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Morris Mpala, MoB Capital Ltd
IF there was ever a time in the Zimbabwean economic history where the producer was left stranded it is now. The producer isn’t realising the worth for his sweat as he has to go through a third party for him/her to sell produce. The agricultural sector is one of the worst affected.

This poses a challenge as it has increased a selling price without benefit to the producer more so with overheads. It’s a pity really because producers are not getting value for their money.

The major benefactor is the middlemen, who without overheads, is reaping more that the producer. His main cost are the phone calls and keeping up appearances.

Middlemen don’t contribute any taxes to any authority as it is always under the “desk kind of” transactions. What a cruel business concept we have unwittingly adopted.

It’s an economy where if you are not known or introduced, you cannot sell your skills, services or products regardless of quantity and quality. Most of these introductions come at a cost or they simply buy from you for onward retailing to the market.

If you can’t be introduced or can’t pay a facilitation fee then you will rot with your skills, services or products.

This makes pricing of your products and services at the mercy of the middlemen.

The power of middlemen even in major projects has increased the cost of development and services. It has led to overpricing of projects, poor quality services and products, thinned margins, reduced budgets for research and development, losses to producers, expensive products, reduced investments in products, remuneration challenges and so on.

It has created a cocktail of disasters and has distorted economic fundamentals. It is killing the economy as profit no longer lies where it’s supposed to.

In the work of unemployment, being middlemen has become a full time occupation. It’s now so complex that even major contracts are won by middlemen who have no clue on how to undertake such projects only to be subcontracted to the real service provider at a premium.

The major profit in the value chain is going to the middlemen to the detriment of the primary producer who is always at the mercy of the middlemen as the market at times isn’t easy to manipulate especially if it’s not a monopolistic product or service.

Such an unsustainable arrangement is such that one day the producer loses out and the other day it’s the consumer losing out.

The middlemen always win regardless of whether the necessary business acumen is there or not. The verve and aggression at which the middlemen tends to maintain his ‘cut’ (margins) is a bit disturbing as it is considered impossible for both producer and retailer to maintain that at all times.

What makes it scary at times is the middlemen can be employed by the buying retailer and there is double dipping by the respective employee, that is, from his pay and his cut.

Until we have a smooth flow from primary producer to consumer it’s going to be a long walk to address distortions in the economy.

If fundamentals get manipulated it creates a major challenge and addressing these needs bold steps but above all, integrity, which unfortunately is not taught in any classroom under the sun. Economic fundamentals have domino effect. One fundamental distortion in one sector causes distortions across the economic spectrum.

Middlemen are holding the country at ransom and evidence is there for everyone to see. At this rate if not addressed adequately it will destroy the economy as it is prone to manipulation from either side of buyer and seller.

Middlemen (of this type) have no value addition in the chain and are just freeloaders at the expense of producers and consumers. Basic commerce instinct will say NO to such vice as it is equivalent to an economic sabotage.

There is no value addition but unnecessary cost, which at times gets passed onto the consumer who has limited options.

Cry my beloved producer who only knows producing that respective product otherwise he remains a sedentary producer landlord if they can’t deliver their products.

These inefficiencies in the value chain are cancerous and the best remedy is basic Ubuntu.

Retailers need to purchase directly from known producers. The way banks have ‘know your client’, (KYC) retailers need that as well to cut out middlemen.

The producers need to come together and lobby for their recognition by retailers in an aggressive but smart manner by merely introducing themselves as the suppliers of goods and services.

In some instances registering with consumers of products and services is the step in the right direction.

In all this, the small farmer is having it rough and tough and you can only empathise. This sector will not survive this ruthless cutthroat and unforgiving ways of doing business.

My heart bleeds, my spine shivers at looking at the producer who would have invested so much (time, capital etc) get peanuts at the end of their production cycle.

So demotivating and makes them cease production and the whole chain is affected by principles of supply and demand.

Such is the unprecedented power of the famous middlemen.

The middlemen moves from one line to the next if one line isn’t giving him the financial satisfaction he desires.

This calls for the farmers to come together and specialise in their production but less than one banner that supplies most products and create the illusion of one big producer that can have some market influence.

Let the truth be told, the smaller farmers and service providers are in essence the major producers due to their numbers and cost wise the Zimbabwean economic model favours small and informal actors as it is hustle free.

To the middlemen, yes, you have seen a need and are servicing it. Yes you are making a lot of money and enjoying the finer things in life but remember we don’t live in a vacuum.

The distortions you are causing also affect you in other areas in the greater economy of your life. Please go to the mirror, thoroughly look into it and ask the man/woman you see in the mirror to change their economic ways for a better future for the next generation.

At times the producers themselves outdo each other in offering slavery producer prices in the name of taking care of immediate needs/wants. The middleman at times is argued to be a solution as they offer the market to the producer.

They are well resourced to the extent that in some sectors they literally buy (at slavery prices) all there is on the market for onward retailing to established retailers. Some middlemen are in fact the market in a way as they have a way of manipulating the system due to their financial muscle and network links.

Some have big warehouses as intermediaries. Others just pick products from one producer to the next. Then there are those who do not touch anything at all but once goods are moved by the producer to the retailer, get the bigger chunk of the profit on the transaction without incurring any costs.

Who then do you blame? The manipulative well connected middlemen or those offering themselves on a silver platter for manipulation?

Is there a third party to regulate what two parties seem to agree to a contract whether knowingly or unknowingly?

Is this duress of some sort? Are these negotiations an exercise in futility to producers? Is economics (trade) a fair game without Ubuntu or it’s about opportunity seeking and it’s about seeing a gap and plugging in? Is this being cunning? Is this the difference between playing chess and playing draft?

The answer lies in integrity and ignorance of the bigger picture of things!

While the debate rages on the runner is smiling all the way to the bank or the nearest used car sales floor at the expense of the person toiling on the barren land. Then that is when you know something is wrong in this polynomial economic equation, which is like solving a quadratic equation for the first time.

The culture is here and unlearning such tendencies is easier said than done but we have to do it because at one point in time we are all middlemen somehow.

If you live in Bulawayo please conserve water. If you live in Zimbabwe please use electricity sparingly: SOS (switch off switches). If you live on planet earth please preserve the environment.

Morris Mpala is managing director MoB Capital (Pvt) Limited, a microfinance institution offering loans, micro-insurance and advisory services to small to medium enterprises as well as individuals.