Saturday, February 22, 2014

(SUNDAY MAIL ZW) Where are the thinkers?
Saturday, 23 November 2013 23:26

There is something scandalous happening to this country’s economy. Everywhere you go, people are talking of a “liquidity crunch” and a “lack of capital”. How has the language of bookish economists gained such currency?

Clearly there is a problem. But what the pundits will not tell you is that, when it comes to the economy, the whole country has become a ridiculous theatre of the absurd.

Let’s look at a few interesting anecdotes. If you are in the timber business, and you operate a sawmill in the teak forests of Lupane, what would be your major costs? They have to be labour, energy (electricity or diesel), machine repair, transport and so forth. Let’s further dissect these costs.

What exactly does the labour cost entail? Paying the workers and supervisors who make things happen. These workers and supervisors are all Zimbabwean citizens. Here is your first absurdity: if you run a Zimbabwean company and you have Zimbabwean workers, why do you find yourself in a situation where you have to pay salaries in United States dollars? Mind you, this is a transaction between a Zimbabwean employer and a Zimbabwean workforce.

The ridiculous scenario does not end there. Once the sawmill owner has paid salaries in US dollars, the worker takes the pay and goes to a neighbouring village where he will buy a chicken for relish. He is buying the bird from a peasant family. These are free-range chickens which feed on insects, plants and the occasional morsel of isitshwala/sadza. The sawmill worker - let’s call him Mike the lumberjack - forks out US$4 for the “road runner” chicken. Once again, keep your eye on the currency being used. The medium of exchange is the US dollar. The setting is deep in the forbidding forests of Lupane, a staggering 12 000 kilometres away from the hot press of the US Bureau of Engraving and Printing which churns out the banknotes.

Mike gets his favourite relish.The seller of the “chicken makhaya” now has US$5 securely stored in her grimy doek. She remembers that she needs some sugar for her tea. Off she goes to the nearest general dealer’s store where she buys a packet of sugar for US$3. The sugar is made from cane grown in the southeast Lowveld. Again, you notice that the medium of exchange is the US dollar. This is a product made in Zimbabwe by Zimbabwean workers for Zimbabwean consumers. For crying out loud, where does the US dollar come in? The shocking absurdity of a Zimbabwean existence!

There are more than 60 countries which do not mint a national currency of their own. The figure may seem quite large, but do not be fooled.

Apart from nations that belong to monetary unions such as the Eurozone and therefore do not have sovereign currencies, most of the countries which do not have their own national currencies are small island nations with no economic clout whatsoever. How Zimbabwe joined the ranks of these forsaken islands is a story that is already in the public domain. But how Zimbabweans have connived to remain in that currency-less category is a scandalous tale that should jolt us out of our collective slumber before it is too late and in the national interest. After all, this proud nation is no midget in the economic arena. This stretch of land between the Zambezi and the Limpopo has been described as a vital part of “the Persian Gulf of precious minerals”. Surely, that must count for something.
It makes you wonder, does it not?

Which brings us to the shrill calls for the expulsion of “foreigners” from the small business sector. Who is leading those calls and to what end?

We hear a 30-day ultimatum has been issued to all foreigners operating retail and wholesale businesses, barbershops, beauty salons, bakeries, employment agencies and grain mills which are classified as “reserved sectors” of the economy. The other reserved sectors of the economy are agriculture (primary production of food and cash crops), transportation, estate agencies, tobacco grading and packaging, tobacco processing, advertising agencies, milk processing, provision of local arts and crafts, marketing and distribution. The concept of economic empowerment and indigenisation is understand by every right thinking Zimbabwean. The debate has long shifted from the rudimentary arguments to the more complex and nuanced aspects. What is creating discomfort is the failure by some top decision-makers in Government to realise that a Nigerian, a South African, a Ghanaian, a Congolese, a Kenyan cannot be classified as aliens in this age of economic integration.
African countries have small domestic markets which can never compete competitively with the likes of the European bloc, China, India, Russia and the US. Their markets, in terms of population size and per capita income, are too small to threaten the global economic status quo. This is where economic integration comes in. As individual nations, Africans will find the going very tough, but as a united bloc of countries Africa can achieve a whole lot more. Without economic integration, Africa will find it difficult, if not impossible, to build globally competitive economies.

So, before the Zimbabwean authorities start victimising Nigerians, Zambians and other Africans who are operating small businesses in this country, they have to be reminded that it is European colonialists who shaped Africa’s geo-political configuration. The so-called borders which confer nationality are an imperialist construct. When we sought help in toppling the colonial system, it is the Zambians, Mozambicans, Tanzanians, Batswana, South Africans who made huge sacrifices to expedite our attainment of freedom and democracy. If these nationalities were our brothers and sisters yesterday, how do they suddenly become greedy “foreigners” who want to gobble up our economic cake today? No, no, no. Nigerians are not our enemy. If there is a law which says my Nigerian brother is my foe, then that law is unjust and must never be obeyed.

Instead of promoting xenophobia on the continent, nations should be taking bold and decisive measures to scrap intra-Africa visas. Tourism and intra-Africa trade and investment are being hampered by restrictive visa regimes that are relics of the bygone era of colonialism.

While it is vital to remain alive to the threats of terrorism and organised crime when discussing the merits or demerits of visa regimes, the people of Africa cannot justify a situation where it is easier for an Englishman to travel from London to Harare than for a Nigerian to travel from Lagos to Cape Town.

As Zimbabwe grapples with the vagaries of economic decline and the headaches associated with the frantic search for funding for the 2014 National Budget, we need to convince the world that we are indeed a nation of celebrated thinkers and doers.

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