The Zimbabwean government’s adoption of the Open For Business mantra in its approach towards unlocking investment is a good public relations act which must be accompanied by an enabling policy framework that not only attracts foreign investment but one which also respects local capital and thus stimulating local savings and investment.
Zimbabweans on their own can play a critical role in unlocking the country’s economic Rubik’s cube since IMF Loans and World Bank Grants or any such foreign lines of credit will achieve very little in the absence of local goodwill.
During these economic difficulties that the country is going through, it is important to consider that hardworking, focused and resilient Zimbabweans have the capacity to bring back their economy into full throttle and high productivity.
However, this can be possible when there is efficient allocation of local capital and when incentives for participation in building the economy are right since after all, capital goes where it thrives. .
Over the years, in my formal and informal interactions with people across the board, I have conversed with friends who have felt safer investing their money elsewhere than in their own homeland Zimbabwe.
As a result, many great local ideas have been exported to other more functional economies as enterprising Zimbabweans, despite their love for their country, they had to make the tough call of taking their intellectual capital where it can yield better returns.
On one occasion, I accompanied a colleague to pitch his business idea in a neighboring country where we were well received in the business sense and this alone made it more appealing for him to establish in that country.
The government must therefore understand that local capital is an essential economic building block and that the entrepreneur and local investor is an ally who must be recognized, accommodated, promoted, protected and be celebrated in order to spur economic development.
Zimbabweans as a collective citizenry, i.e. both those in the diaspora and those at home can make a significant contribution in reviving their economy as long as they understand and believe that their capital is safe and that they themselves are welcome, respected and protected.
Once local capital thrives, Zimbabwe will become a honeypot that attracts even the most skeptical of investors since capital as a resource, it goes where it gets the best incentive and reward since no investor can ignore a good return underpinned by a stable economy.
That having been said, the question that comes to mind is how then can we get local capital to work for us?
The answers to this question are listed below:
- We need to probe how many local investment deals have fell through and why and what we can do to get them on track.
- We need to help the informal sector, the small business owners to scale, give incentive to local lenders to shift to lending for productivity as opposed to consumption. Zimbabwe is bubbling with potential and so is the rest of Africa. The question we should always ask when crafting policy is, ‘why would private capital prefer us?’
- We need to articulate a different policy direction that is inclusively underpinned by broad consultations with Zimbabweans. Zimbabweans must invest locally and also be encouraged to invest long term first before international capital can find real comfort here.
- We need to harness the diaspora dividend.
Implementing the afore-mentioned can bring an end to speculative investing and rent seeking behavior which is destroying the economy.
Local capital understands its own local environment. The fact that over 60% of Zimbabwe’s economy is informal proves that Zimbabweans are prepared and willing to work for themselves and their country. Should these hardworking Zimbabweans be given the requisite support for them to continue being productive, then economic stability would be guaranteed.
Zimbabwe’s diaspora is another important constituency in country’s development matrix. For the last two decades, the diaspora community have proven their importance to Zimbabwe’s economy. If only we can get them to participate in broader economic activities through more pronounced savings and investment.
Locally based Zimbabweans including local institutional investors have often received the short end of the policy stick despite their resilience and willingness to continue building. For instance, how institutional investors like pension funds recovered from the 2003-2008 spell is a miracle. Similarly how they are surviving after February 2019 is also an interesting subject considering the limited investment instruments available on the market.
These institutions are a key cog in stimulating savings and investment for any economy globally.
To put this into perspective, NSSA alone was collecting an average of US$200 million during the multi-currency era, not mentioning other statutory as well as private pension funds.
The above illustrates the potential and capacity for the country to succeed using local capital.
In closing, I will reference my 12 May 2014 chat with my late mentor Joseph Sagwati in which he wrote.
“You dont fly out to woo capital, you sell yourself to investors through an accommodative framework of policies on ease of doing business in a conducive environment where the sanctity of private property and enforceability of rule of law are sacrosanct and indivisible. Once this happens, Zimbabwe will ignite the required glow that attracts investors without wasting taxpayers’ money on empty global junkets with a begging bowl.”
Zimbabweans can build Zimbabwe and once we start, the rest of the world will join us.
Prechard Mhako | Business Development Consultant & Economic Analyst | Email email@example.com
SMM’s Administrator, Afaras Gwaradzimba Struggles to Provide Answers on Mawere’s Mount Pleasant House after 17 Years of Being in Charge
Brian Kazungu, 28/03/2021
Afaras Gwaradzimba, the State appointed Administrator for Zimbabwe’s Shabani Mashava Mines (SMM) which was placed under Reconstruction in 2004 is struggling to provide answers on the status of a house in Mount Pleasant, Harare which belongs to Mutumwa Mawere.
When asked about an update, after 17 years of being in charge of the house which was earning rentals from tenants, Gwaradzimba expressed ignorance on how under his authority, SMM was collecting rentals on a private property belonging to someone else.
He confirmed that even though SMM did not have the house’s title deeds, the company was actually receiving rentals for the property and paying the related rates.
In an effort to treat this potentially criminal case with a civil approach and make good the anomaly, Gwaradzimba made instructions to the effect that a Trust Account be created so that money can be properly accounted for.
“I am advised by Mr. Mutumwa Mawere himself that he holds the title deeds for the Mt. Pleasant house, and the Deeds are in his name. I will ask him to send me a copy of the deeds.
I there kind (sic) ask that you create a Trust Account under SMM, transfer all the rentals that have been received from the lease of the house, into that Trust Account and then charge against the account, all expenses paid by SMM in respect of the house, including management fees payable in accordance with the Estate Agents Act.” Gwaradzimba instructed SMM Management
He could however not explain how the current arrangement came to be and referred further correspondence to the Dube, Manikai and Hwacha (DMH) law firm which is the company’s legal representative.
Mawere who bought the house when he was still in the United States of America said that he never made an arrangement with SMM to manage his personal property since there was a tenant paying rent subject to management by an estate agent.
He questioned how the property ended up being managed by SMM under Gwaradzimba’s authority and yet state power was only limited to the affairs of the company and not to the private property of the owner.
“SMM was my company. Mnangagwa/Chinamasa, using Gwaradzimba/Manikai used state power to introduce a decree that had the effect of divesting and depriving the shareholders and directors of the company of the right to control and direct the company.
The control and management was then vested with Gwaradzimba. Prior to this, I had a relationship with the company and after this, by law, I ceased to have any relationship with the company.” Mawere said
According to the law, as per the reconstruction of SMM, state power was limited to the affairs of the company and not to the private property of the owner.
The reconstruction of SMM came after Mawere was allegedly accused of foreign currency externalisation which was however proved to be lacking substance according to a report on the findings of the investigation.
In the report, it was stated that “Following extensive and exhaustive investigations, it was established that the allegations of externalisation against Mr. Mawere were unfounded and baseless. It was also established that Mr. Mawere was neither a director nor shareholder of SMM. There was no direct legal and factual nexus between him and the company.”
Mawere was then specified after a failed attempt by the government of Zimbabwe to extradite him from South Africa and his company was subsequently placed under reconstruction.
According to the same report, the purpose of the specification was to further investigations on the activities of Mawere’s business empire.
The report also reveals that Gwaradzimba and Manikai who is part of the law that has been tasked with the issue, both had a previous relationship with SMM before the specification and reconstruction of this entity that had asbestos mining interests in Zvishavane and Mashaba.
It states that “Mr. Gwaradzimba was the auditor of SMM during 1996 through 2001. Mr. Manikai was the legal advisor of SMM and ARL from 1996 through 2004. Notwithstanding, Mr. Gwaradzimba was appointed Administrator of a company that he once audited.
Mr. Manikai is now acting against his former client. This raises serious legal and ethical questions that need to be addressed at the appropriate time. However, it is the considered opinion of the Investigators that the appointment of Gwaradzimba and Manikai was ill considered and, therefore, inappropriate.”
Various political and economic experts have reiterated that the issue of the rule of law and property rights posed a serious challenge on the economy especially when it comes to attracting both local and international investors into the country’s ailing economy.
Zimbabwe’s economy is currently mired in serious challenges characterised by lack of employment, poor infrastructure, industrial closures and rampant corruption across the sectors.
In separate investigations and findings, while still being the Governor of Zimbabwe’s Central Bank, Dr Gideon Gono castigated the procedural anomalies adopted in handling the SMM matter and cautioned of Gwaradzimba’s probable selfish personal interests in the whole saga.
Gono pleaded with President Mugabe to respect the rule of law for the economy’ sake and for the good image of the country by recommending the de-specification of Mawere and for the return of his companies and assets back to him.
“Though there is reference to the Fifth Table of the Seventh Schedule of the Companies Act, which sets the payment levels for liquidators and administrators, the fact still remains that Mr
Gwaradzimba, the Administrator is getting payments set at 6% of gross proceeds, of all
SMM companies which is even more lucrative than shareholders themselves, let alone revenues to Government.
Your Excellency, there is genuine need for the relevant sections of the
Companies Act to be modified. The Administrator’s activities also seem to have entrenched interests of needlessly permanently dispossessing all Mr Mawere of his assets.
…….It is also recommended that Your Excellency approve the de-specification of Mr Mawere and his companies so as to pave way for a new beginning, particularly in the context of investment promotion and empowerment in Zimbabwe.” Wrote Dr Gono.
Five (5) Important Types of Capital That You Must Have As an Entrepreneur
Munyaradzi Chikomba, 27/03/2021
Many people across the world definitely want to venture into business but the biggest challenge which is stopping them from starting their own enterprises is lack of capital.
It is because that reason that I want to highlight that Start-up Capital does not only mean liquid capital or money.
Yes indeed, you may not possess cash at the moment and yet you may have the following forms of capital which you can actually use to advance your entrepreneurial ambitions.
Relational/Social capital – A relation is defined as the way in which two or more people, groups, and countries, talk to, behave toward, and deal with each other.
In life, you talk to many people and as a business person, you should learn to establish strategic business relationships which will eventually help you in the near future. You should strive to establish, nature and cultivate good relations so that you can in turn also benefit from them.
Good business relations have the capacity to advance your life for the better.
If you borrow money for no interest or ask for a favor from a colleague without paying for it, you would have actually used what is called social capital.
Social capital can also link you to new customers and give you more visibility without incurring serious advertising costs. In business, good relationships are very important, because without them, you will quickly go out of business.
Intellectual capital – Intellect is defined as the capacity for rational or intelligent thought especially when highly developed.
You must always understand that information or knowledge is power and as such, if you can use information to advance your ventures, it will bring you a great return on investment. You actually trade in the knowledge that you have in exchange for liquid capital.
For example, if you are very knowledgeable in a certain field, you can decide to offer tutorials or consultancy in that regard and people will give you money (liquid capital).
Intellectual capital can also save you money especially when it comes to doing some things on your own instead of paying someone to do it on your behalf.
When you lack information, you may end up paying for things that can be possibly be done for free like online applications or submissions for certain documents which other peopl can charge you if you ask them to do it for you.
Skills capital – A skill is a learned power or dexterity of doing something competently: a developed aptitude or ability.
There are those things which you are able to do with utmost easy and yet they have a monetary value.
You may be so good at doing these things to such an extent that it is almost impossible for people to forget you. Such an ability on its own is a form of capital which you exchange for money. It is therefore very important for you to develop your skills.
If you can design fliers on your own, you will not pay for that service and hence you would have saved a few dollars. Your skills capital can save you some money which you can then use for other more important things in your business.
Emotional capital – An emotion is a conscious mental reaction (such as anger or fear) subjectively experienced as strong feeling usually directed toward a specific object and typically accompanied by physiological and behavioral changes in the body.
Your ability to face what life throws at you is part of your capital because remember an emotionally unstable individual can’t make sound decisions and yet business is all about making sound and profitable decisions daily.
Emotional capital is very important because it defines and determines the effectiveness of every other type of capital mentioned above.
Management of emotions is a fundamental aspect in business because if you can’t manage your emotions, you will make irrational decisions which are detrimental to your company and thus negatively affecting all the other forms of capital.
People who are familiar with stocks (shares) and investments will tell you that good management of your emotions is very important since it enables you to make sound decisions.
Spiritual capital– The word spirit is defined as a force within a person that is believed to give the body life, energy, and power.
Spirituality in simple terms is knowing oneself deeply and relating it to your daily routine and calls.
This type of capital calls for you to invest in your inner being so that you can be in sync with your creator or beliefs despite your faith.
Spiritual capital is beyond religion because you can be very spiritual but not inclined to any religion. Spiritual capital is very important because it makes you to believe even when there is no or little hope and it keeps you going even in dire situations.
Yes, business may not be anchored on spiritual beliefs since its runs on the laws of commerce but you must understand that businesses are run by people who are subject to spiritual realities.
If you take some time to study the lives of some leading business people around the world, you discover that they have a certain level of spirituality which influences their decisions.
Definitions in this article are taken from the Merriam-Webster Dictionary.
Munyaradzi Zindi Chikomba (The Social Architect) is a Co-founder & Executive Chairperson of Shanduko Foundation. He is a content creator and serial columnist who writes articles on social commentary and social affairs. He is passionate about building and shaping society through digital advocacy and media. He is an Editor In Chief at Peach Media Trust.
Identifying and Satisfying a Paying Customer, Understanding The Art of Collaboration, As Well As, Mastering The Concept of Effective Sales and Marketing – Chad Mhako
Brian Kazungu, 24/02/2021
Entrepreneurship is being globally accepted and embraced as an effective solution to solving many societal problems including unemployment and poverty but unfortunately, without proper knowledge, most businesses especially SMEs fail even in their first years after inception.
In a book titled The SME Handbook, according to Nico Jacobs, head of Absa Small Business, Small business failure rates are as high as 63% in the first two years of trading, of which some of the reasons for such a failure rate includes lack of skills, lack of funds and poor management.
As such, in its effort to promote entrepreneurship, EAI Virtual Hub (Entrepreneurship, Arts, Innovation), organises virtual meetings with experts from different economic sectors in order to address various challenges faced by entrepreneurs on a daily basis.
EAI Virtual Hub is a platform that seeks to empower young people in Zimbabwe to become financially independent.
Recently, it organised a virtual presentation under the theme Youth In Entrepreneurship, where business consultant, Chad Mhako, shared valuable business tips in response to questions by various entrepreneurs.
Chad is a seasoned consultant who works with startups and established businesses in helping them to develop concrete, actionable strategies which gives them better access to markets and finance through customer driven entrepreneurship approaches.
Below is a question and answer presentation adapted from Chad’s presentation on the EAI Virtual Hub.
Question: Quite often, there are many concerns on a wide range of issues around entrepreneurship, with some people professing their confusion on what business they should engage in. As such, what is your advice to such people who really believe that entrepreneurship is the way to go and yet they are not sure of the exact kind of business they must pursue?
Chad Mhako: In my experience as an entrepreneur and consultant. My response is always the same. Any business where you can secure a paying customer.
My philosophy is that your business starts the day someone is willing to pay you for what you have to offer.
Now, if you can repeat this profitably to scale, then you have a business. Once your business model is profitable, repeatable and scalable, then you are in business.
This is because paying customers are quite often the difference between a successful entrepreneur and the not so successful entrepreneur. When we start our businesses, we are usually trying to answer basic questions, no matter the jargon you choose to use.
Every business tries to answer the following questions: Who are my customers? Where are they? How do I get to them? Why should they buy from me?
I like to start with the customer in mind. Like I said, you don’t have a business if you don’t have paying customer. So whether you are farming potatoes from a sack, rearing chickens or doing the freshest deal in town. Everything boils down to the customer who pays.
This is why some people make mediocre products that still sell. The reason is that they know their customer, who they are, where they are. Basically, everything there is to know about the customer. They know their customer archetype.
People will ask, what’s selling these days or what’s fresh? These are me too kind of businesses. You can also do a-me-too business as long as you have a customer who will buy.
So, what does it take to know who will buy? The answer is – Customer Discovery!!
The basic building blocks to building a business are: 1) Discovering who your customers will be 2) Validating the existence of those customers 3) Then making sure your value proposition speaks to their needs 4) Then you build your enterprise.
Some people say that we will build it then customers will come. Others say, we will farm and then they will buy. We will manufacture first then customers will buy. Sometimes it works, but most of the times, it doesn’t. Don’t let the clichés fool you.
Question – What is your advice to aspiring entrepreneurs who have the passion for business and yet they do not know where to start?
Chad Mhako: I say start with a familiar problem, but make sure there is a large enough demand for the solution to that problem. Some problems are not worth fixing in terms of viability and profitability.
Question: From your experience, what have you identified as an effective approach of attracting paying customers or converting people in any community into customers who pay for what you have? Is it always about good marketing or it’s about your circle of interaction?
Chad Mhako: Knowing who you are your customers and where they are is a great starting point. My customers may be active on Facebook whilst yours are active in a market with little or no interest in social media. As such, if I recommend you to do a social media campaign which works for me, what you will get are vanity metrics, mere numbers which look wonderful on paper but mean zero to your bottom line,. So customer discovery is key
Question – From your experience in consulting for startups, which mistakes do you think we tend to do as young entrepreneurs and how can we avoid them?
Chad Mhako: The following are some of the mistakes that entrepreneurs make: 1) Hype over substance 2) Copying and pasting without context 3) Listening to clichés 4) Putting the cart before the horse, that is, wanting a quick buck and not being willing to build.
Question – How can one grow their startup with a minimum viable product, how can they attract more funding for growth?
Chad Mhako: Your Maximum Viable Product (MVP) allows you to harness market feedback. It’s not the end product, it’s part of the building process. Businesses are undervalued at inception and the further you are from ideation, the higher the valuation
Question: What’s the role and advantage of collaboration in business?
Chad Mhako: Collaboration is the new competition. However, it must never be collaboration just for the sake of it. If not well thought through, collaboration can lead to business collapse.
As such, all parties must know what are their rights and obligations under the arrangement.
You should never leave anything to interpretation. Collaboration can take many forms and one must know what works for them.
Chad Mhako is an Entrepreneur and Business Development Consultant who helps startups and established business develop concrete actionable strategies that improve their bottom lines. He is a Managing Consultant at Abiyedu Kin and a Country Manager at Energyneering EPCM.
firstname.lastname@example.org / email@example.com / @ChadMhako on twitter
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