Zimbabwe: government and business need to find each other

Confederation of Zimbabwe Industries (CZI) President Mr Sifelani Jabangwe

HARARE – Reflecting on the meteoric rise of Sony Corporation shortly after its formation, co-founder Akio Morita wrote in his memoir Made in Japan: Akio Morita and Sony, “I believe one of the reasons we went through such a remarkable growth period was that we had this atmosphere of free discussion. We have never tried to stifle it.” It is worth mentioning that Sony was founded just after the end of the Second World War, against a backdrop of deep uncertainty, when Japan was starting to rebuild its economy.

The cowed business

Free discourse between Zimbabwe`s business sector and the government has broken down over the years. Numerous arrests, the hounding of businesspeople to the point of some even fleeing the country, and being branded as saboteurs has become something that local businesspeople are accustomed to. These events hardly build trust and promote a healthy level of dialogue between government and the business community. In fact, so noxious has the relationship between business and government that in the 10 years since 2007 to last year, business and government only met twice, despite the sluggish performance of the economy that surely warranted much more frequent interaction.

In fact, in the September 2007 meeting, which came after then RBZ governor Gideon Gono, with support from government declared inflation as “illegal,” threatening to arrest and punish businesses that raised prices or wages; Mugabe berated business leaders for their continued insistence on the need for foreign investment in a stinging diatribe against dependence on the western community. For good measure, the business leaders ended up apologising to then president, Robert Mugabe for “letting him down”. In September 2017, little changed, in fact, business leaders praised government for its “steady progress on reforms,” in a 16-page presentation, which read more like a promotional brochure.

Honest and frank engagements between business and government have been lacking, stifled even. Yet governments the world over have consistently displayed ineptitude in diagnosing their own problems and an even greater incapability of administering the right treatment —  weaknesses which make a vibrant business community with the ability to speak truth to power a vital necessity.

Finding a voice

While the meeting on Monday with President Emmerson Mnangagwa was much different from similar meetings in the past, one gets the feeling that the business community can do much more, and say much more to confront government.

To their credit, business leaders were much more forthright, telling the president that the economy was “grinding to a halt”, and making representations that the clearly ineffective RBZ foreign currency allocation system, be done away with. However, quite possibly the biggest elephant in the room – that of the proclaimed parity between the United States dollar and the Bond Note went unaddressed, with government maintaining its stance despite market evidence to the contrary. These are the sort of uncomfortable conversations that need to happen if the country is to progress. An exchange of cold facts, and hard truths with absolutely no malice on either side!

In subtle and perhaps not so subtle means, business must make its voice heard. To the extent that businesses are directly affected by government policies, it needs to confront government over policy. The current dire economic situation has caused some tectonic shifts in how business and government interact.

A right rebuke

Earlier in the month, Delta Corporation rebuked government for effecting the controversial intermediated money transfer tax without sufficient consultations, while mining company Rio Zim also took the central bank to task over lack of foreign currency allocations, which have led to its three gold mines ‘involuntarily’ shutting down operations.

Collectively, the business sector wields so much power that it should actually be dictating terms to government – the essence of taxation with representation. Strive Masiyiwa`s recent comments calling for the scrapping of sanctions for instance, is one such example of business taking its rightful place at the forefront of economic discourse.  It cannot be left to government alone to lobby for the removal of sanctions.

In the Zimbabwean case, the general level of trust between government and business is not that high, and it will need to repair over time. Government constantly attacks the business community accusing it of acts of sabotage, while business accuses government of inconsistency in policy making. These fences will need to mend over time, and for this to happen more than anything, there has to be a healthy level of truthful discourse between government and business. The traditional hostility that has characterised interactions between the two must be in the past. – The Source