THE government often makes us believe that we are the blessed and lucky beneficiaries of serendipity and benevolence where correlation is actually causation such that economic policies we choose are never said to be correlated to our present socio-economic challenges.
The economic situation has become so obviously wrong that only mental weaklings’ have their attention diverted from the economic mess caused by failed, feeble and feckless domestic economic policies.
Our economic challenges require a new strategic direction specifically so with the regional trajectory of a COMESA with trade and investment barriers limited. The country has to make strategic choices to avoid being a supermarket of its COMESA peers. The government seems to have no coherent strategic choice and direction regards COMESA integration overtures.
My take on making Zimbabwe competitive compared to regional peers is chronicled hereunder.
The government must deploy a deliberate policy to fund the country’s innovation funnel to germinate business gazelles. There are no dynamic and bold private equity and venture capital firms willing to support gazelles, greenfields, disruptive and out of the ordinary ideas. Our traditional finance firms are risk averse and scared of new ventures. They are more comfortable with funding the ordinary.
Unfortunately the ordinary in Zimbabwe are colonial relic firms that have lost competitive edge as compared to COMESA peers. Without government direct funding of the innovation funnel, the country will not pass the commercialization challenge. Often times regional peer companies will pivot faster on the ideas and leapfrog local firms.
I am a propose that the government should ideally look beyond creating an enabling environment but move to investing in shaping and creating markets if the country is to make a mark in a more trade liberalized COMESA.
Zimbabwe is presently in a competitiveness abyss. One of the viable ways to restore and leapfrog regional peers is through funding innovation and research to enable a new big industrial revolution possibly in the mold of Sitra (Finland), Brazilian Development Bank and CIIP (Canada) all which have incubated viable new business ventures. I have no doubt it’s a better proposition than a 10% indigenization levy which is geared at taking over colonial relic companies which have lost the competitive steam.Advertisement
Another dimension is to ensure that human capital is aligned to COMESA strategic imperatives. The country has a generation of graduates who lost vital skills, knowledge and abilities because of decades of idleness and underemployment. On the other side of the dichotomy some of the country’s best skills are now resident in the Diaspora as economic refugees.
To compete and win in COMESA the country requires a human capital renewal strategy. It has to find innovative ways to develop new capabilities, find people and share expertise that are in sync with new business models.
The regional competiveness trajectory must be alive to business transformations and realities which include globalization of labour markets; mobile, social and cloud computing, managing diversity and inclusion, global cultural agility, big data and analytics (including impact of technology on skills requirements), corporate governance and rule of law.
The strategic trajectory should re-skill the lost generation of graduates, ensure corporate leadership renewal skewed in favour of millenials and attract the economic refugees who have acquired global skills. Instead of a drive to attract remittances from economic refugees, a better proposition is to attract and retain key skills. This will benefit the economy in a more viable and economically sustainable manner. The government can create an enabling environment through employment tax reform, skills retention policies and other incentives to achieve the human capital strategic intentions.
Against all factual data that we a need new economic path, lobby groups mainly industry association, chambers and confederations are complicity in dragging the country into the economic mess just like the companies they represent. They are misdirecting the government to implement uninspiring, unimaginative, retrogressive, regurgitated and loud sound nothing industrial revival policies that support archaic colonial inherited industries.
Most of these inherited industries should be taken off government life support so as to enable creation of policy and strategic space for new industries, products and services. Zimbabwe must design and develop the strategy map by choosing industries, products and services that the country has comparative advantage over and is able to pivot the same for competitive advantage. Self sufficiency is no longer possible in the new world order of globalized of markets and costs. Protectionism should be used sparingly to protect companies with potential that are in their infancy.
Government should be realigned to induce competitiveness through designing a lean and effective administration which reduces expenditure. Current realities will only increase government borrowing and an increase in taxes. Higher taxes deter investment.
The solution is a comprehensive government audit which will ideally inform the need for organizational design based on desired systems, structure, skills and governance. The government should organize work around value addition, increase span of control, reengineer processes for efficiency, merge ministries and government departments, multi skill and reskilling,invest in empowerment and job depth, shed non-core workforce, attract critical skills and enable total employee engagement, invest in e-government,privatise noncore state enterprises and implement private-public partnerships.
Another pertinent strategic imperative is to have a relook at the efficacy of using the United States dollar as our reference currency and its impact on competitiveness in multiple sectors .We do not seem to be doing well on the use of monetary interventions to spur competitiveness as compared to regional peers because we use a currency we have the remotest control over. Closely related to the monetary issue is a litany of fiscal reform required. The reforms include implementing an investor friendly tax system, acceleration of setting up economic free zones, amending the opaque and now centralized investment approval system, promote a one-stop investment centre, shed off structures that promote rent seeking behaviors and abolish multiple business registration gateways, promote property rights and more importantly amend equity restrictions laws. These wholesale changes require commitment to implementation rather than just blue prints.
Zimbabwe is broke and it has no fiscal space to maneuver to enhance its competitiveness against most COMESA peers especially on infrastructure and utilities. To enhance the availability of power, coal, railway equipment and infrastructure, road systems, water and ICTe infrastructure the strategic trajectory should be privatization and private-public partnerships. The intention to make utilities and infrastructure should move from the ZIMASSET document to implementation
Zimbabwe must act with urgency to plan and implement a strategy to be competitive in identified industries. Without this strategy we are at the mess of being a giant supermarket of COMESA peers.