Kudzai M. Mubaiwa
The first quarter mantra has been that Zimbabwe is open for business. It is therefore appropriate to close the period with a simple qualitative reflection on the truth, or lack of it, in that statement for the small-scale enterprises.
Running a thriving small business in Zimbabwe is no mean feat. Every month and week dynamics are changing. Much of the small business owners issues stem from having to manage the cash and currency issues, and also manage suppliers and customers, all of whom have expectations that sometime do not match.
In taking the liberty to engage fellow citizens on this topic, I realised that for most businesses in the sample, this statement did not ring true.
Registration and Regulation
At the base of all activity are the formalities. One contributor shared how a long outstanding application for registering a digital innovation was moved on (at last!) rather quickly, at a much faster rate than all the years of waiting put together.
He could hardly contain his joy, as all the ducks lined up in a row and he could finally monetise his solution. He was not hopeful there would ever be progress, but this year it took one or two signatures and he obtained the necessary permit.
Yet another one indicated that she had recorded phenomenal performance in her food sachet’s production business since the first month of the year, after some “relaxing” on “some limiting factors”.
Both instances have been attributed by their promoters to the “subtle change in performance and stability in the trading environment” and growing sincerity of regulatory authorities.
For any enterprise to grow it must be formal and this is a mix of getting the entity registered, opening a bank account, signing up for tax collection, branding, getting a digital footprint, affiliating with industry organisations.
Many people went this route in the quarter after hearing the call and this stirred interest in new company — or rather Private Business Corporation (PBC) registrations as business owners recognised that they could not participate in any good thing coming unless they too demonstrated seriousness.
In turn the responsible authority improved significantly in pushing out registrations, no one wanted to be seen as holding up things.
In the quarter the tax collector, Zimbabwe Revenue Authority declared amnesty for those with outstanding taxes, as a means to reconcile with truant companies and hopefully collect from them in the future. The National Social Security Authority joined in the fray.
Both allowed a no question’s asked arrangement as neither one wants to lose out on the inevitable volumes that come in when most business is formal.
Not to be outdone, financial institutions came to the party also by lessening the demands for account opening — showing they are sensitive to the plight of small business.
We hope this first important formalising step (with all its attributes) remains easy in the next quarter. It must also be as painless as possible in process and pricing to encourage better volumes.
Benefit is only derived in the national economy when citizens deliberately feed into it through taxes. There is still a huge amount of work to be done on this score as many SME targeted funds are actually undersubscribed for want of organized, formal, takers.
Sectors Pulse Check and Payments
The experience in the first quarter was mixed, with certain sectors, like services enjoying a decent return on investment. The positive trend for services was hinged on increased demand by external consumers, market intelligence for example, and general public relations assignments, mostly by visiting foreigners; and thereafter the mandatory tourism.
Some people that are good with words indicated that copy-writing opportunities have increased and there is a decent transactions pipeline.
Respondents to the snap survey in other services like teaching specialist subjects confessed to just getting by, or at the very least surviving. The number of meeting events — workshops and conference also very likely enriched a few connected businesses as they fed into the requirements by host institutions — the supply of stationery, or personal toiletries into hotels.
Many that manufacture indicated that they were struggling, because of foreign currency shortages, in spite of the large lines of credit/commitments anticipated.
Retailers, in contrast, enjoyed steady inflows from consumers, never mind the inflated figures charged in order to make both profit and cover replacement value of stock.
Payment solutions emerged winners here as more and more people got confident, out of necessity; in utilising mobile money and mobile banking for transfers (ZIPIT) as well as making payments.
Curiosity on crypto currency heightened in the quarter as more people got to know about through the internet.
It remains to be seen if those in agriculture, tobacco farmers, especially, will earn the level of returns they want. It also appears that there was no real immediate impact to the small business world by the mantra or the deals signed since then from a liquidity angle.
The expectation for next quarter is that cash issues will improve, hopefully in a few weeks, and free up money for general household spending.
Connectivity and Power
A desktop review of the quarter would be incomplete without making reference to the digital age we are in and matters of connectivity. Data prices have remained high and very few small businesses may use Wi-Fi, the bulk of us are on a mobile pay as you go arrangement.
This has not stopped more people getting (more) SIM cards, increasing internet penetration, and the above average use of mobile money. There is also connectivity in the sense of getting access to basic power for small scale manufacturing and processing, and sentiment was that as long as getting a new prepaid meter is still difficult, then business is not yet open for the small time guy. In the same vein, another contribution was that getting a new telephone (landline) connection is still taking ages. We cannot afford to lag behind on such simple activities that make it possible for people to transact at a domestic level. This is particularly so when the world is continually moving and technologies improving whilst we are yet to master efficient delivery of the present one.
Domestic success in enterprise development is as important as external success in transacting large deals. We are only able to be open for business at the base level if we accept that small business is a shared responsibility and the three key players — small business, government, the consuming public, are deliberate in making doing business much smoother.
Is Zimbabwe yet open for small business in your view?
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