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Kudzai M. Mubaiwa
This season was inevitable following the first quarter introduction and subsequent operation of the interbank foreign exchange market. Rather than ease the foreign currency issues, the past two months just saw the parallel market rate further lead against the official bank exchange rate of the dollar against the local RTGS.
That we would experience major changes was certain, we have been living off many implied and perhaps unintentional subsidies on fuel, services and so data was never going to be spared.
The generous promotions, popularly known as bundles, have been scrapped across networks. These were without a doubt a major contributor for the emergence and furtherance of many small-scale enterprises that could take advantage of the internet for various uses at low cost. With the real cost of internet, the hopes of leveraging the digital age may be lost.
What land was to the agricultural revolution of the 18th century — a means of production, is what the internet is to the fourth industrial revolution. The opportunity of the internet would help everyone, from all income groups to have access.
For Zimbabwe we had been especially well positioned by a combination of factors. Mobile penetration is over 100 percent, most people own or have access to a mobile phone allowing them to send and receive information in text form on SMS, or voice calls on basic feature phones.
The coming of smart phones, even entry level ones, combined with increasing internet penetration rates, further widened possibilities.
Over 5 million Zimbabweans are on WhatsApp and can thus also share images, videos and documents easily locally and across the world. The bundles are without a doubt the most popular. Almost one million Zimbabweans use Facebook locally and this was the entry point for many self-employed folks and small business owners in terms of a digital presence.
Facebook pages have become default in the stead of websites and Facebook groups the most convenient way of transacting. All this was made easy and closed through the financial transactions using mobile money.
It is a fact that in Zimbabwe, the internet has increasingly impacted the operations of small businesses, starting from registration through to production and marketing processes, payments and administration.
The digital economy is the new economy. Mobile penetration rates are very high in Zimbabwe and the internet penetration rate is growing steadily with over 90 percent of users being mobile internet ones. Social media applications such as WhatsApp are widely utilised, as are mobile payment platforms such as Ecocash.
Many Zimbabweans run small scale enterprises and they contribute meaningfully to the economy. It is imperative that current and future small business owners integrate digital tools in their enterprises, and leverage ICT for growth. This may enable them to both compete locally and be able to tap into the global economy as the internet allows unlimited access to markets and scaling outside borders.
To stop this traction by “increasing” data charges sounds backward and retrogressive. And yet basic comparisons will show that this is a needful albeit painful action. What a dollar was for a bundle two years ago is not what is now. Companies that provide data will also need to pay for some inputs and licences in their value chain with foreign exchange. We had been enjoying a subsidised price on mobile data for the longest time.
The internet had made everything cheaper, advertising for next to nothing on social media and bidding groups had become very common. A number of online platforms had been created for goods and services and content creators had been until now getting very good business through online interactions. Many had begun to monetise through adverts, sponsored content and the offline events buoyed by online popularity as “influencers”.
The impact of increase in data is fairly obvious. Most locals will not be able to afford to pay for data for entertainment and it will be minimised to the most important transactions — business and work — where there is a return. Those that depend on the internet for their businesses will raise prices and pass them on to consumers, at which point basic economics kicks in on elasticity, transaction volumes will reduce.
Less transactions result in less tax. Perhaps this is a reality that must kick in and allow business to remodel itself so that it gives value to the correct segment of customers.
To continue as a going concern, a business must have a steady stream of affording clients for that product or service. Customers also must locate themselves in the space of the packages that they afford. Such is the nature of capitalism.
However, there is justification for arriving at a place of mutual benefit for all stakeholders. Data must be priced right so that companies that avail it are sustainable and customers able to afford it on the regular. At the same time, there is a social case to consider, that this resource is one way of positively impacting many people, families, communities and organisations.
It may make sense to have Government partially subsidise this resource, so that innovation and creativity are not stifled and we are able to participate and compete at global level. There may be need to invest in making internet access widely available — in rural and urban areas, then allow data companies to provide the more upmarket services. As we seek to make basics available to every citizen — water, power, roads, health and education services, we need to also push for the internet to reach all.
It is the platform that will democratise information and improve market linkages, enabling a community to attain local economic development from the returns of enterprises that export — their goods can be seen from anywhere in the world with no limitations.
It will provide the young entrepreneur in the high density with access to information that can help them improve their business processes, product or see opportunities for business inclined youth. An increase in data prices will more negatively than positively impact businesses, indeed some kind of intervention is needed so that data falls to levels that are within reach.
Small business owners urgently need this to effectively leverage the opportunity of the internet for enterprise development.
Feedback:Email – kudzi@ investorsaint.co.zw, Twitter – @kedukudzi
Bongani Ndlovu