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Sunday, 22 September 2019

Zimbabwe’s Economic Crisis A Concealed Opportunity!

After some time, every business is vulnerable to a crisis, but an organisation that weathers a crisis well appreciates that harsh conditions are a concealed opportunity for growth and change. 

To look at the definition of crisis, Collins English Dictionary describes it as a time of great danger or trouble, often one which threatens to result in unpleasant consequences. In business, the danger or trouble threatens to seriously interrupt processes and negatively affect the bottom line, even resulting in company closure.

Since a crisis results in some form of loss or change and its nature is antithetical to core values of predictability and certainty, people and businesses will be so desperate to get back to the comfort zone of the known, but crisis prohibits such an option. The VUCA world is here – over the past couple of years, the world has changed but expectations are lagging! Fortunately, when there is no going back, there lies the opportunity for growth and change. 

Zimbabwe’s Economic Crisis A Concealed Opportunity!
According to Les Brown, “If you put yourself in a position where you have to stretch outside your comfort zone, then you are forced to expand your consciousness and to strive and achieve.” As a business, if you are struggling and you are still holding on to the old, it is time to change your processes and the approach, for the old might not be coming back – the new is reality!

Economically, experts are viewing the Zimbabwean situation as deteriorating, where prices are spiking, the business executives are concerned about the foreign currency shortages which are resulting in delayed payments for raw material imports, the tax regime is not as favorable and several other challenges. To the eye that seeks the comfort zone, it’s all gloomy and dark, but to the other – what a moment of endless opportunities. Several successful nations in the world have gone through the crisis that Zimbabwe is facing, and there is a lot to learn from them.

Previously, Zimbabwe was well ranked economically, but the real benefit of such development was marginalized. Wealth was in the hands of a few, and the majority knew nothing about business and how to make money, rather than being employed. The issues of economics were understood by a few. Not to justify the current economic crisis, but it has given Zimbabweans a new look to business and economics – they now have a better understanding of how things should be run – an asset that will propel them soon. Currently, it is ‘survival’ business, but soon it will emerge into real business, were people respect laws and bribes will be a thing of the past.

So, where are the opportunities for growth and change in this crisis? Diversification is one opportunity that businesses can pursue. Some scholars have criticized diversification, but its benefits cannot be ignored. With the way things have changed, it might no longer be sustainable for a business to have one stream of revenue or income. Diversification into other fields to generate extra revenue is no longer an option, but a necessity. Almost 90% of surviving businesses in Zimbabwe wants to import raw materials and are failing due to shortages of foreign currency. What would it take to diversify into that field of producing the raw materials? The money spent on importing the raw materials will be ‘enough’ for the equipment to produce.

Mergers and acquisitions are also an area of opportunity currently for business. There are so many small businesses that are producing the same products and services, but at a higher cost, making their products more expensive than the imports. It would be noble for some of these businesses to merge and take advantage of the economies of scale and produce competitively against imports – thereby creating a market. Though it is encouraged to have many players, sometimes too many players cause ‘noise’ (including bribes to get customers – fueling the corruption cycles in companies where one must bribe the buyer to push even substandard products into the organisation – pushing up the price of raw materials to incorporate the buyer’s bribe – eventually making the final product uncompetitive against imports).

When small businesses merge, it is an opportunity to tap into territories that one small business would not have tapped into, creating even excess products and services for the export market. A small business has no voice and muscle, but in the case of a merger, a bigger business will emerge with a strengthened muscle and can voice!

Crisis calls for the most efficient way of producing to remain in the game. This therefore forces the business executives to revisit their processes and make them lean but producing the same products even faster and at a lower cost. With the current shortages of foreign currency to import products or services or raw materials, it is an opportunity for the real entrepreneur to find ways of making the products locally. Complaining and wining about the crisis is not the answer! Everywhere you turn your head in this beautiful country, you see a problem – which is an opportunity to provide the solution and launch a great business. There are so many little things that can be done to create opportunities and take advantage of them.

A story is told, “Lyft is an on-demand transportation company primarily providing ride-hailing services and based in San Francisco, California. It develops, markets, and operates the Lyft car transportation mobile app. Launched in June 2012, Lyft operates in approximately 300 U.S. cities, including New York, San Francisco, and Los Angeles and provides over 1 million rides per day. The company was valued at US$15.1 billion as of June 2018 and has raised a total of US$5.1 billion in funding. Lyft expanded into Canada (specifically serving Greater Toronto, Hamilton and Ottawa) in December 2017 as a competitor to the already established Uber. As of late 2018, Lyft was the number two ride-hailing company with a 28 percent market share in the United States, according to the Second Measure research company.”

“Lyft was launched in the summer of 2012 by Logan Green and John Zimmer as a service of Zimride, a long-distance ridesharing company the two founded in 2007…The company name comes from the country Zimbabwe, where, during a trip in 2005, Green observed locals sharing minivan taxis (mushika-shika). He said, “I came back to the US-inspired to create that same form of transportation here.”” What one eye saw as a crisis of not having a functioning transport system, another eye saw as an opportunity for a billion-dollar business! Countless ideas originated from Zimbabwe, and multi-million-dollar companies are created, whilst its citizens are debating silly issues.

Now, what do you see in Zimbabwe? Do you see crisis, or you see opportunities? It will be so sad for someone to come from another country and setup a business in Zimbabwe, solve the current problems and give you a job. Why can’t we make our own jobs? Let us personalize our own problems and find our own solutions that have no conditions attached to them! Then and only then will Zimbabwe boast of true economic development. It will be a shame for the nation to be developed and Zimbabweans remain poor! Why can’t it be a nation’s agenda to make many real millionaires in the next 10 years? Without the right purpose and vision, the nation will remain in crisis.

Nevertheless, for better economic development, good policies are needed as a matter of urgency to support the knowledge and understanding that Zimbabweans have acquired in the past 20+ years of hardships, to enable them to develop their own economy. Without good policies, all other efforts will be in vain. True economic development starts with good policies, both economically and politically. All other issues that are debated are simply symptoms of poor policies. When you want to fix a problem once and for all, ignore the symptoms and go to the root cause – which is policy, everything else will follow suit.

Contrary to many beliefs, Zimbabwe’s biggest problem is policies and laws rather than ‘politics’! Greatly, there is nothing new under the sun, some of the good policies and decisions can be copied from developed nations and implemented in Zimbabwe. With the right consistent policies, the ship ‘Zimbabwe’ will be stirred in the right direction. Most importantly, the job of economic development is never a one man’s job, but every citizen must play a part!

Antanio Gramsci once said, “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum, a great variety of morbid symptoms appear.” Therefore, Zimbabwe’s crisis is a concealed opportunity for a real business, as the old systems and processes of doing business are dying – and a way is being paved for the new systems and processes that drive the business forward!

Batanai Kamunyaru is a business writer, speaker and coach. He can be contacted on bat.kamunyaru@gmail.com or +263 718 852 489.

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