Dumisani Nsingo recently in Victoria Falls
THE Business Economic Empowerment Forum (Beef) is lobbying Government to craft a National Credit Policy to curb wanton financial indiscipline and penalise bad debtors.
Although the Reserve Bank of Zimbabwe has started operationalising its Credit Registry System to facilitate access to finance and promote sound credit culture, experts say poor business ethics remain a major challenge and blame mismanagement to premature closure of several firms over the years.
Speaking during a Matabeleland North provincial consultative indaba here on Friday, Beef president, Mr Solomon Matsa, said most companies that closed shop over the years were victims of over-borrowing and subsequent failure to settle debts.
He told captains of industry who included a delegation from the Chamber of the Chinese Enterprises in Zimbabwe that debt management was a serious matter in industry revival.
“What is the major challenge that causes most businesses to fail in Zimbabwe and the economic situation to gone down? One of the key issues we identified is that there is no integrity in Zimbabwe’s business fraternity. We don’t have a National Credit Act,” said Mr Matsa.
“We as Beef are busy lobbying for the Government to create what we call a National Credit Act as a pillar of business going forward.”
He said it was of importance for the country to create a comprehensive data base of all creditors as a panacea to tracking bad debtors.
“We must have a central data base whereby if you take a credit you are recorded and if you pay or don’t pay you are recorded as well. If you don’t pay your debt, the system won’t allow you to get any extra debt but if you pay, the system allows you to borrow more money so that you can grow your business. If a credit system works it means businesses are free to borrow each other or give each other schemes of credit because you are guaranteed that wherever you put your money, you can get it back and bad debtors must be penalised accordingly,” said Mr Matsa.
Beef also called on Government to expedite the implementation of the Local Content Policy so as to enhance the viability of local firms.
“We should have a strong Buy Zimbabwe policy. People in manufacturing or doing business in Zimbabwe must get first priority when it comes to business among inter-companies. So we are pushing that we should buy products from each other and we should support each other as business and our credits or debts,” said Mr Matsa.
The local content policy is expected to replace Statutory Instrument 64 of 2016, which removed several goods from the Open General Import Licence in order to protect local industry from cheaper imports. The Ministry of Industry and Commerce and the private sector have started consultations following concerns over limitations of SI 64 of 2016.
Mr Matsa said Government’s procurement procedures should benefit local companies while also ensuring that the local firms were allocated stakes in national projects.
“We are trying to create a system where the Government will create quotas. We don’t want the old situation whereby they are saying one has a 51 percent holding in someone’s company. As Beef we think it’s not fair, it will just create more problems. Rather, we are saying if our Chinese friends are doing business in our country, give us 80 percent of your procurement,” he said.
“We are saying whatever you buy must be from Zimbabwean companies so that you can manufacture what you want and sell to our people and make a profit. We don’t want to be involved in their profits. We want to be involved in their procurement. On those quotas we want to ensure that we also spread the cake we don’t want to have one entity having one business throughout the country alone we want companies to breakdown the cake,” said Matsa.
He said one of Beef’s founding principles was ensuring a sound relationship between business and politics.
“The reason why we came up with this organisation was that we realised that over the 37 years of the previous Government, politics ran without business so we decided that we now needed politics to run with business and coincidentally our current President (Emmerson) Mnangagwa said Zimbabwe is Open for Business, which really resonates with our idea of Beef,” said Mr Matsa. – @DNsingo