While Zimbabwe’s private sector has done remarkably well in the last few years since coming out of the zero-growth era of dollarisation under the Second Republic, there is still more that can be done, especially if there is greater co-operation among private-sector companies.
Addressing the Confederation of Zimbabwe Retailers at the inaugural ED Mnangagwa Business Summit on Friday, the President was impressed by the fact that an average of 80 percent of goods on supermarket shelves were now produced in Zimbabwe, or at least packed in Zimbabwe when it came to products we cannot and do not produce.
But we now need to look at that other 20 percent. Some is the odd import for variety, or because it is a special luxury, and there will always be some market for that.
But there are also whole aisles of shelves where most of the products seem to be imported, suggesting that there are missing sub-sectors in our industrial capacity, and where opportunities now exist for these to be filled, or at least for new ranges of products to be added to the shelves.
One primary gap in local products comes in the skin-care ranges, shampoos, special hair products, dental products and the like.
Here just about everything beyond basic soap seems to be imported or mostly imported. Yet these products have fairly well defined ingredients and in any case it should be possible to look for local ingredients in some cases.
In fact, the innovation hub at Bindura University of Science Education is doing precisely that, looking at some of the traditional skin care ingredients and the like, and then getting the chemists and biochemists to work out just what the active ingredients are and how they work, and then rebuilding the formula, but this time in a form that is very precise with only the working ingredients and with dodgy impurities removed and other ingredients added.
There is more that could be done with conventional formulas. There used to be, when imports were limited by licence, a moderately flourishing local industry for these sort of products, but it has largely gone.
The President suggested retailers could branch out into manufacturing, and as they start off with a precise and detailed knowledge of their markets they should be involved, either directly or at least indirectly in partnerships with industrial concerns.
We already have house brands for a number of products, where a large chain of supermarkets is in partnership with a number of manufacturers and are ready to put their name, and so recommendation, on products that meet the retailer’s quality standards and are competitively priced.
One chain of retailers, made up of a number of independent store owners along with a large single block, use the self-branding in addition to access the bulk discounts that the largest chains can access more routinely and fill a warehouse where the smaller retailers can win the price discounts.
The point is that Zimbabwe consumers are used to retailers branding manufactured goods and so expanding the range with the retailers driving through investment and partnership the industrial production fits in with what is already there.
And there are a lot more areas where retailers can connect to the industrial base, not just the supermarkets.
At one stage most of the fabrics, textiles and clothes sold in Zimbabwe were made in Zimbabwe. In fact we were textile and clothes exporters. That changed and now most fabrics and clothes are imported.
In fact you have to look very hard to find the local product among all the imports in this retail space, largely now in the small and medium sector.
Some of the large chains of clothing stores still sponsor or own local manufacturing concerns, but the output has been falling.
Yet Zimbabwe is now rebuilding its cotton farming, so the most common raw material should be available soon, especially as local spinning and weaving, the bottom end of the industrial revolution, can be expanded quickly.
Admittedly some local concerns lost their market through producing inadequate quality, or charging more than imports, or both, in the days of import controls.
We can still find products from a specialist food maker, for example, selling for almost double the equivalent product from Egypt, and there is no excuse for that.
It was partly this sort of problem that killed off a good chunk of the local textile and clothing industry.
But we also have a lot of manufacturers who can produce the right product at the right price and simply need to expand their production and widen their marketing, which is where the links between manufacturers and retailers come in.
At the very least retailers can give manufacturers information, starting with someone has a better product at a cheaper price, all the way down to what is really needed is a new product with this sort of composition, at least this sort of quality, and in this sort of price range.
We also need to keep our eyes on the African Continental Free Trade Area, where local industry will not be protected by import licences or tariffs: in other words it needs to have the right quality at the right price, with the only modest advantage being the lower transport costs. But if it can produce such goods for the local market, then under AfCFTA it can export easily and what sells in Zimbabwe will sell elsewhere.
And this is another reason for far closer contact between the retail and manufacturing businesses, however that contact is achieved.
The Presidential advice was good and should be followed. – The Herald
