Editorial Comment: Ours is not a captive market for second raters

By IAfrica
In Zimbabwe
Aug 1st, 2014
0 Comments
229 Views

THERE have been many benefits from switching to hard currencies in Zimbabwe, but the biggest single downside is the ease of importing since so many people, including we now learn many in State service, tend to think that foreign is better and that since we have US dollars in our wallets and bank accounts it makes no difference whether we import or buy local goods and services.
We agree that there were many Zimbabwean industrialists who took their guaranteed markets in the Zimdollar days far too much for granted and were prepared to sell second-rate goods or provide third-rate services without embarrassment. But they have largely been weeded out with competition, or have reformed and are now competitive.

And it is something that we need to learn that when we buy Zimbabwean goods and services we are creating jobs, and perhaps customers for our own goods and services. But when we buy imports we are exporting jobs and, since we import more than we export, we are also exporting our savings, that surplus value added, that should instead be used to create a far more liquid and larger financial sector in Zimbabwe.

The Government won an election on the policy that has been articulated in the Zimbabwe Agenda for Sustainable Socio-Economic Transformation to boost consumption of local goods and products, so creating jobs, so creating more wealth and also putting our economy back on track.

So it is not surprising that the State Procurement Board has been told to buy local where possible and where quality and price is not compromised. One major area where there has been some differences with some other Government agencies and parastatals has been over motor vehicles. The SPB wants these supplied by Willowvale Mazda Motor Industries, Quest Motors or Deven Engineering when at least the assembly, and in some cases quite a lot more, is done in Zimbabwe.

The same policy is applied for most other goods and services the State sector wants to buy. If there is a Zimbabwean manufacturer or partnership of skilled people then they should be given the work. We agree with the policy, with a couple of provisos. SPB chairman Mr Charles Kuwaza has already warned local manufacturers that they have to be competitive in price to benefit; the policy is not absolute. We would like to go further and see Zimbabwean firms going further and seeing just how they can use their special knowledge of local conditions to be better than external suppliers.

We take the example of the requirements of the army and police for trucks. The SPB turned down a request for Isuzu trucks and directed the services to WMMI. We would have hoped that WMMI might have done more than just sit and wait for a policy change and instead have worked with Mazda in Japan and engineering companies in Zimbabwe to come up with a set of vehicle options that would fit the requirements of the army and police better than any obvious import.

Flexifuel engines would have been one option, cutting running costs. Tailoring some of the body work would have been another obvious option. Getting the services to be specific as to what they would use the trucks for could have got some engineering imaginations working on the best Zimbabwean solution, but one at the same price as an off-the-shelf solution from outside.

Many countries, when they buy defence and police equipment, have special requirements. The Zimbabwe National Army, for example, probably does need to worry about how its vehicles will operate in snow nor be concerned about sea-salt corrosion. But it will, almost certainly, want its trucks to be able to carry troops and their equipment safely and efficiently on some dubious roads that could well be very wet for some months of the year, and it wants its trucks to do this without needing repairs every 100km. Offering the right engine, the right drive, and giving thought to the truck bed design could win a local assembler the order without any favours.

Zim-Asset must not be a protectionist policy. It must include the supply side as well as the demand side, and this means that Zimbabwean manufacturers have to work hard to prove they are the best option. It is not impossible. While some manufacturers and service providers are failing because they could never adapt when the old closed economy opened, others are flourishing because they decided to go for a winning formula of quality at the right price and were ready to use their knowledge of customer desires and needs.

Things like ISO certification, standards set by the Standards Association of Zimbabwe, smart ties to international leaders and a willingness to put their customers first have created a number of successful local companies. All Zim-Asset and indigenisation policies have done is make other Zimbabweans look at them closely, not choose them because there is no choice.

The SPB can by both favouring Zimbabweans and insisting on quality at fair prices do a lot to create the sort of industrial and service sectors we need without creating a captive market for the second raters.

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