Establishing an Industrial Base in Africa

The African economy has started to grow on a sustained basis at levels we have not seen since the tidal wave of independence began 55 years ago in Ghana. In 2012 the IMF has estimated African growth at 5,1 per cent overall and a number of States now experience growth of a similar order of magnitude to those that transformed the Asian Tigers into the industrial and commercial hubs that they are today.

60 years ago, South Korea was where Zimbabwe is today, similarly Singapore. Out of the ashes of war, the Vietnamese are building yet another Asian Tiger to terrorize the rest of us. I have a shareholding in a factory that makes a certain product - the Koreans are offering our clients the same product at less than our cost of raw materials. How on earth do we compete?
This is not a question unique to Zimbabwe; it confronts virtually every African State. Even in South Africa, their most advanced industries are struggling to compete.

Part of the answer is that we have got to think outside the box and we have to go back to basics. There is no room in this game for sentimentality or nationalistic protective fence building. We live in a globalised world and have no option but to face the reality that the old ways no longer work. To me there seems to be certain fundamentals:

- We must have an education system that produces innovators; young people who can think for themselves and have a clear grasp of the issues. The new world is no place for semi illiterates and innumerateís.
- Our people must be prepared to work hard, to work intelligently and to exercise integrity at the work place.
- We must learn to work together as a team. The jungle of global industrial warfare is no place for singles - they get picked off one by one.
- We must recognize that we have to work within a system where each component is essential to the success or failure of the whole.
- We must have freedom and sovereign control of our people and resources - freedom of choice in a market environment is a fundamental, if harsh, condition.

Obviously the above list is not exhaustive, there are many other issues, but I think these are fundamental to success in this new form of global warfare. In Zimbabwe, before the collapse in 2008, we had perhaps the second most diverse and significant industrial economy in this part of the world. About 90 per cent of what you saw in a supermarket came from local industry. A Zimbabwean could buy a home, fit it out and equip it with furniture and 'white goods', clothe and feed his family without recourse to a single product that was not Zimbabwean in origin - perhaps the TV and the family PC might have come from elsewhere.

Not any more, the whole system collapsed when the local currency was destroyed and all cash assets and savings wiped out. When we tried to put things back together again we found that the adoption of the US dollar as our primary means of exchange had not only brought sanity back to our financial markets, but had destroyed the protective shield that exchange control had given to local industry for many years. It also brought home to every Zimbabwean the fact that they were basically penniless - our cash reserves had been destroyed.

So we have found ourselves operating in a globalised economy with no exchange control, no price control and no money to invest or reequip our companies. In consequence we have become a vast open market for imported goods of every description and our established industries have simply wilted and died, short of money, capital, using outdated technologies and equipment and facing intense global competition at very low prices.

Our consumers like the choice. Inflation is down to near zero and our economy is bouncing back - exports have tripled in three years and GDP is two and half times greater than it was in 2008. Our industrial economy, especially that which is concerned with the production of consumer goods, has continued to slide into extinction. Desperate efforts are being made to halt the decline, import duties have been increased and special funds to 'rescue' key companies are being put together.

The task ahead of us is daunting and for a start we have to rebuild our education. In the past, even though the system was small, it was of a high standard and today the list of Zimbabweans who are at the top of the South African economy is like a whoís who in that country. Our trained people have a reputation across the globe for hard work, intelligence and initiative. Itís not an accident - our private schools are the best on the African continent and totally globally competitive. But our State system is in a shambles; lousy infrastructure, poorly paid and motivated teachers and heads. Our Universities, colleges and technical colleges are in a similar state and cannot recover until we are able, from our own resources to fund them properly.

Our people are hard working and innovative and generally honest, but we make lousy team players. It is here where we have to start to lay the foundations for creating a modern, competitive industrial and commercial economy. We must all work to create an infrastructure for education, health and social services that will deliver a sustained flow of well educated and rounded young people with healthy bodies and an innovative and enterprising spirit. The spirit that says 'we can do anything we put our minds to'.

We must build our energy systems to enable us to provide cheap, clean energy in abundance to all who can use it productively. Our network of hydro stations show the way - Kariba, Kafue, Cahora Bassa, all delivering cheap, clean power to the regional economy. Our future potential is massive and it will take vision and hard work to bring these projects into play.

We must rebuild our railway and road systems. Especially rail. This is a third of the cost of road haulage and not nearly so expensive or costly to build and maintain. Our system has hardly grown over the past 100 years when my ancestors were carving their way through the bush, laying rail at a kilometer a day and spanning the rivers with bridges that were to become world famous. Our rail system is derelict - carrying 10 per cent of its designed capacity. Unless we can get our products to the sea in cost effective and efficient ways and then create harbors to handle the volume of traffic, there is no future.

We must put our airlines back on their feet - Air Zimbabwe has collapsed and its long proud history as a regional carrier is finished. We did it before, we can do it again, but it takes discipline, money and good management. We cannot talk about a tourist industry until that whole infrastructure is in place - try to hire a car here, use an ATM, buy a ticket on line, catch a bus or aircraft on time and be delivered to your destination safely and on time. Is that so difficult? Can the Chinese or the Indians do that for us? No, these are the opportunities that are ours and will provide the early returns from our recovery.

We must get our agriculture back on its feet - surely we can feed ourselves and on a competitive basis. We did it before, we can do it again. Our industry needs to look for those opportunities that are available using our own resources or servicing the needs of local industries. We need to back our champions instead of hassling them - Strive has become the leading African ICT operator in Africa - but he lives in South Africa because we drove him out of the country.

But it must start with us - all of us, believing in ourselves and adopting an 'I can do it' approach. There is no secret recipe for success in this new world order, itís always been that way and all we have to do is to rediscover the things that made our economy work in the past and put them to work for us in the future.

Eddie Cross
Harare 22nd January 2012