HARARE – Among the many things in short supply in Zimbabwe today are cool heads, especially among our business leaders.
It is quite evident that, once again, Zimbabwe’s economy is on a slippery slope, risking sliding back to where it was about a decade ago.
Inflation — an evil that devoured the Zimbabwe dollar in early 2009 — is baring its fangs once more.
Renowned United States economist Steve Hanke estimates that inflation has already scaled into three-digit figures on the back of exchange rate pressures on the alternative foreign currency market and wild price increases, amid serious shortages of basic commodities.
With memories of the 2007/08 economic meltdown still fresh in their minds, executives in corporate Zimbabwe have hit the panic button — thus aggravating the situation.
It is disheartening to note that in their fire-fighting, very few companies are thinking long-term.
All they are concerned about is survival in the short-term, without even considering the long-term sustenance of their knee-jerk responses.
By resorting to price increases beyond what the consumer can afford, are companies not pricing themselves out of the market?
In any case, is it not correct to posit that their workers wear two hats? Once outside their employers’ premises, they suffer the pain of the short-termism adopted by their bosses as consumers of products.
Naturally, faced with such extortionate price increases that eat into their pockets, workers are left with no other choice but to agitate for salary increases thus creating a vicious cycle on the part of employers, which can only be broken once market stability has been achieved.
That stability can only come about if there are cool heads in our commercial enterprises looking at business in the long run as opposed to it being a short-term enterprise.
The absence of such could tempt authorities to interfere with market forces, when they should be focusing on creating an enabling environment in which business flourishes.
In case business chooses not to be humane by profiteering, President Emmerson Mnangagwa made reference to legislation as an option at his disposal.
“We don’t think it is good to go for legislation, to legislate against prices,” he warned ominously.
But the absurdity of what he was cautioning against was laid bare in September when officials from the City of Harare tried to pass extortionate prices to Econet, which had answered to the call for corporate Zimbabwe to participate in the fight against cholera.
The outrage by Econet founder Strive Masiyiwa that followed this incident has shone the spotlight on the business practices in each one of our institutions, with Nyaradzo Group chief executive officer Philip Mataranyika posting some trade secrets in one of his latest Facebook posts that might prove helpful to corporate Zimbabwe as it grapples with the situation obtaining in our economy.
In the Facebook post, Mataranyika goes down memory lane; starting with the birth of Nyaradzo in 2001 as a funeral business, which coincided with the swift decline in the country’s economic health. By 2007/08, the economic crisis had reached its pinnacle, leading to dollarisation in 2009.
It was quite revealing to know how, like a duck taking to the water, “the new kid on the block”, enthusiastically went about signing up new business cases and soldiered on through the crisis period.
Against all odds, Mataranyika recalled how Nyaradzo honoured its promise to clients even when it was no longer fashionable in the industry to do so, going as far as disposing of some of their assets to keep their promise.
Driven by the conviction that no economic situation is permanent and that because companies have lifespans transcending generations, they cannot conduct their businesses as if they exist for the short-term, this philosophy helped create an unbreakable bond between Nyaradzo and its customers. “One may want to ask why we did what we did even when we knew we were losing millions of dollars subsidising our clients?” he posed a question, before providing the answer.
He said it was part of their philosophy, they believe that companies are created to exist into perpetuity while individuals live only for a limited time.
“A loss to an individual is a real and definite loss while an organisation or company can with time recover imagined or actual losses made.
“Individuals are in a short sprint race while companies are in long marathon runs with ups and downs. Hyper-inflationary periods are phases in a long marathon run that are painful but not insurmountable.
“We are not sure how long the current phase of uncertainty now gripping our country will last, but like has happened in the past, it definitely will come to pass.
“It’s another short or long uphill stretch in our marathon run as an organisation. Not one of our customers whose premiums are up to date will be denied service.
“In 2008, we were inexperienced and less prepared but we survived, thrived even and met each and every of our contracts with our customers. This new phase finds us in a very strong and robust position to stand with our customers,” wrote Mataranyika.
Against this background, Nyaradzo was able to ride through the first period, grow the business into the leading brand that it is in Zimbabwe now ranked the second largest life assurer after Old Mutual in terms of premium income.
If taken to heart by the rest of corporate Zimbabwe, Mataranyika’s advice, which is anchored on building trust and confidence, could help everyone pull through the current crisis.
NOTE: Gurira is a neoclassical economist and expert on corporate governance. He writes here in his personal capacity. He is available at firstname.lastname@example.org