Promoting a risk free environment

conversation.
The official pointed out that the poor performance of the local industry and the severe loss of employment that Zimbabwe is currently faced with presents unimaginable risk for Econet despite its current excellent performance.
I must say I totally agree with him when he says that the country’s leading mobile service provider has a vested interested in the Buy Zimbabwe Campaign but I must add that he brought in a new dimension that I had never imagined. Risk and its association with the buy local campaign.
Risk should be an important concern for the Buy Zimbabwe Campaign and any local company that has any desire of protecting its business interests.
Although the local economy is on the mend households and businesses continue to face substantial risk.
Unexpected changes in price and Government policies, trade imbalances, market distortions, and macroeconomic instability are some of the important sources of risk.
Clearly the country’s experiences over the last decade have limited the long-term ability to cope with risk especially at an individual level.
Promoting a risk free environment would thus require a “community sharing of risk” bringing the troubled sectors together with those that are performing well. Under performance in one sector has a bearing on the entire economy.
Imagine a situation where Econet has to pull out of the Zimbabwean market because it projects heavy losses due to a decline in its subscriber base influenced by heavy job losses in key industries in the next 10 to 15 years.
In any case, only a fraction of Econet’s current five million subscribers are active users with the rest just being mere owners of the lines because the greater majority fall into the low income earner bracket that cannot afford luxury goods.
Econet would be more comfortable if a majority of its subscribers could actually afford to make regular calls using its lines.
Now that the country is on full throttle with the Industrial Development Policy on the cards it is important that the country determines the appropriate risk management policy to be implemented when the Government and foreign investors step in to address the economic challenges.
No investor would inject their money in an economy that has no activity. Such an economy presents a risky environment, which is associated with huge losses.
For the economy to be active there is need for households to have stable incomes which allow them to increase their spending.
Stable incomes come from stable jobs and stable jobs come from a stable industrial base.
The bottom line is that we have to promote a vibrant local industry for all of this to happen and only then can an investor be confident to commit their resources.
Promotion of a vibrant industry also involves a fair and even distribution of the national cake.
I have realised that a huge problem that we have in the country is that vital information is held captive in offices.
I recently learnt that without necessarily worrying about millions of dollars being deposited into foreign banks that end up denying locals access to loans, we have a national account that holds deposits from institutions such as Zimra and various ministries and Governments departments.
These deposits can be evenly distributed amongst local banks instead of it all being banked with a single financial institution.
This will increase local banks’ ability to extend loans and bring credibility to our local institutions.
It goes without saying that it is important for businesses, Government ministries and departments to lead in the process of buying Zimbabwe.
Let us make sure that our local banks have equal access to the national cake, which will empower them to increase their lending to both individuals and businesses, at favourable rates.
Businessman Mr David Govere gave some interesting insights at the National Economic Consultative Forum International Business Forum hosted during the Zimbabwe International Trade Fair.
One of the things he said that caught my attention is that as Zimbabwe we need to be clear on where we need to locate ourselves at the centre of strategy.
There is need for us to identify the critical resources that we have as Zimbabwe so that we do not waste time trying to develop areas where there is very little potential.
He quoted American rapper 50 cent who says, “Before you can improve anything start with reality.”
One of the realities is that we cannot imagine any meaningful economic growth if we continue with our miserable outputs.
We need to make our resources productive and go beyond mere food security into creating products that are well engineered, well processed and have high value.
Besides, we are part of a continent that boasts of 900 million consumers that the rest of the world also wants to access.
We just need to ensure that our performance is aligned properly, focused and positive so that we can also enjoy our share of this market.
Till next week . . . God Bless.
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