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Surviving under sanctions 101

11 Dec 2018 at 09:27hrs | Views
Cuba was under US economic embargoes for 50 years but managed to erect firewalls around its sovereignty . Zimbabwe needs to do the same - we have the brains and the capacity to do so.

The ministry of finance needs to immediately put in place mechanisms that support the creation of venture capital firms that can swiftly contribute to establishment of valuable local industry startups. The ministry can work with pension funds to support the unlisted investments.

A cleaned RBZ with a new board of directors will still retain the mandate of oversight on the non-commercial banking financing capital activities by the various venture capital firms that would have passed the test for registration as incubators of local industry.

The RBZ should also consider reducing the repo rate for commercial banks with a view to make business loans cheaper. Commercial banks need to remodel their functions by setting up project implementation teams that directly supervise implementation of all projects they finance.

The advantage of assuming direct supervision of project implementation phases is that projects will successfully take off thereby reducing the risk of business financing by banks. On the other hand, venture capitalists will secure their investment thru temporary shareholding.

Procurement Regulatory Authority of Zimbabwe (PRAZ) must effect the newly -completed e-procurement system in order to enable competent service providers to apply for and be awarded capital projects tenders with zero red tape. This efficient system will ameliorate projects delivery.

A law on informal traders in the fashion industry must be crafted compelling those operating free markets to form partnerships and combine their operations with a view to operating in form of chain stores like Babours, Greatermans etc. How will they function?

They will have to elect boards of directors that appoint qualified management and skilled personnel to work in their various chain stores. This will formalize their ventures, increase their pedigree as seasoned industry players and decongest the streets.

A similar approach can also be applied to those dealing in private food and catering provisions. This is how strong brands and local franchises can be started. It brings order in the cities and towns and raise the standards of doing business for our people.

Partnerships increase the book value of business operations which in-turn increases bankability  and access to expansion capital. If implemented successfully, this approach will remodel the Zimbabwe urban business environment and undoubtedly empower SMEs to become corporate enterprises.

Investment into scientific agricultural methods must be prioritised in order for Zimbabwe to be able to grow its own wheat, soya beans etc to eliminate the need for their importation thereby saving us forex. Command agriculture must be mechanized countrywide to ensure all-season activity.

Gold trading by informal traders must be controlled to eliminate under-trading cases by middlemen. This can be done by ensuring that Fidelity Printers becomes the sole buyer of all gold in Zimbabwe without foreigners approaching small scale miners and buying cheaply.

The same must apply to all other biggest foreign currency earners including tobacco and cotton. Local cotton granaries need to be revived and/or built in all cotton growing regions like Muzarabani to reduce the cost of transport and eliminate the middlemen.

Government needs to attract automobile companies to revive and setup car assembly plants locally. Statistics on the volumes of vehicle imports - before the new forex duty directive by the ministry of Finance - can be used to justify the existence of brisk business in the industry.

The health budget must set aside a portion for investment into recapitalisation of drug manufacturing companies like Caps and others. SIRDC needs to be encouraged to do more in this area of local medicine science. We cannot continue importing paracetamol and cough syrups.

The country has reached a point where strategies such as these need to be implemented without delay in order to save us from continuing to be on the receiving end of US sanctions. All this will be possible with serious executive commitment to fighting corruption.

Source - Never Maswerasei
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