Last week I was invited to the one-day conference hosted by the Business Council of Zimbabwe (BCZ) at Wild Geese Lodge under the theme “Zimbabwe 2013: A Manifesto for Business.”
Opinion by Omen Muza
Since its objective was to chart the way forward for business in 2013 and beyond, I guess the word manifesto proved irresistible particularly in an election year.
In this instalment, I outline some random insights from various speakers at the event, which I have classified under seven road categories for ease of reference. The conference was sponsored by the British Embassy and ably facilitated by Joseph Mverecha of Agribank.
Business Model Businesses must reduce complexity, for they can no longer grow profit simply by increasing prices; they should instead seek to reduce the costs of doing business in order to survive. Assuming they survive, but don’t voluntarily reduce prices, they invite regulatory intervention as has happened with banks.
Diversification of exports should not only be about growing the production base, it should also be about finding new markets for US dollar sales, in order to deal with, for instance, the exchange rate risk attendant to use of the South African rand The country is plagued by a psychic of conspicuous consumption which shows up in the country’s vital statistics through de-industrialisation, an unfavourable balance of payment (BOP) position and negative capital formation.
Indigenisation Indigenisation must move away from the current redistribution model to one which emphasises growth of new businesses or creation of new wealth.
Consideration should also be given to conferring some flexibility to the 51% indigenisation equity threshold, particularly for infrastructure projects in order to attract foreign direct investment.
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The indigenisation construct must also be decoupled from partisan political interests and linked to the national interest instead. There is need to finalise legacy issues attendant to the land reform and indigenisation so that we can all devote our full energies to productivity.
Public-Private Sector Dialogue Over the years, particularly during the lost years from 1998 to 2008, businesses developed a culture of acquiescence, of agreeing with everything politicians said. Resultantly disengagement set in and business slowly, but surely lost the respect of its partners in government.
Business must now find its voice again if it is to restore the equilibrium of the social contract. Innovation must come from synergy between government and the private sector, and cannot be founded on attempt to polarise the debate about who between the two of them should drive economic growth. Research and policy-making Not enough is being done to fund research and it is imperative for the private sector to assist government by co-funding research.
Availability of funding for research helps to retain skilled academic staff and stem the brain drain. Policy-making should be steered away from the tendency to craft and enact policies that seek preservation of power or personal enrichment at the expense of the common man and the common good. Dearth of Capital If there was as much money in the informal sector as is often claimed, it would show up in an increase in aggregate demand and reflect in a high quality of life for those in that sector of the economy.
Non-availability of capital is at the heart of the economy’s problems.
There is, therefore, a need to put in place a solid foundation to attract capital into the country.
Country Risk We must prioritise how to enhance the flow of liquidity into the economy through clear and credible policy pronouncements and user-friendly investment policies.
Business should lobby for the removal of sanctions in order to reduce the perceived country risk.
Corruption adds to the cost of doing business and amplifies country risk, so business must make an effort to root it out.
Beneficiation As country, we must be clear about the type of beneficiation we want, and which minerals we need to focus on because we can’t beneficiate all forty or so of the country’s known minerals given the huge investment outlay required.
Feedback: [email protected]. Omen N Muza writes in his personal capacity.
