Thinking Like An African And The New Economy

Thinking Like An African And The New Economy
Zimbabwe is estimated to have more diamonds than South Africa

AFRICANGLOBE – Much has been said about the growth of Zimbabwe’s economy under Zim-Asset. Everywhere and in whatever publication or speech, Zim-Asset is at the forefront. What is the politics involved? It is the ownership of resources but not the ideas and the technology. What is required now are the ideas and technology for implementation.

History has taught us how other countries harnessed their meagre resources to develop their economies. Countries that come to mind are Japan, South Korea and Malaysia.

The countries of the West plundered not only resources from colonial occupation of other countries but also uprooted generations of mainly Africans and Indians to develop their economies. In today’s world, any country that wants to be economically developed has no option but to rely on the resources available in their own countries. In short, it is called domestic investment. The idea is to select top companies to play a leading role in implementing the Zim-Asset economic blue print. Which top companies, one may ask? I will mention only a few.

Zimbabwe has what are called blue chip companies, such as Econet Wireless, Mahomed Mussa Wholesalers, Zimplats and Old Mutual, to mention just a few, whose total annual turnover could surpass the country’s budget. They are highly capitalised and can attract investors from the domestic and foreign markets.

What is required in our economic thrust is investor confidence which can be guaranteed by highly capitalised companies. It is through these companies that money should flow and can be controlled. A statement by the president of the Zimbabwe Bankers’ Association to the effect that banks do not themselves have money but that the money belongs to the depositors was straight to the point.

As a depositor, I want the bank to safeguard my hard-earned money and withdraw it at any time. The borrower of my money, as a depositor, must make sure that the money is used to earn more money to be able to pay back the loan with interest. That is simple economics. That is the politics of money.

The Chinese have their culture, whether one is communist or capitalist, that any investment must generate a profit. That is why the politics of their economy is straightforward.

One of their leaders is reported to have said that it does not matter whether the cat is black or white as long as it catches mice. Whether the politics is communism or capitalism, at the end of the day, it must produce a profit.

Japan found itself in ruins after the Second World War. But it chose to support a few companies to drive the national economy. Money was poured into these companies from the government and individuals.

The main thrust was to export products to the rest of the world using advanced technology copied and developed from other countries like the USA.

The same happened to South Korea and Malaysia. The Chinese had a different approach. It was to open their economy to investors to set up companies in their country, copy the technology and start using cheap labour to flood the markets of the world with their products.

Zim-Asset has to rely on the domestic mobilisation of resources by a few companies that can attract investors with better technology to set up subsidiary companies using the most abundant educated workforce in the country.

Government could play a major en- abling role to facilitate these top companies to get on with the job of running the economy. Most people in the country are spending their money on houses and cars among other luxury assets as though there is no tomorrow. When asked about such types of investment, some claim that their money will be safe with assets they can see, unlike money invested in companies that may collapse the next morning. People will part with their money reluctantly, as with taxes, but not in the form of current investment climate where Government is taking over loans not honoured by various government entities including the Reserve Bank.

Government, through the Ministry of Finance, must seriously approach top companies and give them the mandate to harness financial resources to resuscitate the economy without interference.