Her plea must have fallen on deaf ears, judging by the incidence and length of bread queues in Harare today (PHOTO 1).There are four phases to projects that go wrong:
Euphoria
Disillusionment
Search for the guilty
Punishment of the innocent
Project Zimbabwe’s phase number 4 is now unfolding at retail outlets across the country.
The government ordered massive price cuts in manufacturing, wholesale and retail businesses last month in an effort to curb hyperinflation. The businesses initially ignored the order, prompting an aggressive government crackdown.
After Zimbabwe’s independence in 1980, the eighties were a decade of euphoria. Hopes were high laced with some youthful arrogance. People vowed that Zimbabwe would never go the way of the rest of Africa. Unfortunately there was no clear national economic strategy on the ground to ensure the country would go the prosperity route. There still isn’t, as far as I know! Economically we are still drifting aimlessly through time. However in the eighties an illusion of prosperity was created by generous aid funds that poured in from many directions. Some analysts believe the Cold War helped too. Both sides were extra generous to Third World countries like Zimbabwe whose support they coveted in the Cold War game. Whether the analysts are correct or not, one thing is certain. The inflow of handouts more than made up for Zimbabwe’s lack of sound economic strategy.
As the honeymoon tailed off, possibly hastened by the collapse of communism, Zimbabwe was in for a bumpy return to reality. Disillusionment set in. True to Zimbabwean tradition there had to be a scapegoat. The fashionable scapegoat of the early nineties was the Economic Structural Adjustment Programme (ESAP). So effective was the propaganda that even some guys who should know better were convinced that they were dupes of some cruel conspiracy out there. The acronym ESAP was translated to Even Sadza’s A Problem! So nothing is new after all!
Project Zimbabwe’s phase four is now unfolding at retail outlets across the country. It is now quite hazardous to be a player in the supply chain of consumer goods. Earlier in the year I was invited to be a director on the board of a company in the retail sector. It was quite an honour then. So I gladly accepted. However with the recent turn of events, it has turned out to be a nightmare. There is real risk of arrest hanging over all the directors’ heads. It is like sitting on a powder keg! Directors of OK and Innscor (some of the retail giants of Zimbabwe) have already been arrested for “overcharging”. If titans like that can be incarcerated on nebulous charges, there is little hope. In fact the price control task force has already been to rattle our cage a few times. Fortunately we are in compliance with the price reduction regime. Compliance however comes with a huge price tag.
We have had to sell a fair amount of stock at a loss.
Against such a background, restocking is difficult (PHOTO 2), even with the best will in the world. Failure to restock has its cost too, the threat of nationalization. If this is carried through then we will witness yet another economic disaster just when we were convinced we were at the bottom of the trough. One only has to look across the Zambezi (in Zambia) to see the disastrous legacy of nationalization.If those bearing the brunt of punishment are innocent, then who is the guilty party? Unlike previous trials, the guilty this time are difficult to define, let alone apprehend.
The current economic challenges have no domicilium citandi to raid, no physical persona to arrest, but nevertheless remain very real. This is probably why the authorities appear baffled. It all puts one in mind of that scene in John Steinbeck’s The Grapes of Wrath where the banker comes to take away the tenant farmer’s home and the tenant threatens to shoot the banker. The banker says it is not his fault, he’s just working for the big corporation. And the farmer asks, “Who can we shoot?” And the banker says, “I don’t know, maybe there is nobody to shoot.”
Contrary to popular belief, the problem is not just an individual. Several countries in Africa and beyond have fallen into this pitfall which I will call the limited view syndrome. Each time inordinate preoccupation with the removal of an individual crowded out comprehensive recovery planning.
“For every complex problem there are solutions that are simple, easy and wrong.” H.L. Mencken.
With each passing day, layers of ramifications continue to calcify into a labyrinth of complications. Problems of this nature usually have many layers needing to be addressed. They are a cumulative function of mistakes made over decades, and a very complex function at that.
It hurts to be forced to sell stock at a loss. However, it helps to spare a thought for others who have lost a lot more than us.
Makro (a wholesale giant) were forced to sell television sets for a song leaving a forlorn showroom (PHOTO 3). On the afternoon of 13 July 2007 I drove up that road to the airport that runs behind Makro. I noticed many cars parked all over the grass verges. At the time I just assumed that there was a funeral in the neighbourhood. It was only later in the day that I discovered that there was indeed a funeral, only it was at Makro itself. The wholesale is still open but only as a shadow of its former glory (PHOTO 4).
They have not restocked the electrical goods section. I wonder why! Every society has its share of simple people who do not see beyond their noses. Ndivo vainyinura vachidya huku yemazai (Such people are the ones who were hooting excitedly as they proceeded to slaughter and carve up the golden goose). So we thought anyway. Initially, we though it was just the scum of society that participated in the scrums. However respectable people were also seen leading the charge for a bargain. The cars I saw parked outside Makro suggest that if the price is “right”(if that be the right word), even respectable members of society can stoop low.At a growth point near Harare, the local member of parliament “bought” all the cement at a hardware shop after the price control task force had forced the shop to drop the price per 50kg bag from $1.5million to $170000. The honourable member is not believed to be building anything that requires that much cement. So it would be interesting to see the price at which he disposes it.
The share price of Pretoria Portland Cement (one of Zimbabwe’s large cement manufacturers) has dropped from $1million per share on 13 June 2007 to $700000 per share on 2 August 2007. The PPC share price has been largely sheltered from the effects of price controls because the bulk of the company’s business is in South Africa. They stopped cement production in Zimbabwe citing shortage of clinker. The directors will have to be very cautious because they could easily end up in clink.
Giant retailer OK Zimbabwe Ltd have been less lucky. For a start their chief executive officer has already been arrested. Their share price has plummeted from $1800 per share on 18 June 2007 to $680 per share on 1 August 2007. The loss is much worse in real terms because of high inflation.
Bata (the country’s largest shoe manufacturer) were compelled to drop prices on some of their lines by a factor of more than twenty. Their shops are all but empty now (PHOTO 5 ). In one Bata shop near me, the situation does not look as desperate at first sight. However on close inspection, it is clear that only one shoe type is displayed on all the shelves (PHOTO 6).
They have indeed lent new meaning to the phrase “window-dressing”. Prior to all this anyone who had a pair of shoes was a millionaire. Not anymore! So the price blitz has impoverished everyone in more ways than one!Buying a pair of shoes is now like taking a wife, difficult to find. For those lucky enough to find one, the initial outlay is nothing compared to the hassle factor of accessories required thereafter. Shoe polish is now hard to come by. I tried floor polish but bit did not work too well.
Because of the prevailing stock pressure, TM Supermarkets (PHOTO 7) are rumoured to be contemplating changing their name to MT Supermarkets (thanks Penny for that joke). TM Newlands is so empty it is like a ghost town, verging on the spooky (PHOTO 8).
When I was studying abroad in the eighties, we used to laugh at West Africans who were buying basic groceries to take back home. Seka urema wafa! Now we bring even bread from South Africa.
In the late eighties a colleague who had been working in Zambia related how hard it was to find Coca Cola in Lusaka then. Apparently one needed contacts to buy Coke there. We laughed hard in disbelief. Yesterday I went round looking for Coke in Harare. I could not find any in the shops. Even my contacts could not help! So I tried vendors on the street. It was a cloak and dagger affair there! I understand they are selling it higher than the government stipulated price. So they have to vet potential customers before they unveil their wares. It turned out they did not even have Coke. So much fuss for no fizz!
Manufacturers appear to be producing limited amounts at a loss just to avert nationalization. I should imagine they will charge the losses to their public relations budgets under the subheading, “Appeasement of Politicians Expenses.”
In my youth I watched a documentary on the invention of the transformer. They portrayed it as an unsung cornerstone of civilization. Without it long distance transmission of electricity is not practical. I vividly remember the narrator saying that without the transformer, we would each need to have an electricity generator at the bottom of the garden! In Zimbabwe we have a lot of under-utilized transformers today. We plead poverty but I beg to differ. I suspect we are just badly organized. Anecdotal evidence suggests that the total value of private electricity generators in the country exceeds the cost of building a few power stations. What we need is an entrepreneur who floats a listed power generation company. That way people’s investments in power generation would pay them dividends rather than guzzle their diesel. I suppose the risk of nationalization would be a rub there.
My favourite vice, doughnuts, has been solved for me. It is easy to see why. All the ingredients of a doughnut, including electricity and water, are in short supply. Convenience foods in general are now hard to come by. Everything now has to be done from first principles, including dressing chickens! The silver lining is that opportunities to overeat are much reduced. It is certainly much more work to put a meal together. In times like these it is important to find a wife who commands a reasonable cookery repertoire.
Unfortunately the personal toiletries necessary to attract a wife are gone. Previously the only item of personal toiletries that was difficult to find was dental floss. Now even soap is a problem, never mind anti-perspirant deodorant. This has made queues in confined places unbearable. I feel sorry for the hapless shop assistants who have to endure it all day!
Even car wash is a mission now. At my local car wash, they sometimes have electricity but no water. On other days it is the other way round. More recently they have been known to have both water and electricity but no staff! In another twist of the price control blitz, private minibus operators are incessantly persecuted. Many have parked their vehicles as a result, resulting in a serious shortage of public transport (PHOTO 8).
So workers are rocking up for work anything up to three hours late, which is a considerable improvement on normal.
To find out where all this might lead, I talked to some captains of industry and senior civil servants. To my dismay, they don’t seem to know either! A clue might lie in a conversation I had in the early nineties. I met a German diplomat who had been on tours of duty in West Africa. His wife reckoned Harare was not a typical African city. She said, “Harare is not real Africa. In West Africa everything happens on the street markets.” It appears we have now caught up with real Africa. There is not much in the shops. Yet life goes on! This can only imply that commodities are now changing hands at an informal level. Transactions have devolved from the shops onto the street. This spells bad news for the fiscus. It directly hits VAT collections and indirectly shrinks other taxes. So we may witness yet another wave of money printing.
All in all, the price control blitz has been an economic disaster. From another point of view it has delivered a political reprieve. For how long, nobody knows. Prior to the price control crackdown, we were certainly on the exponential section of the hyperinflation graph. From a political survival viewpoint, empty shops are a lesser evil than a collapsed national currency. By definition, a reprieve has a finite lifespan. A relapse is inevitable, sooner or later. In fact hyperinflation is still there, only covered in thick layers of make-up, much like a girl I used to know. There is still a lot of money in circulation without enough productivity to underpin it.
If things are this bad in Zimbabwe you must be wondering why I am still sticking around. Kwadzinorohwa matumbu ndiko kwadzinomhanyira. Hope is the answer. Zim is like a destitute beauty queen. The beauty is still there in the DNA and no degree of destitution can take it away. With some effort the beauty queen could be rehabilitated to her former glamour or even better. Sooner or later, reconstruction of the country has to begin. I believe I am bound to find a role in that future reconstruction. The worse the decline gets, the greater the opportunity to make a difference. Fortunately I am still socially lean (i.e. no dependents), so I should be able to dig in longer than most. For now just give me sadza and a glimmer of hope in the distance.
The main risk of course is that recovery may not begin during my working life. There are indeed cases in Africa where decay has persisted generation after generation.
Bye for now,
Will.
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