Business landscape dynamics in Zimbabwe: Observations from an enterprise development activist.

Between 2006 to the beginning of 2008, I was seconded to Maputo on a UNDP/IFC/World Bank project. Besides the challenging and path-finding work I was executing, trying to institutionalize an existing business association, in a predominantly Portuguese speaking country, which had recently become a member of the Commonwealth, there were several business landscape issues I observed, as an outsider looking in, which issues where enablers or disablers for the business association I was assisting. There were subtle but important distinctions on how society was organized in Maputo. This organization had implications on business outcomes. The first grouping was of Mozambicans who never left the country to chart new paths elsewhere. Many Mozambicans left Mozambique during the reign of Samora Machel, due to predominantly economic and security reasons. Rhodesian and South African sponsored Afonso Dhlakama a Mozambican politician and the leader of RENAMO, an anti-communist guerrilla movement, wreaked havoc, fighting the FRELIMO government in the Mozambican Civil War during the period 1977 to 1992. Although the war was concentrated in the centre and north of Mozambique, those in the south, whilst relatively safe, felt insecure and hence the exit of sorts, to neighbouring countries and Portugal. Then there were the Mozambican returnees – these are the ones who had left the country, on self imposed exile and chose to come back, after Samora died and Joaquim Chissano, a FRELIMO politician, took over as the second President of Mozambique, from 1986 to 2005. Chissano’s reign was credited with transforming the war-torn country, into one of the most successful African democracies. The third grouping were the expatriates. These were predominantly expatriates who came to work in Mozambique and never left, settling in Mozambique, with many of them investing in business. This grouping included, the Lebanese, who had settled into the country as investors into the private sector. The fourth category, were the Portuguese from Portugal. This grouping, together with their Lebanese counterparts were allegedly the prime controllers of the economy. There were widespread allegations, that the government literally resided in their back pockets. The fifth cluster, the dealmakers, was the local political establishment, comprising the FRELIMO who is who. FRELIMO is the dominant party in Mozambique and has won a majority of the seats in the Assembly of the Republic since June 25, 1975, when Mozambique became an independent, single-party state led by Frelimo, with Machel serving as the first President and thereafter, in every election since the country's first multi-party election in 1994. In a nutshell, FRELIMO has ruled Mozambique since 1975, initially as the sole legal party in a one-party system and later from 1994, as the democratically elected government in a multi-party system. FRELIMO has been in power for 47 years. It was my observation that each grouping, was very distinct and from a business point of view, preferred to do business with members of that grouping, with the exception of course, of the fifth grouping, the government officials, who interacted with the rest of the groupings and also within other government departments. This meant that there were parallel micro-economies within the overall Mozambican macro-economy. The micro-economies were made up of the every other cluster, excluding the political dealmakers, were forever jockeying for power, to influence business outcomes, with the endorsement of the political establishment. The simplistic scenario described above is more or less true for Zimbabwe. For starters,’ ZANU-PF has been in power for 42 years, since independence in 1980, a mere 5 years short of Mozambique. The scenario for 2022-Zimbabwe, just like 2006-Mozambique, the business groupings, also appear subtle . But if you are keen-eyed and on the qui vive, the distinctions are hidden in plain sight, as follows: The first grouping are Zimbabweans who have never left the country for the so-called greener pastures in the diaspora. This is a group of people who have always understood that the grass is greener where you water it, not on the other side, as previously thought. They possess an, adapt or die attitude and a transformative mindset. So every day, they keep their ears to the ground, scanning for new opportunities and a change of financial and business regulations by the authorities. Because of the informalization of the economy by enacting disabling business policies by government, many operate in the informal sector, scheming, plotting and making risky but calculated moves. Its predominantly a cash market that is not necessarily visible because the USD cash is not banked. Because of the cash nature of the transactions, the black market thrives. This is a market that determines rates. On occasion, the Central Bank and business bigwigs participate in this market, to mop up the cash exchanging hands. When they do, rates move up north and a cash crunch ensues. The second grouping are white Zimbabweans, a large number who lost farms, but find it more lucrative to stay in Zimbabwe because, firstly, it is home and secondly, because they no longer have cropping nor livestock management risk, but through previous international lobbying by the Commercial Farmers Union, control foreign markets for agricultural produce in Zimbabwe and as a result have become middle-men, racking in profits and exploiting the new black landowners who benefitted from the fast track land reform programme. Many of these new farmers, whilst book smart and educated, are weak on farm costing, general record-keeping, smart procurement, management and cost containment on the farm. This second grouping of white Zimbabweans, possess minorities-in-majority-settings like and Rhodesian values, where solidarity is their unifying doctrine as they consciously choose to transact amongst their own white people, at the deliberate exclusion of black people, essentially keeping money within their white community. They control most value chains in industry, commerce and mining, all the way to retail operations. That is why most big retail outfits of a conglomerate nature, are owned by white establishments. The third grouping are the Chinese, who apparently and allegedly masquerade as investors, whilst extracting as much as they can within short periods of time and preferring to operate, particularly in mining, whilst displacing locals, from their ancestral land where they reside and where their fore-parents are buried. They privately extract and export far much more than they openly give and then the powers that be hold celebratory ceremonies, being thankful to them, for what Zimbabwean resources would have essentially funded. The recently completed Zimbabwe Parliament in Mt Hampden, is a case in point. There are widespread allegations that wherever they go to plunder in mining, they first name drop, the highest office in the land, and then proceed to extract unabated. Apparently they are highly networked within the political establishment. The fourth grouping are the Indians, mainly from Pakistan. Many are born and bred in Zimbabwe, but they go and marry in Pakistan and bring their spouses back home to Zimbabwe. They tend to keep a low profile, are highly networked in government circles and like the whites, see the majority of the black community as consumers only and not people worthy to do business with. The fifth block are diaspora groupings, predominantly black, living mainly in South Africa, the United Kingdom, United States of America and Australia. According to apanews.net, “In a Mid-Term Monetary Policy Statement, the Reserve Bank of Zimbabwe (RBZ) chief said, total international remittances amounted to US$1.372 billion as of June 30, 2022, which translated to an increase of 23 percent from the US$1.113 billion recorded during the same period in 2021.” A significant number of this grouping wants to go back home to Zimbabwe, to work, set up businesses and retire, but many are unaware what awaits them. The segmented business landscape, makes it difficult for them to penetrate profitable established networks. The sixth cluster, the dealmakers, like in Mozambique are the local politicians, comprising the who is who of ZANU-PF. It has become a profitable enterprise to be a politician in Zimbabwe. Even opposition politics pays well, as they allegedly receive handsome amounts from the donor community. Many successful businesspeople are in one way or another aligned to the political establishment. It is a strategic move, lest you get targeted for takeover or failure. So you sensibly keep your head down and nicodemously consort with them privately, away from the glare of the cameras. The white farmers who survived the fast track land reform programme are connected at the highest levels in ZANU-PF. Infact, many are card carrying members of ZANU-PF. It is calculated, intentional and a shrewd move for business survival. Afterall, as a so-called democratic country, they are exercising their right to freedom of association. It is has never been enough to know people in strategic places, where you want to transact. They must acknowledge they know you enough to want to give you the business. It is who says they know you, in a positive light, when you are not around, who matter. They are the ones likely to give you business. Without relevant networks, with the willingness to give you business, or access to people they know, facilitating you getting the business you want, you are doomed. In Zimbabwe, certain races reserve business for their own. They do not buy from certain races too, this is so that they keep money circulating in their own community. It is conscious and deliberate. It is business exclusion and it is happening under our noses. But even within the black community, there are certain places you will never get business. Others will exclude you for religious reasons, eg, you are not SDA, others because they do not know you. The truth is most people transact with people they are close to, like, know or they have been referred to by trusted family or friends. It is what it is, so try to break the barriers and literally barge into some of these closed clusters, that have been mentioned in this piece.