HomeBusinessBusiness needs a more supportive and enabling environment

Business needs a more supportive and enabling environment

We seem to be distracted. If not, there is certainly a spell hovering around and within us, gripping us into deafening silence, irrelevance and oblivion. An oligopolistic if not monopolistic breeder is affected by bird flu and temporarily shuts down as a control measure and there is a widespread shortage of eggs, chicks and chicken in the market. Eggs and chicken. Yes. The last time I checked, I witnessed our parents, extended family, neighbours, church colleagues and whole communities involved in poultry farming at various levels. They have done this with their eyes closed. The structure of our poultry industry, where one company supplies approximately 70% of locally consumed chicken is certainly skewed in favour of large firms.

the sunday maverick with GLORia NDORO-MKOMBACHOTO

Recently, I was hosting a Muslim Kenyan doctor who loves eggs. So I rushed to the nearest supermarket in the hood. I asked the manager why there were no eggs on the shelves and he advised me that “we do not buy from mom and pop operations, only the biggies, registered with our procurement office. Our supplier is temporarily closed, so we have nowhere to get eggs.” Really, I remarked? So 37 years after independence, monopoly capital still gets preferential treatment in procurement? After I gave the manager an unsolicited short lecture on Michael Porters’ competitive strategy and industry structure, he smiled at me rather overwhelmed and equally perturbed and said, “orders from the top ma’am, sorry I cannot help you today.” Guess who saved the day? My dear mum, from her local indigenous “road runner” chicken strains that fend for themselves the whole day in her garden!

Recently, the Broadcasting Authority of Zimbabwe (BAZ), stopped Kwese TV from rolling out its operations in Zimbabwe, claiming that it had not complied with the registration requirements. When a government which is the regulator has commercial interests in monopolistic South African found and based DStv, which even in its country of origin is being investigated for anti-competitive behaviour, the situation becomes worrisome, twisted, depraved and untenable.

Last week the Independent Communications Authority of South Africa (Icasa) published its inquiry into TV-based subscription services, to determine the degree of competitive issues in the sector so that they could intervene by imposing new pro-competitive conditions. In addition to subscription-based television broadcasting services such as DStv, other streaming services such as Netflix and Showmax have been included in this inquiry. Icasa has mapped out a six-way strategy on how it intends to end DStv monopoly in SA.
Meanwhile, in Zimbabwe, regarding the abrupt end of the ZBC and GOtv strategic alliance, a pan-African satellite TV service that targeted the low-end market and the recent banning of the Kwese and Dr Dish partnership, there is silence from the Competition and Tariff Commission (CTC) and aggressive gatekeeping from the BAZ.

On the other hand, the technology and telecommunications industries are some of the fastest growing and most innovative in the world. Perhaps, the market entry strategies for both GOtv and Kwese were not well-thought out. In the not-too-distant future, decoders for TV-based subscription services, are going to be a thing of the past, with consumers demanding convenience in accessing these services on the palm of their hands, while paying for the services on a need basis.

The mandate of the CTC according to its FAQ response on its website is “to promote and maintain competition in the economy of Zimbabwe through the prevention and control of restrictive practices, regulation of mergers, the prevention and control of monopoly situations and the prohibition of unfair trade practices and protect local industry and promote local industry competitiveness.”

Going back to the poultry sector, it would appear that the low levels of competition within the breeding subsector point to high influence by the breeders over the poultry industry value chain as they are able to levy relatively for day-old chicks. In 2009 and 2010 government suspended all duties to ensure that consumers could access poultry products economically. Given the current situation, a revisit of the situation on the ground would be welcomed.

Most importantly, the structure of most industries within the country need to be revisited with a view to having more organised inter-relations between large, medium-sized and small operators. Since 2010, many organisations including, but not restricted to the Zimbabwe Economic Policy Analysis & Research Unit (Zeparu), SNV, International Labour Organisation (ILO), Technoserve, USAid and many others have conducted comprehensive sector reports utilising the value chain analysis. In almost all the studies, in the cotton to clothing industry, engineering and metals, dairy, poultry, beef and many others, two key issues are evident:

  • Inter-company linkages are generally weak. This applies to linkages between the informal and the formal economy and also within the different sizes of firms within the formal economy. Many companies are barely integrated into value chains, and existing chains tend to be short. Inter-company specialisation in local clusters is limited or virtually non-existent. What is rife in Zimbabwe is that existing networks of established male and pale business communities exclude indigenous African companies.

But for meaningful inter-company linkages to happen, there has to be adequate readiness and preparedness in terms of product standards and constant supplies from the currently excluded “mom and pop” operations, small and medium-sized companies and even outfits in the informal sector. That readiness can be achieved by specific interventions from the sector business associations.

  • Unfair trading practices and the presence of large companies operating as monopolies or oligopolies is rife.

As already outlined above, “…prevention and control of monopoly situations and the prohibition of unfair trade practices and protect local industry and promote local industry competitiveness”, is an explicit mandate of the CTC. Industry and commerce would benefit immensely if CTC were to publicise in a quarterly report for example, the interventions they are doing, in what sector and their achievements in specific sectors as a broader outreach to showcase the extent to which they are enabling the business environment.

Gloria Ndoro-Mkombachoto is an entrepreneur and a regional enterprise development consultant. Her experience spans a period of over 25 years. She can be contacted at totemshumba@gmail.com

Recent Posts

Stories you will enjoy

Recommended reading