Barclays MD: Exiles can help reboot economy

Spread This News

Following is a speech made by Barclays Bank Zimbabwe managing director, George Guavamatanga, at the 2013 edition of the Zimbabwe Achievers Awards in London on Saturday.
The CEO of Zimbabwe Achievers Awards International, Conrad Mwanza asked me to talk about how Zimbabweans in the Diaspora can make an impact back home. This topic of how Diaspora can contribute to the economic and social development of Zimbabwe has been discussed quite extensively, has been the subject of countless conferences and an issue which various policy makers have grappled with back home. I have personally lost count of the number of road shows and conferences that we hosted trying to convince the Diaspora, developmental agencies and investors to participate in the Zimbabwean economy.
I am honestly hard-pressed to find anything new to add to this call. If preachers can stand by the pulpit everyday calling people to repent, who am I not to do the same to encourage my kith and kin to participate in the Zimbabwean economy. However, I will not beg you to participate in the Zimbabwe economy, begging has never been my philosophy. I believe that people should make conscious decisions on how they can allocate their resources including time and if Zimbabwe is not part of the matrix then let it be.
I will not go to length trying to give you updates because I know most of you keep abreast with what happens in Zimbabwe. The advent of technology has made this even more possible. I will provide high level insights into the salient features of our economy that I believe would make you consider participating in the Zimbabwean economy.
The hyperinflation era which I believe most of you are quite familiar with, took its toll on the Zimbabwean economy. It is an open secret that the entire public infrastructure needs to be upgraded including power, transport, water and sanitation networks. Firms across all sectors are operating below capacity and need retooling. Social amenities such as education and health need to be improved. I consider these seemingly worst things to come out of the lost decade as just a tip of the iceberg. The real iceberg is the psychological set up of our people.
Lost decade
The personal profile of Zimbabweans worsened during the lost-decade and is affecting our ability to identify opportunities and address challenges substantially. Retrogressive behaviours such as lack of savings culture; lack of long term thinking; lack of patriotism and self-confidence as well as rent seeking are prevalent.Advertisement

Unfortunately, individuals with such a psychological set up are now our employees, our politicians, our teachers and even our clergymen running various organisations. The reason why I am so concerned is that resource allocation is determined by investment and management decisions of these individuals resulting in a ‘garbage in, garbage out’ syndrome. No wonder why issues of poor strategies and planning; poor corporate governance; lack of a compliance culture and lack of organisational citizenship behaviour are common features in our economy.
You may agree with me that such psychological set up will not maximise use of resources. Wastage is our biggest enemy. I know that it takes time to change people’s mentality but I believe that if we start finding ways of reducing waste; we automatically start to promote a thrift culture which is critical to economic growth. There is a strong link between a thrift culture and entrepreneurship or innovation. Countries such as China, India, Taiwan, Thailand, Australia, Canada and United Kingdom are classic examples.
The fact that Entrepreneurs particularly through SMEs are the major drivers of economic growth is as old as the hills.  SMEs have strong backward and forward linkages with big firms which creates a more stable economy.
However, not all forms of entrepreneurship are beneficial to Zimbabwe.  Joseph Schumpeter one of the leading researchers distinguished between what he termed ‘necessity’ entrepreneurship and ‘opportunity’ entrepreneurship. Necessity entrepreneurs are those who create their own small businesses because they cannot find other work. On the other hand opportunity entrepreneurs are those who disrupt or change the way things are done.
Currently Zimbabwe is characterised by necessity entrepreneurship which reflects the psychological set up that I highlighted (above). People are starting enterprises because there are no jobs.  In most cases the businesses require little education and low start-up capital. At best, these entrepreneurs support themselves and help to reduce unemployment. While job creation and employment are important economic indicators, necessity entrepreneurship offers limited value because their businesses are concentrated in already oversaturated markets in largely informal sectors of the ‘bazaar’ economy.
Traders economy
Zimbabwe is now a traders economy, all businesses just buy and resell. This has to change if our economy is to grow and this is where you come in as the Diaspora.  Zimbabwe needs opportunity entrepreneurs because they have a huge positive impact on economic development. Our dream to promote a thrift economy requires a radical shift in mind-set driven by a catalyst.  You are the right candidates to drive opportunity entrepreneurship.
The latent but biggest asset that you Zimbabweans in the Diaspora have is your experience and exposure. You have opportunities to see, feel, smell, hear and taste different things in the most advanced nations under the sun.  My heart bleeds when I see such wealth going down the drain as you fail to translate your experiences into something meaningful to Zimbabwe. The last time I heard about you in Zimbabwe is when you were building houses and people used to say ‘his so and so is working in London’.
Even those from Manchester and Liverpool are considered to be in LONDON back home. I am glad to note that the audience is well diversified; we have musicians, journalists, business people and specialists including engineers, programmers, doctors and lawyers.  You are the crème de la crème of Zimbabwe.
We are on record lamenting how brain drain robbed Zimbabwe of its best talent but I now believe that it was a blessing in disguise because we can now tap into the same talent again. In all your different fields of practice you have seen the best practices, processes, products and service. Most of the things that you consider here as basic are not available in Zimbabwe. I know some of you who visit Zimbabwe regularly agree with me that more often than not you were frustrated with something. That frustration demonstrates that there is an opportunity to change.
Just look around you, copy and paste it in Zimbabwe. You will find out that it is just a matter of plugging and playing. If any customisation is required, you will be surprised to find out how innovative you are. This is what other nationalities in the Diaspora are doing. Look at the Israelis, Iranians, Indians, Malaysians, Chinese and so on.
Our telecommunication sector is now the envy of many because it is good at replicating what other firms around the world have done. A decade ago the sector was not anything to write home about, but today it is now worth almost US$2 billion. If you look closely at the services they are offering, they are not entirely new. You may just value add on the existing products, service and impact lives.
You have more access to finance than anyone else in Zimbabwe when you identify a profitable venture because you can build real networks. These connections create opportunities for investment, trade, outsourcing and the transfer of knowledge and technology from UK to Zimbabwe.  We know that there are many organisations here in UK that can provide developmental aid to some of the communities in Zimbabwe. What is required in most cases would be your influence in the networks.
If you analyse the structure of any industry in Zimbabwe, you will find out that it is dominated by a few large players and nothing in between. The structure of the economy is unsustainable as it can be likened to keeping only the Big 5 animals in a conservation park forgetting that they rely on vegetation and small organisms to live. We have done this, by ensuring the bulk of financial capital in the system, goes to these big organisations, creating monsters in the process.
When organisations are more complicated, and so big that they are more powerful than Governments, they are ever more likely to engage in activities that are not beneficial to economy. Economists would also call this ‘socialising losses, while privatising gains’. In the end, they on aggregate, deliver least value, than when the same resources are applied to the bottom of the pyramid firms that I am urging you to form.
Small but super
I am not saying NO to large organisations. Our economy certainly needs organisations with scale, provided they are efficient and responsible. What we clearly want less of, is small cliques of super organisations that pay little attention to their role in society. So, we want more of the good ones coming up through the system and this is where you fit in as entrepreneurs. You will find out that super organisations are now finding it difficult to find good firms to supply them with critical materials.
Find key processes that you can eliminate for the super organisations. The reason why every day we hear some of the super organisations unbundling by creating SBUs is a sign that they are seeking efficiencies. A clever entrepreneur will seek ways to close the gap or come up with a disruptive innovation that gives the organisations a run for their money.
I spoke about the state of our public infrastructure which I said is in a bad state. It is a fact that the amount and quality of a nation’s economic infrastructure has an important bearing on economic growth. It is often viewed as the wheels of economic activity since it provides the environment for productive activities to take place and facilitates the generation of growth.
I know that funding of infrastructural projects is always a challenge, but governments the world over are increasingly turning to Public Private Partnerships (PPPs) to deliver efficient and cost-effective infrastructure and services.  PPPs are preferred because they shorten project delivery times, share risks, achieve better value for their money and increase innovation in their infrastructure rollout and provision of services.
Such partnerships provide opportunities for private sector organisations to apply their skills and experience to infrastructure development as well as mobilising finances for long-term infrastructure investments. Some of you, have more experience in managing and implementing PPPs. Thus you have comparative advantage to participate in such arrangements given their complexity.
I am not asking you comeback to Zimbabwe but we just want your participation in the economy. The moment you start actively participating in the economy, I believe that the spirit will automatically encourage us to start challenging the way we do things.  This will greatly transform the economy towards entrepreneurship.
Please come to the party, our friends from the Far East are seeing opportunities that we locals are not seeing as we nurse our hyperinflation hangover. Honouring those doing great tonight is a welcome development because it shows that we can still make it in any environment. I look forward to attending a similar event hosted in Zimbabwe celebrating your achievements.