How Zimbabwe can leapfrog 15 years

Zimbabwe is open for business. This is a statement that has become synonymous with President Emmerson Mnangagwa and his approach to economic turnaround.

This is the season to take Zimbabwe to unprecedented social-economic development heights given that the country is 15 years behind.

The advantage of being behind is hidden in the opportunity to leapfrog.

Zimbabwe should not make the mistake to follow the same costly development curve as those ahead.

Innovation and information communication technologies offer the best options for Zimbabwe to leapfrog the decades of underdevelopment.

One social media user profoundly says, “All the revolutions that matter have already been carried out by man. All future revolutions will be digital.”

History shows that countries that go through hardships can emerge with sustainable Innovations.

Sasol (South Africa Synthetic Oil Liquid) was formed in 1950 and listed on the New York Stock Exchange and generates US$14 billion revenue.

It is the world’s first company to commercially produce oil from coal. It contributes about 38 percent of South Africa’s fuel and about 4,4 percent of GDP.

Sasol was formed when the apartheid government wanted a solution to manage sanctions on fuel imports.

The technology was invented by the Nazis to fuel the Wehrmacht and the Luftwaffe during World War II.

Rwanda, a landlocked country, selected ICT as an economic driver and created a leading knowledge best economy in Africa.

In 2014, the South African ICT sector contribution to GDP was 2,7 percent which was larger than agriculture at 2,4 percent.

It is possible for Zimbabwe to use innovation and ICT to leapfrog under-development.

In the 1980s indigenous Zimbabweans wouldn’t imagine being in the mining business, yet artisanal miners currently supply about 40 percent of gold to Fidelity.

Medicine was reserved for pharmacies yet on Harare’s street pavements there are medicinal herbs for sale today.

The Zimbabwean education produced obedient employees and in the 1990s entrepreneurs were nicked-named “indigenous” or “briefcase companies” because a company was generally foreign-owned and associated with a building.

Yet today, Zimbabwe created the sixth largest informal market in Africa south of the Sahara, valued at US$7 billion, contributing about 50 percent to economic growth according to a 2014 IMF report.

The key question is how can we institutionalise the emerging indigenous innovation culture born out of economic hardships?

The FDI drive should not result in home-grown companies and informal sector being elbowed out by big foreign companies.

For ICT in particular, indigenous innovation can be suffocated by imported one-size-fits-all solutions. Zimbabwe should carefully select ICT leapfrog opportunities to minimises the “me-too” investment in infrastructure prevalent in African countries which creates debts that eventually leads to Asian, Europeans and Americans becoming colonialists through the backdoor.

It is cheaper to invest in mobile government solutions so that people can check their title deeds and birth certificates without travelling to Harare than increasing transport infrastructure.

The investment in mobile money was cheaper than bank buildings.

Malawi is using drones instead of roads to reach remote places.

The best practice is for total government ICT budget to be 1,6 percent of national budget.

The 2018 Zimbabwe Ministry of ICT budget is US$3,8 million which is about 0,1 percent of the US$5,7 billion National Budget.

For South Africa, the ICT budget was about one percent of the national budget.

These budgetary allocations will not enable us to leapfrog forward using ICT.

Although telecommunications is the most critical element of ICT, it should be noted that ICT is bigger than that since it includes hardware and software systems.

The critical leapfrog questions to be asked is why does Zimbabwe continue importing almost 100 percent of enterprise and government software?

Software development doesn’t require imported raw materials which leads to the infamous nostro accounts challenge.

The high number of universities producing technology degrees and the above 95 percent literacy rate – which is the highest in Africa – are the foundations for a software development industry.

Zimbabwe spent US$1,5 billion in telecoms capital investment in the last five years.

If e-Government and private sector ICT investment the figure is above US$2,2 billion, what has this huge capital investment achieved in creating a local ICT industry?

Perhaps little because more than 95 percent of the US$2,2 billion was for imports.

Zimbabwe needs to remove the colonial mentality that imported software from Europe and Asia is better than local.

Instead of focusing on FDI alone, ICT and innovation require use of incentive schemes to attract foreigners skilled in software development from India, China and Europe.

In fact, fast growing cities such as Johannesburg, New York and Dubai has a higher proportion of resident foreigners compared to Harare.

The 2018 RBZ Monetary Policy shows that 96 percent of the US$97,5 billion processed in Zimbabwe in 2017 used electronic and mobile banking.

In fact, the values and proportions per system were roughly, mobile money US$18 billion (18 percent) , RTGS US$62 billion (63 percent) and POS US$7 billion (seven percent).

US$1 billion worth of transactions were processed such that was RTGS 0,58 percent, mobile money 75 percent, POS 21 percent and cash two percent.

These are surely impressive figures from a financial inclusivity and cashless society perspective. However, the sad reality is that every key technology element for mobile money, RTGS and POS is imported except the tuckshop and some mobile Apps.

This a sector that Zimbabwe private and public sector should use to drive local production.

To enable ICT and innovation leapfrog, the Government should reserve at least 30 percent of procurement by ICT State-owned enterprises to local companies.

This is how China developed the likes of Huawei, China Mobile and Fibre Home, which are global ICT leaders today.

Private leaders should embrace ICTs and an innovation culture for Zimbabwe to leapfrog 18 years backlog in development.