via Zim needs a paradigm shift | The Herald by Carter Maviza October 4, 2013
After the resounding co-hosting of the UNWTO General Assembly, there should now be a shift towards tourism as a major forex earner
BARELY a month after the announcement of the Cabinet, what the nation of Zimbabwe, irrespective of political, religious or ethnical background, needs is a paradigm shift.
This is the panacea that will lift our nation from the doldrums of quagmire that the economic forces of this age have relegated us to.
A paradigm is a general world view that is held by a group of people or generation for a particular period of time.
The term paradigm shift is defined as a radical change in underlying beliefs or theories that drive the philosophy of a people.
It is down this path that the solution bedeviling our nation can be found.
Elementary studies of economics inform us that production occurs in three levels which are primary, secondary and tertiary and of the late, the fourth level which is quaternary.
Since independence we have placed agriculture, which is in the primary level of production, as the cornerstone of our economy.
Indeed we cannot afford to ignore the ascending volumes of the golden leaf (tobacco) output, which earned farmers US$584,4 million during this year’s selling season, nor can we ignore the plight of the enduring cotton farmers who continued to brave the wave of low prices being offered by the buyers.
On the other hand we cannot ignore the recurrent droughts, that have hit our country and the threat that rainfall will no longer be predictable as before in the face of global warming.
Ignoring the environment and the lessons we have learnt, we will be heavily punished and generations to come will never forgive us.
We need to ensure that we address the challenges affecting sectors involved in secondary production to ensure that our agricultural produce fully benefits the nation.
We have for years hinged our turnaround on agriculture and of late tourism, after the resounding co-hosting of the UNWTO General Assembly with our neighbours Zambia.
We can indeed remove our main focus on agriculture as the mainstay of our economy and leverage on mining but we can not ignore value addition (secondary production).
We can fully plunge into secondary production manufacturing and processing while leaning on mining and agriculture.
The question that comes to mind is why value addition?
The value of processed outputs of primary production outweighs the value of raw materials, which is the output of primary production.
Technically, the output of locally grown tobacco fetched US$584,4 million from 158,2 million kg that went under the hammer this past 2013 tobacco selling season.
The value of cigarettes and by-products from this quantum of tobacco is at least US$1,5 billion.
Imagine if this was the value that was trickling into the coffers of local firms!
This is the direction we should be heading as a country.
The avalanche of skilled labour
We choose to relax in our cocoon of earning the few dollars that the foreign buyers of tobacco, diamond and ivory pay as the price pacesetters.
It is high time we put an end to this horse and rider economics.
We have to lift our economic model to hinge on value addition (processing and manufacturing) and in that way, we will liberate the masses of educated youths that loiter the streets.
We cannot force our skilled youths with technical skills and management skills to be tuck-shop owners.
What we want is investment in plant and machinery and the vibrant resuscitation of industry in Harare, Bulawayo, Gweru, Mutare and Masvingo and not forgetting the growth points, that are mere retail points as opposed to production centres.
We cannot continue to blame the education curriculum but we have to ride on the vast pool of skilled labour.
South Africa, the UK and other countries are not complaining about the nature of labour we are exporting.
This is because they see the value that this migration is adding to their manufacturing and processing industries (value addition drivers).
Why not shift the paradigm and turn around our economy?
Value addition comes with its own challenges that may require coming up with strategic arrangements whereby we acquire the rights to produce cigarette brands that are on demand in foreign markets.
If Delta beverages is managing to produce on behalf of Coca Cola (a United States brand) why not do the same for tobacco?
Imagine if all soft drinks and your favourite Coke were coming all the way from America!
Mining and value addition
Jewellery is expensive and has its value premised on the value of diamond carats it carries or the mass of gold embedded in it.
With the huge deposits of diamond and gold deposits that our country is sitting on we have the capacity to diversify our economy. This is key as we seek to indigenisation our economy.
However we must have checks and balances to ensure that we are not fanning fly-by night tendencies. This can be done by empowering people who are bent on just consuming without any regard to future implications of their actions on the economy or nation building.We seriously have to consider leveraging our economy on secondary production as a priority.
We must tap from the revenue being generated from mining and other fiscal sources to invest heavily in plant and machinery (the foundation of secondary production).
The platinum case and value addition
If setting up a platinum processing plant in the country is not profitable, then mining platinum ceases to be a profitable and viable venture. The economic prospects and derived benefits that come with the setting up of the plant is the major reason why the plant has not been set up.
The value of the output is tremendous and the employment created and the tax benefit implications are massive. The other reason why such an investment is not a viable option is because these firms do not want to account for the by-products of the extraction of platinum.
This is a subject that is worth pursuing. I am amazed at statements by the IMF and other Western interests who are championing the revival of agriculture as the mainstay of our economy.
Are these efforts sincere?
Given that the prescriptions from these bodies have done us no good in the past it would not be rational to rally behind the calls from such quarters as that could be a misleading regime to see our promising country continue to wallow in poverty.
We need to produce enough to feed ourselves first before we can hinge our economic turnaround on agriculture.
Indeed agriculture is a vital sector and a major concern in the era of global food shortages and Genetically Modified foodstuffs (GMO’s) we cannot at the same time hinge our development solely on it.
We have had many blueprints, indabas and negotiating forums that we can articulate from our sleep but have not yielded any meaningful turnaround for this beautiful nation of Zimbabwe.
A paradigm shift will require actual action, actual realisation and actual implementation.
The relevant Ministry of Industry and Commerce needs to be proactive in this shift.
Carter Mavhiza is a graduate in Finance and Banking from the University of Zimbabwe and a current ICSAZ student. Email: vhizworks @gmail.com