adminObert J Z Sibanda
THE last decade has witnessed unprecedented economic challenges that had biting and crippling effects on business operations. The whole country was affected, although Bulawayo was singled out as the most affected city that witnessed the ugly effects of the economic turmoil. One of the major symptoms of this economic malaise was deindustrialisation, a topic that became a signature talking point for all business gatherings in the City of Kings.
There was a lot of debate in the City of Kings about the deindustrialisation of Bulawayo which was once the industrial hub of Zimbabwe. The debate escalated from informal discussions to cabinet task forces. To a large extent the debate has been over simplified and very thin on empirical facts although what has been glaring is that the city has been left unattractive for doing business, influencing the great trek (economic migration) to other cities and beyond the borders mainly to South Africa.
To the best of my knowledge, while no dip stick survey has been done with results presented to the public, it is estimated that the number of companies that have closed are more than 90. The general assumption is that the companies that have closed shops in Bulawayo have relocated to Harare. The discourse surrounding this relocation has centred on mainly three causatives; that companies have relocated because of political reasons (marginalisation), economic challenges (sanctions), socio cultural issues and general water problems.
It is also important to note that there are also many companies that have just closed shops and have not relocated to anywhere because their headquarters were here. As long as the people of Bulawayo and those who are concerned about the revival of Bulawayo do not invest time and money in research to identify the real causes and to what extent such causes have contributed to deindustrialisation, it will always be a problem to proffer solutions or rather, they will continue to deal with symptoms and fail to resolve the problem.
In order to appreciate how some of the issues are being proffered as reasons for deindustrialisation, their extent and impact on business, it is important to unpack them using the components of PEST analysis (Political, Economic, Social and Technological. I will only discuss them not so much as causes of deindustrialisation, but I will seek to highlight how the impact on the business in general and the business in and around Bulawayo in particular
Political
Politics has been entirely attributed to the downfall of the region. There is a general consensus that the region is marginalised and is not getting a fair share of the national cake. It is important to unpack this variable in order to appreciate the real issues that are peculiar to this region or other regions outside the centre that affect business.
Centralisation of decision making in Harare
Doing business when you are a non-Harare resident is very difficult. A political decision has to be taken to ensure that there is decentralisation of power to avoid the harsh reality of having to go all the way to Harare to get approval. Few examples of how this has negatively affected doing business:
Firstly, companies outside Harare find it very difficult to access money from the bank. Most banks if not all, in Bulawayo, cannot approve any amount of money without referring to Harare. In addition, for Bulawayo companies, chances of accessing lines of credit are slim.
However, this is not so for their counterparts in Harare who enjoy close proximity to the decision makers, thereby relating and socialising with them. For Bulawayo companies, at best they can be only close to the branch manager, who unfortunately can only recommend, since approval of any application is considered/ done in Harare— even for small amounts! Therefore, there is a need to decentralise decision making to a certain extent.
Secondly, Bulawayo based companies find it difficult to compete for bids with their Harare counterparts as well as scout for business opportunities. For instance, businesses that deal with State Procurement Board, have to travel to Harare to collect the tender documents, complete them and then travel again to submit. This is tedious, time consuming and unnecessarily expensive. All the registration processes, even for informal tenders are done in Harare.
SPB therefore needs to decentralise part of its functions to the regions; especially mundane functions such as collection of tender documents and registration of SMEs who are participating in informal tenders.
Thirdly, and almost linked to the above, for any licensing and registration of businesses, one has to go to Harare. As noted earlier, surely a simple process of registration and licensing that is currently being done solely in Harare could easily be done at regional or provincial offices.
Fourthly, concentration of all Government authority and institutions favour Harare-based businesses. Currently all Government offices, embassies, NGOS, Parliament and other strategic offices are in Harare.
Harare is getting very congested, while other cities such as Bulawayo are decongesting. Yet a simple approach involving separating the Commercial Capital from the Administrative Capital can cure the problem. This will mean that other cities have a slice of the cake since currently the market is concentrated in Harare. Other countries have successfully used this model.
In South Africa, Pretoria is the Administration Capital, Johannesburg is the Commercial Capital and Cape Town is where Parliament is located. The other example is Nigeria where they separated the Commercial and Administration Capital to Lagos and Abuja respectively.
This helps not only to decongest the capital but also to grow the market for other regions. And besides, the current scenario in Zimbabwe has had a ripple effect in that, without the glitzy and glamour associated with Harare which directly influences spending habits, Bulawayo will always remain an unattractive destination, a pale shadow of its former glory. The presence of the diplomatic community, high ranking officials, and top business executives in a city ensures that it becomes attractive for doing business.
NB: Article to be continued with focus on economic, socio-cultural and technological factors as well as proposition on way forward.
Mr Obert Sibanda is prominent businessman based in Bulawayo and former president of the Zimbabwe National Chamber of Commerce (ZNCC). He writes in his personal capacity and can be contacted on 0772252088 or email [email protected]
Online Reporter