AS much as we might hear that Zimbabwe is open for business, the phrase is not unique to Zimbabwe now.
South Africa has been running adverts on international news platforms proclaiming that South Africa is also open for business. I saw an advert the other day pitching South Africa as a filmmaking destination. Their government takes the film industry seriously and offers tax rebates in order to attract international filmmakers to make their movies in South Africa.
Cape Town has world-class studios and the country has the technical skills that will attract even Hollywood studios to come to their shores to make their movies. South Africa understands that they are competing with affordable film locations such as Canada and the Czech Republic in filmmaking.
Recently, I went to the premiere of Hopewell Chin’ono’s documentary A State of Mind where he talked about the challenges of getting distribution for local films. There was a time when Zimbabwe had a thriving film industry with films such as Neria, Jit and Yellow Card, but now it is no longer prioritised. When Nigeria decided to include their Nollywood films into their gross domestic product when they rebased their economy, the West African country overtook South Africa to become the biggest economy on the continent. In Nigeria the film industry grew organically and was self-financing.
Filmmaking is big business and has made the state of California the biggest economy in the United States. South Africa is taking its filmmaking challenge seriously and it is unparalleled in the amount of support that its government gives to that business sector, compared to the rest of Africa. There is deliberate, central planning in the way the government helps South African businesses to dominate in any sector in Africa.
South Africa’s Department of Trade and Industry as well as the Industrial Development Corporation are geared towards helping South African businesses access new markets and grow. The Export Credit Insurance Company provides export credit insurance for projects which have at least 25% South Africa content which has allowed South African firms to expand all over Africa.
South African corporations have expanded into the rest of Africa so much that they are known as the new colonialists and every major South African business has a pan-African strategy. So for Zimbabwe to say that it is open for business when we are competing with the South African juggernaut next door, the only way we can have an advantage is if we have certain unique mineral deposits.
When it comes to the manufacturing and retail industries, South Africa leaves Zimbabwe in the dust. For an investor to come to Zimbabwe, they have to pass up other more attractive investment destinations in Africa, including Nigeria which has a bigger market, Mauritius which is in the top 20 in the 2018 Ease of Doing Business rankings and Rwanda which is much more business friendly.
Just because we declare “Zimbabwe is open for business” does not mean that investment will automatically come in. Besides the flowery mantra, we have to take strategic steps to attract investors. Zimbabwe has been closed off for so long we are not even in sync with the rest of international trends.
South Africa is now benchmarking itself on Silicon Valley in innovation and ideas. As a fund manager, every time I go to Johannesburg now, I get invited to pitching events for start-ups or to judge entrepreneurship contests. There are now tech hubs and incubators nurturing start-ups as well as offering seed capital to entrepreneurs. Then I come back to Zimbabwe to be faced with old-school manufacturers who are struggling to survive in a bad economy. There is a culture of resisting new ideas in Zimbabwe and many people running business have risen up the ranks in organisations simply by staying in their jobs for a long time.
I once tried to pitch the idea of a point-of-sale (POS) mobile app to banks in Zimbabwe and, while they understood what it does, they refused to try anything new. To them, a POS machine has to a separate device not something that connects to your mobile device.
While Zimbabwe is also a small market, it is not just the size of the market that is the challenge, because Rwanda and Mauritius are smaller; it is the mindset that is the problem. In Mauritius and Rwanda, the governments have dictated that they want citizens to effect change and each person has it in their minds that they must contribute. The governments have carefully studied the metrics needed to improve their ease of doing business and Global Competitiveness rankings then they have passed the requirements onto all their citizens so everyone understand the big picture. Every year they work with the World Bank and World Economic Forum on improving those rankings, leading to steady improvement.
This year, Zimbabwe has gone from 159 to 155 on the ease of doing business rankings mainly by reducing the time it takes to register a business. Government is heeding President Emmerson Mnangagwa’s call to improve the investment competitiveness and, hopefully, they can keep up the momentum.
Foreign investors require consistent policies and a clear exit for their money which Zimbabwe currently does not have. A clear example is the recent introduction of the 2% tax which the state media last week said is now under review after it had also had been capped. The recent monetary policy statement had also rattled the markets after a record October where the Zimbabwe Stock Exchange had reached a market capitalisation of US$23 billion.
With no clarity on the currency situation, a fuel crisis and an overall confidence crisis, the country has been through an economic shock. There is a major crisis of confidence in Zimbabwe with rumours swirling but no clear direction. It does not have to be this way.
Zimbabwe needs branding and image consultants. The country is full of talented media and branding experts who can skillfully manage the optics and international image.
If I had to assemble a dream team to rebrand Zimbabwe, it would include Gilbert Eugene Peters from Spidex Media, one of Forbes Africa’s 2018 “Top 30 Under 30”; Nigel “SirNige” Mugamu from 263Chat; Tirivashe “TC” Mundondo, The Brand Guy; the guys from TechZim and other serious social media influencers to sell our story.
Our media image is old-fashioned and unimaginative. If you compare Zimbabwe and Dubai’s tourism social media strategy, it is like day and night. Dubai has enticing Instagram strategies that make you want to get onto the next Emirates flight and head over there.
Zimbabwe has some great destinations too, but they are not being marketed for the 21st Century. While Victoria Falls is popular, there is no clear social media campaign to market it internationally. Last year, I pitched a social media strategy to the Ministry of Tourism which fell on deaf ears. Zimbabwe’s tourism industry also needs to look at its pricing because there are few affordable options for tourists in Zimbabwe.
Zimbabweans often find it cheaper to take their families outside Zimbabwe for holidays than to go to local holiday resorts. Since the monetary policy tsunami recently, the situation is even worse with ordinary restaurants everywhere pricing their menus in US dollars.
The best tourists are local tourists who can support the industry in large numbers, so our resorts are shooting themselves in the foot by overcharging. Right now, though, everyone in Zimbabwe just wants some stability in prices and business.
The current crisis demonstrates who is in business for the long haul and who is looking for a quick buck at our expense. We are all taking note of who is profiteering so we can avoid them in the future. People will remember who kept their families fed during this crisis and the dust has already settled.
Deborah Peters is a business and investment consultant. — Twitter handle: @debbienpeters and e-mail: email@example.com.