Dr Gift Mugano
President Emmerson Mnangagwa led to China a delegation of 80 captains of industries and key cabinet ministers, as he pushes the agenda of engaging Zimbabwe with the rest of the world.
The President is quite clear in the matrix of strategies that he wants to see the private sector playing a key role in the economic transformation of our beloved country.
China, in particular, stands out as one of the best countries for Zimbabwe for a number of reasons.
First, the Asian giant is quite an ambitious country which seeks to assume the position of the largest economy in the world by 2030 and again at the same time being the biggest exporter.
Already, China is the second largest economy in the world and second largest exporter after the United States.
In pushing for this agenda, China is spending $5 trillion in building a new “Silk Road” which aims to connect the country with the rest of the world.
Second, China has more than one billion people, which provides guaranteed demand for any country that is serious in export business in an area of competitive advantage.
Third, China is rich with official reserves staggering around $4 trillion from which countries with bankable projects can access capital.
These three areas of interest from China opens up opportunities for Zimbabweans firms which should motivate them to take keen interest more than Government.
There are opportunities for the mining sector particularly in the supply of base metals required in the development of the silk road.
Out of the $5 trillion we should actually be vying for a good share of it considering the fact that we have vast mineral resources.
What is important is for our industry to identify areas where we can build competitive advantage with Chinese companies and on that basis work together in production and marketing of the products.
Ethiopia, over the years, was not anywhere close to competitiveness in the area of textiles.
Recently, Ethiopian firms joined hands with Chinese firms and from nowhere the Ethiopian garments are very competitive not only in their home ground but also outside the borders, that is, in Europe.
There is nothing which stops our companies say in the tobacco sector to come up with a bankable project aimed at showcasing the business case of processing tobacco into cigarettes and export them to China and the rest of the world.
A study undertaken by the University of Zimbabwe’s Economics Department some time back showed that Zimbabwe can pay the national debt from excise duties and value added taxes from tobacco if charged on processed tobacco.
This example amplifies the important role the private sector can play in addressing national challenges if it becomes outward looking.
Over the years, a number of Government delegations which have gone to China failed to secure funding on the basis of lack of bankable projects.
The above tobacco project is just one example.
Today, our industry is grappling with drought of funding and as such they cannot revamp their aging equipment.
It is against this background that private sector must take serious interest in coming up with bankable projects based on their current business activities with a view of unlocking funding from China.
It is apparent that in as much as there is money galore in China, we will continue to talk about and in most likely cases we will not able to access it without sound business proposal.
Going forward, private sector should actually identify countries where they have particular interest in, say Britain, and call upon Government to open way for them.
The logistical arrangements relating to hiring of a plane should be actually be coordinated by the private sector as they drive the Zimbabwe is open to business mantra.
The cats and dog relationship between Government and private sector are over.
It is now time for business and as such the business sector must take the lead.
◆ Dr Mugano is an author and expert in trade and international finance. He has successfully supervised four doctorate candidates in the field of Trade and International Finance, and is a research associate at Nelson Mandela University, registrar at Zimbabwe Ezekiel Guti University, and director at Africa Economic Development Strategies. He wrote this article for The Sunday Mail. Feedback: +263772541209 and [email protected]
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