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Joram Nyathi Spectrum
BRITAIN, it now appears, is in the process of redefining its relations with Zimbabwe. It is a painful process having to choose between business and politics, and accepting a humbling reality that it is possible to do business with a former colony without being master of its politics.
That epiphany must have followed Zanu-PF’s overwhelming victory in the July 31, 2013 harmonised elections. If you can’t beat them, the saying goes, join them. And there is no doubt much of the pressure to eat humble pie must be coming from business after waiting for too long in the rain as politicians promised to deliver Mugabe’s head.
British companies must have realised that the world does not operate at the pleasure of the empire anymore. The emergence of China and Russia in the form of the Asia Infrastructure Investment Bank and the brics Bank have created new centres of power and investment funding options outside the ambit of the IMF, the World Bank, and well beyond America’s immediate reach. And they are fully aware, perhaps more than we appreciate ourselves, of Zimbabwe’s mineral riches which give it “oversized” importance compared to its physical and population size.
So the British embassy in Harare has acknowledged that there are a lot of commercial opportunities in Zimbabwe despite the politics. The embassy said in a report that the country was “softening” its stance on indigenisation.
Here comes the crux: “A number of international firms, particularly but not only from brics countries, have begun to make serious investment into Zimbabwe, given high return opportunities.”
The British are not alone. The Americans are coming. So are the French and others. But they are also, all of them, victims of a herd instinct. They must maintain the posture about an immutable common EU position even when, individually, they must sacrifice their own.
But they will have to live with the reality that land reform in Zimbabwe is irreversible and that there is no softening of stance in relation to ownership of natural resources. The 51-49 threshold is the policy position. The sooner they accept this reality the better. Zimbabwe is not the first, and certainly won’t be the last, to impose this principle, which has been relaxed in other economic sectors and special economic zones.
It is a pity Britain is having to follow the lead of “international firms” when it should have enjoyed pride of place as the former colonial power, if only it had accepted the reality of Zimbabwe’s sovereignty and the driving force behind the liberation struggle.
The embassy report is remorsefully telling: “UK firms are often well-placed to win business, given historic links and a compatible business culture. As well as rich resources and strategic location, Zimbabwe has a highly literate workforce, with few industrial relations problems.”
All this is a far cry from the political lies about the absence of the rule of law and violation of property rights. Politics has been abused to punish Zimbabwe for the land reform programme. Efforts to isolate the country, while they have been damaging, have not enjoyed universal support. Yes, it is time to leave politics to locals, and do honest business.
Enter Robertson
He is a local economic analyst, and very rightwing. He has no sympathy for Zanu-PF and any of its policies and politics. It killed Rhodesia.
But let’s give the devil his dues when he tells truth to mismanagement. He recently made unfashionably frank comments about why some companies perform better than others in the same industry and similar trading environment.
Hundreds of companies have shut down in Bulawayo over the past 10 years. Reasons cited include uncertainty over water (blame Government), liquidity crunch (blame indigenisation), obsolete machinery and influx of cheap imports (blame Zanu-PF policies).
Robertson chose to go against the grain, and he should not expect to get a medal in a country where everything which goes wrong must be blamed on Zanu-PF for deterring foreign investment messiahs.
Robertson said poor management was a decisive factor in the survival or collapse of an enterprise. The better the management, the higher the chances of a firm’s success. The less enterprising will always find an alibi, or invent one, why they are not doing well. And Zanu-PF’s immanent pervasiveness is rich fodder.
Robertson was responding to a simple question: what accounted for the polar fortunes of garment manufacturers and retailers, Harare-based Paramount Garments and Bulawayo’s Archer Clothing Manufacturers?
For a long period Archer was under judicial management, until April this year when it was taken over by Paramount. Since the takeover by Paramount, instead of shutting down, Archer seems to have received a new lease of life.
Bulawayo mayor Martin Moyo is said to have revealed recently that Archer had recruited more than 500 employees since the takeover. Paramount financial director Jeremy Youmans reportedly said Archer should reach full capacity by October, with a staff complement of 850.
Archer still operates from Bulawayo, and I believe from exactly the same physical premises and the same business environment, customers and competitors. They are not cutting labour, instead they are recruiting and training while the likes of Merlin, National Blankets, Karina Textiles and Lasker Brothers are either under judicial management or have been liquidated.
That’s where Robertson came in with tips which make the difference between death and survival. According to NewsDay Business, Robertson said Paramount, which has taken over Archer, had “a reputation for very good management”. This is part of what such a management does: “Excellent management will ensure that they have well-designed products that customers want, well-planned floor place, properly maintained machinery and good debt recovery to reduce the need for bank loans and high interest costs.”
These comments have wider implications beyond specific companies mentioned. The most salient is the danger of credit financing, especially in relation to nations. Zimbabwe’s so-called debt overhang which weighs so heavily on the economy is a result of borrowings. That debt, now estimated at $10 billion, has become an albatross. But we still continue our dalliance with the IMF and the World Bank, to leave a burden that will place future generations in thrall to the moneylenders forever.
Then there is the embattled nation called Greece. In the past few weeks it was forced to close its banks because of a huge debt to fellow EU members and the IMF. They all wanted Greece to adopt the IMF’s austerity measures – labour reform, pension reforms, more privatisation, review collective bargaining, make further market reforms and cut on social welfare.
Prime Minister Alexis Tsipras resisted. He was forced to call for a referendum on the matter. The people of Greece spoke, but no one listened. Finally, Tsipras was beaten into a frazzle in marathon negotiations in Brussels and forced to bend to the will of Greece’s creditors. Greece’s parliament, too, was forced to swallow the bitter pill by passing the austerity reforms on Wednesday.
What emerges clearly is that debt can easily kill a company or strip a nation of its independence and sovereignty. Loans have no respect for the will of the people as the Greeks have just discovered. They impoverish already poor nations.
This is what a protester said of Greece after adoption of the austerity pill by parliament: “Greece is being treated like a modern-day Sisyphus. We will be forever rolling the rock of austerity.” An MP opposed to the deal described it as “social genocide”.
Robertson’s comments on contrasting performances in the textile sector are obviously not exhaustive; there are likely to be other factors. But what I liked most is that for once, he avoided the worn out and all too familiar lament about all company closures being caused by lack of foreign investors and Zanu-PF’s indigenisation policies. He chose to address business and eschew political convenience.
It is an important distinction. Policy decisions at the micro-level can change a company’s fortunes. Once upon a time in an imaginary country there were big names like Doves Morgans and cimas. In their place today there is Nyaradzo and FML. What do the customers want?
It can’t be denied that zanu-PF policies have become a camouflage for corruption, incompetence and, sometimes, outright economic sabotage to further political agendas. Even the British have realised the folly of their politics.
Let’s listen to Robertson one more time: “Good managers have a better chance of getting their companies through bad times,” he said in a flash of blistering candour, “but that should not give Government any reason to generate bad times.”
Online Reporter