Developing countries must redefine entrepreneurship


Zimbabwe, like most developing African countries burdened with the yoke of authoritarian oppression, force-feeds citizens with policy prescriptions only meant to satisfy political egos of the ruling elite. Imposing government ministries of “small and medium enterprises” and “indigenisation” will not suddenly turn Zimbabwe into an industrialised country.
Similarly, investing millions of United States dollars in education infrastructure to offer business administration training will by itself not achieve much in economic growth.
Vast flea and vegetable markets in Cairo, Casablanca, Accra, Nairobi, Lusaka, Harare and Johannesburg cannot be credible litmus tests for successful business, because, according to my cousin, they do not contribute to real economic development.
Zimbabwean ministers of “small enterprises” and “indigenisation” – Sithembiso Nyoni and Saviour Kasukuwere respectively – epitomise the flourishing species of authoritarian regime praise singers who perpetuate the lie that simply buying and selling amounts to entrepreneurship.
Ironically, it is dictators that buy votes by deceiving citizens into non-value-adding, non-innovative “income generating” activities only meant to fill up ballot boxes. Importing clothes and cars from Dubai and disposing of them to Harare consumers has no value addition.
Countries like Zimbabwe, Swaziland and the Democratic Republic of Congo are politically unstable, with a productive industry decimated by decades of senseless dictatorship, yet their economies are said to have “survived” because of “enterprising and resilient citizens”. What a load of hogwash!
A country develops while its economy grows when citizens create new products and services that result in more people being employed, consuming and adding to the national fiscus. During electoral campaigns, dictators like Robert Mugabe splash out computers, buses and money to political sympathisers under the guise of “economic development and empowerment”.
As a result of this patronage, the country fails to even produce cooking oil, soap and shoes because there are no efforts to encourage sustainable innovation. My cousin therefore is correct that Zimbabwe, like most African countries suffering from authoritarian dictatorship, will remain underdeveloped until we transform our political thinking.
There is a link between sustainable entrepreneurship and financing, and this chain translates into long-term survival of the banking sector.
The nexus between finance, entrepreneurship, sustainability and long-term growth is an undeniable fact of life.
The Standard Bank, like most conservative “orthodox” commercial banks, has this skewed policy imprint confusing innovation with entrepreneurship. And for a good reason.
The default rate for unsecured loans has been known to bring down the banking sector. Yet it is apparent that restrictive regulations in financing innovation are a negative force in the economic growth projectile.
This is why it is critically important for us Africans to understand and appreciate the meaning and implication of true entrepreneurship. We must exorcise the thinking of banks like Standard that only salary cheques are safe as collateral in securing loans.
At one time in the early part of this decade, Zimbabwean banks or more specifically the financial sector, was registering phenomenal “growth”, yet citizens were getting poorer and GDP was shrinking. This was prelude to the “annexation” of banks by Reserve Bank governor Gideon Gono, and eventually others collapsed under accusation by (Gono) of perpetuating impropriety.
It was during the same period that inflation spiralled to six digits while Zimbabwe’s productive sector almost disappeared. But the strange phenomenon was of a booming “entrepreneurship” in cross-border trade, flourishing flea markets and countless trips between China, Dubai and Zimbabwe.
In rural areas, young men were digging up the countryside to extract and sell gold. Something was clearly wrong.
Africans need to create new social and business solutions as an entry point to entrepreneurship. Deficits in public communication, governance, food, education, health, industry, commerce and infrastructure are an ideal opportunity to innovate for profit.
This is what drives industrialisation, not selling jeans at open markets or vegetables and curios along the freeways. Moreover, financial institutions like the conservative Standard Bank of Zimbabwe defeat the cause of entrepreneurship by not promoting individual inventors but relying on wage and salary remittances.
In its haste to pour scorn on “flea market entrepreneurs”, the bank has adopted collective condemnation even of self-employed consultants who sustained it with valuable foreign currency deposits when the Zimdollar was toilet paper.
Zimbabwean economic policy urgently needs to foster commitment to innovation rather than to flea markets and Chinese shops.