eBusiness Weekly
Elias Pacheso
Following a six week long blanket lockdown in which only essential services were allowed to operate, the Government this week lifted the lockdown under strict conditions, which include continuous compulsory testing for workers before they are allowed to return to work.
According to a government gazette published this week formal businesses have 14 days to test all their staff working at their premises.
Informal businesses remain shut.
These measures follow increased calls for the relaxation of the lockdown to avert further economic decline. On the other hand, the country’s health sector also remains under pressure and needs funding to be able to deal with increased cases in the event that there are more infections.
The reopening of businesses at a time the threat of further coronavirus infections is high has drawn mixed reactions, and rightly so. The number of tests done in the country as at the end of day Wednesday May 2020 stood at 13,329, with 34 positive cases, 4 deaths and 5 recoveries.
Bulawayo has 12 positive cases while Harare has 13 positive cases. That Zimbabwe’s cases have remained low at 34 positive cases is commendable under the current conditions, in-fact many believe that it is really a miracle.
This week we will focus on what has been happening over the last 6 weeks with particular attention on what this means for the economy in the short to medium term.
It goes without saying that the environment has been transformed and has brought with it a number of unforeseen circumstances for businesses and consumers alike.
With these changes, the cost of doing business has definitely been impacted on and for many significant costs have been incurred as a result. While the government has announced a ZWL18 billion stimulus package, at a time the nation was already struggling and has requested for international assistance.
This is seen plunging the country further into debt as this is 10% of gross domestic product. It goes without saying therefore that such spending should be strategic and must introduce more sustainable sources of revenue in the future.
We must not spend for the sake of spending. The World Bank this week announced that it would release USD7 million in grants to assist in the fight against the pandemic at a time the government has indicated that it needs over USD200 million to avert a health crisis. Other governments such as the British Government, UAE, China have also come in with their own support.
Whilst welcome this help is a drop in the ocean but remains welcome considering the situation on the ground. Faced with such a dire situation it is clear that citizens and local businesses are having to find means and ways of plugging the massive resource gap by meeting some of the costs of fighting the pandemic. Some of these direct costs include the testing of staff and provision of protective equipment to frontline staff.
The government has published regulations that make it illegal to leave your home without a face mask in order to stop it from spreading.
The conditions under which the disease has taken root are not ideal and citizens must continue to practice social distancing and practise proper hygienic practises to maintain the current success being seen in containing the spread.
That the government has allowed business to resume should not be seen as an indication that the threat is reduced. No one should relax as doing so will result in a bigger problem going forward.
The lessons over the last 6 weeks have been many and I have highlighted in previous articles the importance of proper planning and strong institutions. As an economy Zimbabwe and its citizens have gone through a very difficult time and for much of the country’s 40 year history, the nation has had to rely on its domestic resources to solve crises with very mixed results.
At no time has the government social spending been put to test as it has now. It would be foolhardy to assume that the country does not need external resources to avoid further suffering among the most vulnerable, not to mention those at risk of losing their livelihoods.
Problems or challenges hit the hardest at times like these and history will show that even wealthy nations need external resources to stem pressures and solve crises.
As a country we must make important choices and craft policies that lift us off this precarious path where we remain vulnerable to so many exogenous factors. As I have advised in the past we must start with the very basics, such as food self sufficiency and food security.
What models work when it comes to growing enough food in our nation? What is the most efficient way of producing enough food? What do we need to do to ensure investment in the Agriculture sector is profitable?
How can we deal with land issues once and for all? What are we good at producing and which markets can we sell to? All these are important questions which we continue to struggle with a country year in, year out.
After we have answered these questions, we must look at our agro-processing and value addition sectors and say now that we have enough raw materials to process, what are we good at producing and where should we be exporting to?
The issue of food security is not just a problem facing our economy. It is a topical issue across the world and we must be strategic in our thinking and plan ahead and prepare for the surge in demand for food and find new markets. Post Covid-19 new trade deals will be signed as old relationships are broken and new relationships found.
Where will Zimbabwe be? As an economist I hope that enough attention by relevant ministries and by industry bodies is given to some of these issues that keep me up at night.
As business people we must also give particular attention to these dynamics and review our current business structures. Covid-19 has altered the world economic order and ushered in a new way of doing business.
Do we understand what this means for our country, businesses and markets or are waiting to be swept away by the changes. Are we making the right investments in the right areas to safeguard our place in history?
Such questions are necessary and to get answers we must all be open to new ideas and encourage innovation and experimentation. Zimbabwean institutions have traditionally not placed a lot of importance on Research and Development and this shows in how long it takes us to shift business models and adopt new ways of doing business.
This needs to change and thankfully we have the catalysts for this change to happen. Last week some young entrepreneurs launched a number of innovative prototypes to fight the spread of coronavirus.
Young innovators need the support of the government and big businesses to turn their ideas into real solutions, especially at this time when the world needs solutions. This is one of the fastest ways we can develop our nation.
