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Obert Sibanda
IN my first submission I sought to unpack Bulawayo deindustrialisation and highlighted the political impact on the state of the manufacturing sector.

Today I continue my submission with focus of economic, sociological and technological factors that impinge on viability of the city’s industry. An analysis of these would help us to derive recommendations and chart the way forward. For starters, the economic variables, which affect Bulawayo and other towns are the same nationally.

Working Capital
Generally most companies need working capital. The machinery used is old and obsolete therefore there is need to retool but unfortunately most companies are unable to access lines of credit.

Liquidity
There is not enough money circulating in the country. This is exacerbated by the fact that the country is importing more than it is exporting. This then means that most of the money circulating in the country is mopped and taken across to South Africa and Botswana to import goods resulting in the market being starved of cash. The other major factor is unavailability of disposable income. There are fewer people engaged in formal employment and with big organisations like NRZ and CSC who are headquartered here having operational challenges the situation becomes worse.

The other factor is that the local products are not competitive in comparison with imports. Some of the causes are that, in general, the cost of production is very high. The chief drivers of cost of production are power, water rates, rentals, telephone and labour. Therefore, no matter how much we try it will be difficult to beat foreign products that land here as dollar for two.

Tariffs
The tariff regime needs to be revisited. Generally tariffs are used as a tool to manage the economy, that is, to increase tariffs in order to discourage importing a certain product and reduce to encourage importing. In our case tariffs are for the country revenue.

The raw materials must not be charged duty. Bulawayo’s proximity to Botswana and South Africa on the other hand is disadvantage because of the porous borders around Matabeleland and many small ones. The existence of those borders creates a passage for foreign goods that do not pay duty at all. This in my view is the major single contributor to deindustrialisation as the foreign products are threat to our local products

Brain Drain
The movement of skilled and unskilled labour to the diaspora negatively affected industries in that besides the skills flight problem, the large numbers of people who have left the country have deprived the market of potential customers.

The Socio-cultural paradigm
It is a fact that in this region, people are more conservative than the other parts of the country. They are calculative and do not like impulsive spending.

That is why we gained the tag (Ompondokayitshintshwa). We hardly see families eating out. This impacts badly on the local business.

Technological Factors
Most companies have failed to embrace technology and they are still operating in the same old way they started some years ago.

They have not been innovative and failed to move with technology. For instance if a company was involved in photographic equipment and failed to appreciate that almost every one carries around a camera in the form of a cell phone, they would wake up out of business.

There are a number of companies that have not been able to move with times and continue to produce products which the market is no longer interested in. I have heard a very interesting debate like this company used to employ 10 000 workers and this one used to employ 5 000 workers and they need to be capitalised to go back where they were before.

There is need to assess from time to what is happening in the world around us. We live in a global village and things are happening too fast while we are stuck to our traditional products and the world of technology is fast changing.

According to Philip Kotler we must stop marketing the makeable and start making the marketable. Companies should avoid falling in love with a product whose time has gone.

It is imperative to appreciate some historical background and facts about Bulawayo, which are often ignored in debate.

-Firstly when Bulawayo was known as the industrial hub most companies were in the clothing and textile, rubber and footwear sectors as well as heavy engineering to a certain extent. Clothing and textile and rubber and footwear, we do not need a rocket scientist to tell us that they have been destroyed by foreign products that have flooded the market. These “khothama” boutiques, flea markets have done more harm than good to destroy the industry. No matter what you do to reduce the price, one cannot match the price of these foreign products dollar for two. The heavy engineering were mostly serving NRZ, and the region. NRZ is currently having challenges and these companies are without business.

-Secondly we need to appreciate that most companies in Bulawayo are branches of companies in Harare. It is a fact that when companies are faced with operational challenges they close branches and consolidate operations at their headquarters in this case Harare. In a number of cases what appears to be relocation is in fact closing of branches to concentrate at the centre.

-The issue of shortage of water has been given as one of the reasons for company migration. This is more of a perception than reality. True there is a need for more bulk water sources in Bulawayo but let me state categorically without fear of future contradiction that any company which relocates citing water as a reason is in fact politicking.

While it is a fact that we need bulk water and our supply dams need to improve in terms of accessing water we are much better than Harare. Every household in Bulawayo has access to water. It is only those days when there is water shedding (demand management). In Harare there are so many suburbs or places that have not had water for years. Some places cannot even drill boreholes because the water table is low or there on high ground for instance in Glen Lorne. They rely on bowsers, buying water. Bulawayo has done very well in providing water to the residents. Let us continue to do that and let us not scare away investors by over dramatising the issue of lack of water. Let us continue with our efforts to bring bulk water and build more dams. So any company that has moved away from Bulawayo citing water shortage is not sincere because the largest consumer of water Delta has invested in the state-of-art plant in Bulawayo. Who then consumes water more than them?

NB: Article to be continued with focus on recommendations and what could be considered as best way forward towards revitalising and reviving Bulawayo industries.

Obert Sibanda is a prominent businessman based in Bulawayo and former president of the Zimbabwe National Chamber of Commerce. He writes in his personal capacity and can be contacted on 0772252088 or email [email protected]