By Michelle Munatswa
It appears that everyone in Zimbabwe is an entrepreneur. By virtue of the multitudes having one venture or another in bussiness, we are practically a nation of entrepreneurs. So why can we not turn our entrepreneurial might into sustained economic growth? Why can’t we see the emergence of more Strive Masiyiwa-like business people?
The answer to the above two questions lies in asking a third question: When does entrepreneurship not lead to economic growth? Below I have highlighted some factors contributing to a stagnant economy despite our entrepreneurial activities.
I consider exploitative entrepreneurship as any business or venture that profits without regard to the accepted social and cultural norms and the wellbeing of others. For example, Kombi drivers from my beloved Pumula South come to mind. The normal fare to Pumula South is 50cents, but if it is after 10pm the fair doubles to a dollar. Time of day does not really add to their cost but simply presents an opportunity for them to exploit commuters who are desperate to go home. The drivers see an opportunity to make more money at night but there is no production or value added in the said venture. There is no consideration as to fairness or financial impact on the commuters. There is no value addition or production, but simply an unfair transfer of money. We need to guard against ideas that make the individual profit at the expense of the majority. Such ideas breed a culture of greed and do not encourage innovation but rather exploitation. Such ventures rob the working class of potential savings which are important for the functioning of financial institutions.
Exploitative entrepreneurship does not cause economic growth as few benefit (and live extravagant lives) while the majority wallow in poverty. The majority are robbed of purchasing power meaning that industry will not be profitable.
Occasion entrepreneurship (One hit wonder)
Entrepreneurship involves identifying opportunities. In Zimbabwe we have one hit entrepreneurs, who come across opportunities (‘Gap’) and make a quick buck, buy an ex-japan car and are back at the same cashflows as before. This represents the majority of the Zimbabweans, always looking out to hear of where there is a shortage of anything and try seek supply to meet the demand. Such business practices are not sustainable and do not add economic value as one cannot consistently be guaranteed that an opportunity will come their way. The income from once off deals is often not reinvested but is consumed callously. Once off deals are good as long as the individuals understand the need to reinvest the proceeds as opposed to having a consumptive mentality to profit. (Kudya mbewu). For there to be economic growth, there has to be both constant idea generation and also constant production. Once off deals do not bring individual or national sustainable income. Thus, for our ventures to result in economic growth, they have to be sustainable and continuous ventures.
Value creation and hunter gatherer budgeting.
Until recently, Zimbabweans associated term “Hunter gatherer” with the Khoi-san people, but the Honourable Tendai Biti linked the term to our country’s fiscal policy. I would also like to link it to our entrepreneurial approach. Our entrepreneurs can only invest what they have gathered. Our people have very little disposable income and consequently very little investment income. This means that their business will be limited to buying and selling airtime in the streets or other small ventures. Even though this feeds families, it does not create additional employment as most of the ventures are one man part-time shows. Our entrepreneurial activities are under capitalised and under- funded. Our “hunter gatherer”/cash budgeting approach to development limits the amount of capital available for people to invest in enterprise. Entrepreneurial activities in Zimbabwe have not led to economic growth because many are of the ventures are very small scale and only allow the entrepreneur to feed the family on a monthly basis as opposed to growing industry and trade. There is little or no pooling of resources to enable business growth.
Lack of government support to entrepreneurship
The government is responsible for shaping economic policy and creating an enabling environment for all enterprise to flourish. No clear policy direction has been established. This causes people to shy away from investing in enterprise. One can sight the small scale farmers who were given land as entrepreneurs and the move as a beacon of government involvement in entrepreneurship. However, my contention is that even the small scale farmers have received inadequate support to the extent that they have only been able to produce enough to feed their families and not the nation of Zimbabwe. Until government accepts an increased role in supporting entrepreneurs and creating an enabling environment for the growth of business, our ideas shall always remain barren and our bellies shall forever become empty. Government support should also be conditional and transparent. Government support should not only be financial but it should also be technical. Government policy should be friendly to business.