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Godknows Ncube

IN my previous submission I discussed the strategic option to localising supply chains and adding value to our domestic output. There is a need to strongly realign our national focus towards revitalising business so as to rescue our economy from the adverse impact of Covid-19.

Our key productive sectors should embrace innovation and this needs to be prioritised in terms of support to enable the sectors to effectively impact on the economic turn around and feed into the upper middle-income vision by 2030. These include small to medium enterprises (SMEs), transport, banking, information technology (IT) and education sectors.

Around the world, millions of people are filing for unemployment benefits every week. Just recently the International Labour Organisation (ILO) projected that more than 400 million workers will lose jobs across the globe. This means a large percentage of the current employed labour force is likely to be jobless and this will drive many to the informal sector business activity unless aid and other rescue measures are put in place. While some companies may have resumed operations under level two of the national lockdown, their survival and resilience is going to be difficult.

Inevitably, a lot of businesses are likely to file for insolvency owing to a weak business environment. Businesses are set to encounter a massive reduction in demand for their products whether essential or non-essential mostly because of weakening consumer buying power. Essential products will also be partially hit by a weak demand possibly due to inflationary pressures that have chewed spending. Major customers will gradually go bankrupt while shrivelled individual incomes and savings will be reserved for important basics.

The export markets are already being negatively affected by the contraction in global activity and demand. In that regard, the economy’s recovery efforts would likely be sluggish with possible sharp nosedives owing to the rising number of new coronavirus cases, which could spike in this cold winter.

It is highly difficult to do business whilst half of the business participants are on lockdown. This means stimulus packages should be properly planned and urgently disbursed for the benefit of businesses and the economy at large. Zimbabwe has a wide base of small to medium scale enterprises who should be strongly supported to give impetus to the economy.

Established business organisations will need to transform their operations and scale up digital innovation to enhance production capabilities. These should be aligned with the dynamic market expectations based on assessment of the business model to understand its future resilience. There are sectors that are doing well during this period such as those in the fast moving consumer goods that should ride on this opportunity by exporting more of their products and services.

Government and corporates also need to aggressively drive agricultural transformation. This is because a large number of the people who have lost their jobs will likely go to farms and communities to do farming.

A robust farming programme should include necessary inputs to produce all required food stuffs at home and farmers should be engaged to increase capacity to feed the nation and to generate foreign currency though exports. The sector needs to be prepared to withstand the drought seasons. Grants and related impetus packages should be channelled towards empowering aspiring farmers while protectionist measures should be put in place where need be.

This will somehow insulate our small and medium scale players against trade wars by large players and powerful farmers in the global industry. Irrigation schemes can also be revitalised and production intensified in marginalised and rural areas as part of the measures to decongest cities and towns which have large numbers of unemployed people.

There is a need to build a strong IT, transport, and a banking sector infrastructure. Of paramount importance is the need to enhance the easy of doing business, which requires relevant infrastructure. Such focus will help the Government and companies to manage the impact of Covid-19 on the economy.

Greater focus should be on digital investment to enhance the speed of electronic processing of transactions and invest more in data capabilities. Efforts should be employed in restoring public confidence in the banking sector and elimination of the dual ZWL$ pricing system (cash and ecocash).

The persistence of the dual pricing system will continue to discourage the culture banking of cash.

Given the weakening job prospects and loss of incomes, Government needs to be prepared to assist school children whose parents can no longer afford to pay for their fees. Non state actors and international organisations could also chip in and offer more scholarships to the vulnerable children.

Godknows Ncube is an accounts graduate, internal auditor based in Bulawayo and a member of the Association of Chartered Certified Accountants (ACCA). He can be contacted on 0773675191 for feedback.