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Economic paradigm shift crucial

We should not allow hatred for individuals and personalities to cloud a shared national vision and defined strategies of how Zimbabwe can emerge from economic stagnation and place herself on the solid path of socio-economic growth. Besides addressing the usual governance challenges, we need to start reflecting on at least five critical areas or sectors which the government and the nation should focus on in order to catalyse economic growth and development. It may not be possible to revive many of Zimbabwe’s ailing industries and instead more effort should be made in facilitating the development of new, viable and competitive companies.

In building on Zimbabwe’s competitive strengths and advantages it would be essential to focus on  five primary pillars of growth namely rehabilitation of the transport sector, development of the energy sector, the extractive sector, water development and enhancement of the country’s fibre optic network.

It will be crucial to ask ourselves whether our industries are competitive enough for the global market and make tough decisions about which sectors we should focus on. Rapid global advancements in technology, policy inconsistency, lack of capital and high operating costs are making it increasingly difficult for industries in Zimbabwe to compete.

 

This is exacerbated by stiff competition from emerging economies such as China, Brazil and India which have affected industries even in countries such as the United States and Britain. In the US, for instance, computer giant Dell had to close one of their plants and relocate it to China  due to cheaper production costs in that country.

While Britain’s post-World War II economy was heavily dependent on manufacturing which accounted for over 40% of GDP, the current British economy is now heavily dependent on the service industry. Competition from China and other emerging economies has taken their toll on many economies, resulting in these countries having to readjust their competitive advantages to concentrate on their strengths instead of their weaknesses. De-industrialisation is a global phenomenon.

In Zimbabwe, the big question is can we reverse the tide of de-industrialisation? Or should the country focus on industries and sectors that are viable and competitive globally instead of reviving collapsed ones? 

 
The obsession to revive Bulawayo’s industries to what they were 30 years ago is actually misplaced because some of those industries cannot survive in the new global environment. We need to be thinking of what Bulawayo and indeed Zimbabwe would be like in 50 years’ time and which sectors of the economy will enable us to get there. We should not be merely occupied with reviving old industries but organising for new frontiers. Critical questions need to be asked about the competitiveness of industries which form pillars of our economy and how to take advantage of our strengths. Failure to appreciate this could lead us to invest in our weaknesses, not new opportunities and competitive advantages.

If we fail to do so we may try and inject  resources into industries that may only be able to survive at subsistence levels or on subsidies. Yet depending on the sector and type of company, revival of some old industries may help economic recovery.

Some of the industries that closed down may never be able to survive in this new global environment epitomised by phenomenal growth in technology and automation. Nationally, whilst the operating environment may be extremely harsh, the situation may even be more challenging globally. The introduction of tariffs to protect local industry while being a very noble initiative may, as Professor Tony Hawkins noted, be problematic because of trade agreements at regional and international level. It is for this reason that I would like to suggest that we expend our energies on what can give us the most mileage, benefit and advantage.

Broadly Zimbabwe needs to invest in infrastructure and frameworks that provide a solid foundation for the development. Investing in five key strategic engines of economic growth and these five primary pillars would then build a concrete base for the development of related and inter-dependent industries and sectors.

Some of the critical areas include overhauling the transport sector, exploring the potential of sustainable alternative energy sources and development of a sound fibre optic network to boost Information  Communication Technologies (ICTs).  Critically an enabling environment with incentives for value-addition and beneficiation for the extractive sector could unlock value in mining which can become the engine of economic growth.

 

Development of water sources for industrial, commercial and agricultural use is key. Priority should also be placed on the development of tourism. We can make it but not unless we think and do things differently.

 

Dumisani Nkomo is Habakkuk Trust  CEO and a political analyst. He writes in his personal capacity. Email: dumisani.nkomo@gmail.com; blog www.dumisanionkomo.blogspot.com.

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