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Industrialisation in reverse

INDUSTRIALISATION is a central topic at this week’s Sadc meetings. Why such a subject should be on the agenda for a meeting in Zimbabwe is a mystery as the country has been vigorously engaged in de-industrialisation for years.

As a result, we have to import most of the goods found in the shops and we even have to import most of our food.

Not so many years ago, the lists of the consumer goods we made in Zimbabwe was one of the longest for any developing country and we exported an impressive range of foods in all their forms. Whether they were fresh, canned, milled, frozen or packaged in many different ways, our products from biscuits to dairy products, confectionary to stock-feeds were eagerly bought on many foreign markets.

One of the reasons for the crash that has almost obliterated Zimbabwe’s industries is government’s failure to recognise that commercial farming is an industry. Its main characteristic was the use of industrialised methods to ensure good prospects for good quality crops. These were achieved by increasing the use of machines and by investing in capital assets, such as dams and irrigation equipment.

Perhaps the biggest investment was in skills. At every level, the farmers passed on the knowledge that was needed to carry out each essential farming function in ways that placed excellent results within reach of managers, supervisors and farm-workers.

It could be argued that Zimbabwe’s de-industrialisation effectively started with the chaotic land reform in 2000 which decimated agriculture, the economy’s foundation, and downstream industries even though there were problems before that.

Actually, problems were put in the way of industrialists a lot earlier than that, but a look at what land reform has accomplished for the country brings many important issues into focus.

One of the most vital of these is that the land itself, held as it was as freehold property, had collateral value that permitted the farmers to have access to as much money as they needed to prepare and carry out cropping programmes.

They could also make longer-term plans that would increase yields and sustain the fertility of their soils. That major advantage was totally destroyed by government’s decision to declare all farmland unmarketable government property.

By itself, that would have been enough to cripple the farmers and to cut their ability to supply inputs to the manufacturers, but government chose to go much further. It demanded that all the experienced farmers, complete with their vast wealth of knowledge and experience, should be stood down.

The effects of their expulsion from this industrial sector had direct impacts on every other industrial sector. The resulting de-industrialisation process became more obviously deliberate every time authorities claimed that government would never ever go back on these policy decisions.

Even though government refused to recognise them, industry’s links to agriculture became obvious to everyone else when they realised that the textile industry, the timber industry, the paper industry, the flower exporters and the tobacco industry joined, as casualties, the producers of foods.

What made these collapses so obvious to all except government was the loss of jobs. Government jobs are protected, so the jobs lost by several hundred thousand others were apparently of no special concern.

If we go back to when this country was successfully industrialising, it did better than every African country to the north of us by offering an investment sanctuary to the bright and eager people who created the businesses, local and foreign. That fact invites special attention to the need for any country wanting to progress to appear attractive to exceptional people.

The simple and very basic fact is that it takes an exceptional person to start and successfully run a factory. In Zimbabwe, we appear to have a strong inclination to dis-empower anyone who displays ability and ambition under the illusion that anyone can run a business. From being a country that used to export hundreds of millions of dollars-worth of goods, we have become importers of the same goods. Our main exports now are the bright and eager people who should be running our factories.

While these unpleasant consequences were unfolding, many other casualties lined up behind them. To mention just a few, National Railways of Zimbabwe was brought to its knees, Air Zimbabwe became an embarrassment, the number of bank failures might have set a record, our schools, hospitals and social services have struggled, our electricity and water supplies became at best intermittent and we completely destroyed our own currency.

These made Zimbabwe’s economy look as if a powerful enemy had devastated it in an all-out war. About four million economic refugees now scattered all over the world could testify to that. But government is now beginning to admit a few failures because its tax revenues now head the list of the casualties it considers important.

Re-industrialising Zimbabwe is going to be very difficult job until government accepts that policies that did the damage must be removed. It should start with the most recent attack on the business sector, which is the indigenisation policy.

Its declared intention to capture 51% of the equity of every company started by every foreign investor has very efficiently sealed the country off from the kind of foreign investment that we need, the kind that involves a long-term commitment to produce world-class products.

On top of this severe discouragement, the current licensing requirements, tariffs, fees, controls, limitations, regulations and demands that long strings of permits be applied for all remain in place.

This is despite promises that they will be removed.

All of these are vitally important as the modern world is a difficult place to start a business even for experts in developed countries. We in Zimbabwe should work at making our offers of hospitality to investors the most attractive in the world and we should be happy to see them become successful and profitable. Their profits are of no importance to us, and neither are their export consignments of platinum, shoes, tea, furniture or shirts.

What we need most in Zimbabwe, and in all of Sadc, include good business climate, investment and jobs. Everything else we need flows from that.

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