Sir Nigel's Journey…

I haven’t blogged properly in almost 2 months now. And if you’re wondering why the silence – sadly and unfortunately I wasn’t kidnapped by ‘’Mugar-be’s Firing Squad’’ as reported on SKY News late last week! I simply took some time out from writing to fully appreciate and familiarise myself with my ‘new’ surroundings. I’ve moved back home now and I’ve spent the majority of my time settling in, spending time with family, networking, adjusting to my new job and dealing with the weather. Yes the weather! You must appreciate that when I left the UK, the temperature was -10 degrees and now I’m basking in typical 20 plus degrees on a daily basis. Lucky me! My body is, as you can imagine, more confused than ever! By the way, I don’t mean to show off about the 20 plus degrees either – it’s just that life is so hard for me right now!

On a more serious note though, I thought it might be more useful and effective to actually take in the reality, experience it and share my findings with people on the ground first before mouthing off and documenting my thoughts for the rest to read. One thing I have realised about my own perception of what was happening on the ground prior to my move home is that, too often I politicised things way too much. You see, my previous perception of what was happening in Zimbabwe was constantly dictated by the typical news headlines we often read, which more often than not are headlines solely focused on the coalition government and the various battles therein. Right Now, I couldn’t honestly tell you if Tsvangirai, Mugabe or Mutambara are actually in the country or if they attended the last cabinet meeting. I don’t really care to be honest. Now my main focus revolves around the various staff I manage and their welfare more importantly. I worry about Sebastian’s son who just started Form 1 (high school) and if he made the right choice regarding the boarding school he sent his son. Sebastian is one of the senior members of staff at work. I worry about how HIV/AIDS will affect the overall business operation I’m involved in. I worry about ensuring we have a good mix of staff members taking into account race, tribe and more importantly gender. I have been reminded since I’ve been back just how much race and tribe influence and affect some of the business decisions many business people make. In short I have been adsorbing and living the true reality of life in Zimbabwe.

Those who personally know me will tell you that I love to talk and share ideas et al. I have SO much to discuss and share about life in this part of the world. So much is not documented properly and I am conscious that every newspaper out there has its own agenda. As a blogger and a somewhat social commentator, my agenda is very simple. My mission is to play my little and perhaps insignificant role in helping to rebrand my beloved country and continent. The end!

Till the next blog post….

Aluta continua

New Media

I came across two new newspapers – H-Metro and NewsDay. I had been following the NewsDay updates for a while now via Twitter and other various newspapers. I heard about them both prior to this trip but I just hadn’t physically held them in my hands. On the first day of the working week I bought both of them from a newspaper vendor opposite the Parliament building in Harare. After paying for the two papers, the newspaper guy handed me this yellow coupon with the words NewsDay clearly written on it. NewsDay is priced at $0.50 and the coupon is the ‘change’ from my $1 payment so I could presumably buy my copy of the same paper the following day – clever newspaper people I say!  I asked around as I tried to gauge what people thought about these two newspapers. Essentially the H-Metro is a daily gossip tabloid owned by Zimpapers whereas the NewsDay is a Trevor Ncube creation (Trevor Ncube of The Independent, The Standard in Zimbabwe and Mail & Guardian in South Africa). NewsDay is currently the only daily independent newspaper in Zimbabwe. More will come onboard given the media licenses handed out earlier this year.

Gokwe

The only Friday I was home, I managed to drive to Gokwe. Along the way I drove through Chegutu, Kadoma and turned right after Kadoma into the road leading me to Gokwe. Bad move! The road wasn’t that great, in fact it was just terrible, pothole ridden but I managed to get there in the end albeit frustrated about the potential damage to the car. The previous weekend, I had driven to Murewa and Mutoko. On both occasions I enjoyed the drive, passing through various toll gates used to raise much needed revenue for the roads and their upkeep. I saw people actually repairing the roads on both days interestingly enough – no photos though. See! – We’re slowly rebuilding our country. Funnily enough, I read a tweet from a Bulawayo based friend of mine recently also confirming that roads are being repaired there too!

Essentially I had gone to Gokwe for an interview – yes that’s right an interview. You see Gokwe no longer a growth point is in fact a town. I have been reliably informed that to be considered a town; a magistrate’s court must be present. The town was a hive of activity when I arrived at lunch time that Friday. I could see several banks on the main street namely Agribank, Barclays, CBZ and POSB along with a plethora of other shops. So the interview – what was it for? Like any growing town, it requires constant investment. So the town council put an ad in the paper for investment opportunities. What investment opportunity you ask? The town council need investors to buy land in the centre city to build shops and service the growing community. Interesting wouldn’t you say? Most of my friends (the diasporan social circle that is) tend to think of Zimbabwean investment opportunities with particular reference to Harare, Bulawayo, Gweru, and Mutare.Yet there are legitimate investment opportunities elsewhere – here is a classic example! There were easily 50 people who attended those interviews that day. Some came as far as Bulawayo and some were the local heavyweights.  After the discussions with the relevant authorities I drove back and now await their decision. I’m confident that things will work out. I noticed something interesting on my way out; construction of more classes for an existing school. I stopped and asked the locals a few questions while I bought some mbambayira (sweet potato) for Mum. Confirmation that the town is indeed growing and that new building projects are taking place in the high density areas. I asked about the area, the people and generally how the local economy sustains itself? – 2 things: farming and mining. I thanked the polite ladies I spoke to and off I went. I took another route this time (longer but definitely safer). I did however get caught up in late Friday traffic to Harare and I had a dinner to attend at 7:30pm – I was running late!

Rotary Dinner

This dinner was a Rotary dinner to introduce the new President for the start of another Rotary year. It was an excellent networking opportunity and a chance to hear and discuss with various people about one of my favourite subjects – Zimbabwe. Kumbirai Katsande – CEO of Nestle Zimbabwe, was the guest speaker that night. He spoke about the challenges businesses in Zimbabwe face as did most people I met during this entire trip. He also spoke about the opportunities and shared his thoughts on the business environment. He was however very optimistic and it left me thinking a great deal. If this man at his level in industry can see further than I can and is optimistic as he was, then surely the future must indeed be brighter than most around me can see? Overall it was a very well organised evening and I look forward to meeting more people like this group in the future.

Dr Fay Chung

I met Dr Fay Chung at a gathering we both had been invited to. Of course I just happened to be in the crowd and she was in fact the guest speaker. She spoke openly about the Zimbabwe now versus the Zimbabwe a year ago. She didn’t mince her words to the surprise of the audience and had some interesting stats about the current HIV rates, ARVs and other related social issues. Overall she said HIV is decreasing in Zim whilst access to ARVs is on the increase. She spoke as expected on education and she had some alarming stats and those stats left me saddened somewhat. Something must be done me thinks. We actually spoke afterwards, shook her hand and shared a joke – Ha she laughed at my joke! I have washed my hand since then just in case you were wondering. Seriously though, Dr Chung’s perspective on the current Zimbabwean situation was very informative. I must make a mental note to find her books soon. I tried Kingstons with no luck.

Over-politicised Zimbabwe

Everywhere I go and most Zimbabweans I come into contact with (in my opinion anyway) tend to politicise Zimbabwe to the point where most can’t even identify the positives anymore. I have often said that small business is what really drives economies. It’s the Mum and Dad companies i.e. the plumber, the butcher, the hair salon that I’m referring to here. I am frequently saddened by the general attitude of fellow Zimbabweans abroad. We politicise most things when most times there’s really no need to! Often we don’t have real facts either. I spoke to numerous senior managers and business owners most of that week I was home, and we discussed at great lengths what was going in their respective industries and companies. These guys are excited about the future albeit the challenges they face right now e.g. retrenchment laws, getting & maintaining strong management teams, potential issues with new empowerment laws and the subsequent effects of that. They also understand the challenges of coalition governments as do the Kenyans and yet projections in Kenya are approximately 7% economic growth this year WITH a difficult coalition government situation. I personally know some Kenyans living in Kenya who say that they don’t seem to worry about the political arena as long as economically things are moving forward. To quote my friend, ‘the politics will sort itself out eventually’. Business is what drives their economy like most places and this is what the Kenyans I spoke to believe as well. While some Zimbabweans sit around discussing who did what in which Zim government meeting this time, who went to who’s daughter’s wedding and why Mugabe and Tsvangirai travelled separately to the World Economic Forum in Dar es Salaam earlier this year, there are players on the ground who are discussing with their banks about more funding to renovate and/or expand their businesses. And ‘Yes Zimbabwean banks are lending’ albeit with extremely high interest rates but there are lending contrary to popular belief. The challenge now is for the business owners out there to model your businesses around that situation – true entrepreneurial skills come into play here. It is manageable, you only have to look at other sustainable businesses that have borrowed large sums of money and are paying it back somehow. Something is clearly working there for them. My free advice is to find out what it is.

I believe that the time has come for us to put our political differences aside and focus on the future of our beloved country. There is, as always in any situation a minority who haven’t let go of this ‘over politicised’ mentality yet the majority will all agree that a healthy Zimbabwean population requires a healthy Zimbabwean economy. I am only too aware of the past hurt which hinders progress in this area. There is sufficient evidence out there to illustrate this. This unfortunately is not my area of expertise however I also know that healing and reconciliation are required for us all to remove this pain and anguish which I fear heightens this sense of an over politicised Zimbabwe.

Final thoughts

I still didn’t get to see all the people I wanted to meet especially my Twitter Family. That was probably the hardest bit to deal with. I was very fortunate to meet and network with some people despite the hectic schedule that lay before me. But I also know that I will meet and see these people soon. I have already started counting the months, weeks and days. There is much work to be done in that beloved country of ours. The number of people going back home (for various reasons) is increasing and that’s very encouraging especially for parents. I can only imagine. They send their kids to school and some have been away for 10 odd years. That’s 10 years of missing birthdays and other such important dates. I smile from within when I hear stories of families united again after long periods such as this. Going home also reminded me of my position in my own family. Living out here, one can easily forget such things and the responsibilities that our role as children carries in our society. In conclusion, I can honestly say that I believe in the future of Zimbabwe and the last few years have shown us that irrespective of what happens, we will survive but more importantly we will always make a plan.

God bless Zimbabwe!

I continue with the Zim trip update where I’ve been sharing various thoughts and observations about my short business trip last month.

My disclaimer: I’m not an economist by any means so some of my ideas or thoughts are mere interpretations of situations or conversations. What I will say though, as a number cruncher with the kind of experience, education or exposure to different economies as I have under my belt, my main focus tends to be the SMEs (small and medium size enterprises). This specific group within the business environment is what drives economies in real terms. I worry about the challenges they face especially access to capital or lack of it as is the case.

This issue of liquidity in the financial markets was a topic of most business discussions I found myself involved in. With approximately 15 commercial banks in Zimbabwe one does in fact wonder how we are ever going to overcome this liquidity crisis with way too many banking institutions operating in Zimbabwe. The banks themselves are unable to lend as much as they would like to due to funding issues on their part. As banks struggle to access offshore credit facilities and so forth, this then directly affects local businesses attempting to recapitalise their businesses in this dollarized economy. I met a few individuals with great business ideas (inspiring ideas really) and yet face the uphill struggle of trying to access adequate funds to achieve their business objectives. As I sat down after ‘Day 3’ of my trip, the reality of the current challenges really sank in. We had all hoped that the IMF talks would yield a more favourable result financially whilst injecting much needed confidence for any potential external investor. We also hoped that investment and cash inflows would be much higher than currently being experienced. We are also aware that there are several large interested parties looking to invest in Zimbabwe and yet some are simply waiting. Waiting for what exactly? Well, some say they are waiting for possible elections in 2011 so that we no longer have this coalition government setup. Some were scared off by the proposed indigenisation laws announced in early 2010. Depending on whom you talk to, there seems to be a plethora of reasons why Zimbabwe’s economy is not growing as expected. As I sat there, I fully understood the implications and the challenges we face going forward. The other important aspect is the actual cost of capital. Speaking briefly to one individual about this actual cost of capital and 5% per month was thrown around. Seems extremely high right? Look at the money market rates at Kingdom Bank and it all starts to make sense.

 We are still operating largely in a cash economy with a multitude of SMEs in particular bypassing banks and passing their daily cash sales directly to their suppliers. This is done mostly to avoid paying bank charges as opposed to lack of confidence in the banks themselves. This situation obviously has adverse effects on the banking sector. The lack of plastic money across the board has limiting effects on our growth potential but I hear that this situation is currently being looked at the moment and should be addressed shortly. We are already seeing signs of this coming through now. CBZ, Barclays and Standard Chartered all have the facility for overseas travellers or residents to withdraw their cash using a VISA debit card. I can not advise on the actual bank charges associated with this but the important aspect is that it is now possible in Zimbabwe.

Till the next update…

Aluta continua

Early last week by chance (or God inspired as I put it) I happened to be in one watering hole in Harare. The strategy was to sit down and brainstorm with M Snr (Dad). I had spent the day in various meetings gathering information and tonight I was in fact preparing for an important bank meeting the following day. I came across a gentleman, who funnily enough is included in my Sir Nigel’s ‘Who is who’ of Zimbabwe (still a work in progress but coming along nicely).Anyway this particular gentleman is a banker or sorts and probably not the one we’re all thinking of either. He spoke at great length whilst we shared a bottle of red wine. He initially asked about my background and of course I told him. He rattled on about my generation and our need to carpe diem – ‘seize the day’. You see, he like I believe that Zimbabwe is on the cusp of something extraordinary. We spoke about the current business environment, the challenges and the opportunities that exist now and in the future. Needless to say I gained much insight from our discussion that night. Call it what you will but meeting him that day was no accident at all.

The next morning I attended a breakfast Rotary meeting with M. Snr in town. I’ve been to these breakfast meetings before of course, but now my mindset has shifted somewhat – I listen more and try to ask pertinent questions. The discussion revolved around ‘retrenchment’ and the challenges associated with that in Zimbabwe right now. On the various trips home, I have always spoken about the high number of airport staff members I see as I pick up my luggage at Harare International Airport (anyone else see this or is this just me?). Anyway, the issue of retrenchment has been thrown in many business discussions recently as companies and various organisations attempt to make strides in operating sustainable businesses. You will recall the hyperinflationary days (how can we forget those days?). By the way, the key word here is ‘sustainable’. Years later with improvements in technology and business practice among other things, companies now have to face the reality that many are in fact ‘over-staffed’. There are recent and high profile cases to illustrate my point – Air Zimbabwe is one such organisation with some 400 odd staff member earmarked to go and in fact the case is currently being dealt with by the courts. Generally speaking, retrenchment in Zim involves a laborious process where an application is submitted to the relevant authorities with the usual supporting documentation etc. I would go into the detail but the little I know typically involves: – a notice period for the individual (s) of 3 months. There is a calculation for the severance payment typically based upon the number of years served but we’ll leave that for the HR guys. Essentially the current laws make it harder and extremely costly to retrench staff even if it’s in the best interests of the entire organisation. Organisations are grappling with this reality and for the mean time are stuck in a catch 22 situation. Do you retrench the 400 odd staff in an attempt to run a sustainable business (which requires further investment or a partner either way as is the case with Air Zim) and leave a massive whole in the coffers or do you ignore the monthly wage bill and therefore prolong the evitable? Tough choices lie ahead for businesses in Zimbabwe. I suspect the business community and relevant authorities will sit down to address this in due course – I hope this happens very soon.

A few weeks ago I was doing some bedtime reading as I tend to do most nights. Interestingly enough, on this occasion I was reading TA Holdings’ financial statements (as you do) with particular interest to the Chairman’s Statement. Shingai Mutasa (another on my list of Sir Nigel’s ‘Who is who’ of Zimbabwe) wrote about how today’s managers needed to adjust to the current business environment i.e. lower margins and the USD currency situation. Apparently and according to others I’ve spoken to, the last 10 years have seen some managers become ‘dealers’ instead of managing the 2, 3 or 5 year financial projections set out by their respective businesses. I spoke to several business owners and managers about this pertinent issue. Was it true that some managers had become ‘dealers’? I guess the short and easy answer is yes. Imagine converting say USD$100 into Zim dollars and running your whole business on that all month. Imagine hunting down raw materials and finding them over-priced somewhere. So you stock up and only produce minimal amounts whilst holding onto the remaining raw materials (remember in hyperinflationary times it is best to hold your ‘cash’ in some asset, in this case the actual raw materials). I know firsthand the challenges of shifting one’s mindset from this abovementioned scenario to the current status quo. I spoke to one individual who suggested that the seemingly high movement of senior managers from this organisation to the next was as a direct result of this need to ‘refresh’ teams in an attempt to address this very issue. I found that very interesting and will continue to monitor the situation closely.

This trip was designed to be short and action packed. I didn’t get to carry out my usual ‘Zim trip’ routine. I have a rather strange routine whenever I come home. For example I visit various supermarkets across Harare comparing prices in my attempt to gauge how the ‘common person’ is living. I talk to staff at work to establish how they’re finding things in real terms. I always ask them how often to go home to the village for instance and of course how their families are doing in general. In my head, the frequency tells me a lot about the financial situation in their own homes. The feedback from the staff indicates that so far so good, although work still needs to be done. More thoughts to share and document on this.

On the face of it, some products in the shops are competitively priced as companies jostle for market share amongst other things. What I could tell from a mile away was that companies are now making strides in running and managing sustainable businesses whilst accepting that the extremely high margin days are long gone now. The market is flooded with various products and locally based companies have to compete with imported products from South Africa et al.

There is much to say this time around and over the next few days or weeks I will share and document my thoughts accordingly.

Travelled safely…lots of news to share shortly. Meeting and talking to various people – particularly those in business. The reality in Zimbabwe is quite interesting from the inside out….expect a scribe shortly.