Perception greater than fact

via Perception greater than fact – The Zimbabwe Independent Editor’s Memo with Itai Masuku September 13, 2013

MANY who have done strategic management courses will remember the famous SWOT analysis method, where situations are analysed according to their Strengths, Weaknesses, Opportunties and Threats.

What is often forgotten is how weaknesses can be turned into strengths and how threats can actually present opportunities. This implies going beyond Hannibal’s “I see no mountains” maxim to something like “I see the mountains, there must be tonnes of gold in their crust.”

Zimbabwe’s so-called US$45 billion infrastructure deficit as per World Bank figures is an opportunity for Build Own Operate Projects.

There is no problem at Zesa; there are opportunities to seriously push for Private Power Corporations. The shambolic state of the National Railways of Zimbabwe is yet another opportunity for investment.

Throughout 18th, 19th and 20th century history, introduction of railways always catalysed economic growth. The list is endless. It’s just a matter of how this is presented to investors.

We are all aware Zimbabwe is at a crossroads in terms of its economic direction.

On the one hand, it desperately needs to take a huge leap forward in creating an environment that is conducive to attracting both domestic and foreign investment, particularly the latter.

The country’s investment as a proportion of Gross Domestic ratio, estimated at 27% for this year can be improved. Locals are reluctant to invest in their own economy. While it often holds true that outsiders can see opportunities where insiders don’t, foreign investors often take a cue from local investors.

If the locals are not confident in investing in their own economy, why should they (foreigners) be? It therefore cannot be overemphasised that investment is the name of the game where governments want to foster economic growth.

On the other hand, it is also understandable that while Zimbabwe wants to foster growth, it wants growth with equity. In other words, it wants a trickle-down effect of each investment dollar to the proverbial man on the street, hence its promulgation of the land reform and indigenisation programmes.

For foreign investors in particular, these two programmes have presented the greatest threat to their investing in Zimbabwe. It is clear that government has dug in its heels on these issues.

Its weakness, however, has been in how it has sold the programmes abroad.

The fact that some investors, including Canadians are willing to invest under such conditions means there is manoeuvrable space.

Everything ultimately depends on how the programmes are packaged. If they are enunciated in a confrontational and aggressive manner, they will also be received by the international community as such.

It’s a simple process of communication. If you encode a message in a particular manner, it will be decoded as such at the receiving end. In this regard, perhaps a word of caution would be in order for the incoming Finance minister Patrick Chinamasa.

Maybe because of continuous bickering in the just-ended inclusive government, the respected man of laws has often been brazen when putting his points across. There is no doubt in legal circles that the man is a respectable lawyer; even his counterpart in the GNU Tendai Biti acknowledged that.

However, he must remember that he’s now handling a portfolio where perception, in this case investor perception, tends to have more impact than fact.

For instance, why, according to World Bank figures, did Guinea Bissau attract more private sector investment in (US$3,8 billion) 2011 than the rest of Africa? Yet, it’s such a small country, which on average many will fail to point to it on a map.

Moreover, it has all the worst indicators against it such as being on the lowest scale of the UNDP’s human development index as well as the lowest per capita GDPs in the world . It has a history of military coups and has been placed on the United Nations narco states list.

Surely, Zimbabwe’s record is better than that! What economic ministries, led by Chinamasa’s, have to package are the opportunities presented by Zimbabwe’s threats.

This should be food for thought for the incoming government.