwe, a registered NGO lobby group, think-tank, demand-based training, capacity building institute for indigenous business development
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