eBusiness Weekly
Covid-19 has already seriously disrupted large swathes of the global economy, and Zimbabwe has not been spared, but in many sectors the damage is not as bad as many might expect.
Some industries are doing well. Telecommunications will grow, as people drop face-to-face meetings. And this is the whole gamut of telecommunications, from the mobile and even fix-line services all the way through those who sell data bundles for air and cable connections.
In the business world video-conferencing has moved from the hip and “something we should really try” to the new standard. Families and friends are switching fast to not just social media and voice over internet protocol but to the video links, using far more data. All this was already there, it is just being used more.
Banking and financial services also will be accelerating their progress to their dream, no human to human contact. Mobile, digital and online banking now dominate Zimbabwean transactions and the final end of the cash era must be fast approaching.
But banks still demand some face-to-face meetings for non-transactional matters, such as arranging loans and the like, and still demand even established customers have to submit physical forms with a physical signature.
Their opportunities for moving totally digital are still there, but that will require giving customers more power and more data online.
Manufacturing will have a variable ride through the epidemic. And one of the major problems industrialists will face is the regular import of raw materials.
Although cargo is exempt from border closures there are still global supply chains that have developed bottlenecks and air transport for the high value and critical items has been very severely cut back. Try getting a quick spare by DHL.
The food sectors will obviously be given high priority and there has been no suggestion that globally, regionally or nationally that supply chains will be disrupted.
And demand neither grows nor declines in an epidemic. But the epidemic does highlight the over-reliance we place on imports.
One sector that should see rapid rise in demand is that for cleaning materials, soaps and the like, including disinfectants.
Unfortunately this sector is almost totally reliant on imported raw materials, and while it can probably keep its normal supplies coming in, since cargoes are already in transit, there might well be serious difficulty in increasing volumes since Zimbabweans will be competing with everyone else for raw materials and it is not that easy to ramp up production of these.
In some areas, such as those “sanitisers” appearing everywhere, the time might well be coming when new formulas using local raw materials might be required.
After all the primary ingredient is alcohol, which we do make, plus substances to make this undrinkable, and so untaxable, and the range of possibilities should include something grown or produced in Zimbabwe.
Oddly enough, a far higher local content in some of these products can be found in the village substitutes being made in the informal sector. Perhaps this is the time for local firms to examine these, work out how formulas can be improved, and then go for it.
Retailers, given a constant supply of local products, should not see major changes, although those involved in the luxury trade might be hit harder because of their supply lines. A lot will depend on how lock-downs in other lands will affect us, since luxury products and even things like laptops might not be counted as essential industries.
The tourist trade is almost dead, and will be severely affected around the world. People have now stopped travelling for pleasure and even if they want to they will find travel restrictions make these journeys impossible.
The associated hospitality industry will be less damaged in Zimbabwe, at least in its mass market areas, although event management and special-event catering will be hit.
Even restaurants will see drops and bars, nightclubs and the like have been closed. But fast food might hold up, and the suspensions of seating arrangements should not be a big deal since most customers in this sector brought to take away and now, if they want to eat immediately, can sit in a car.
Most businesses have taken steps to minimise damage to their financial accounts. Sending large groups on leave at least removes all those provisions for leave, but cashflows could well be a problem.
There has been talk about a lockdown in Zimbabwe. So far this talk does not include the Government, and at the moment a lockdown would cause far more problems than it could solve with only three confirmed cases. For a start three quarters of households are reliant on the informal sector, and there would be real suffering if this was closed for more than a few days.
Lockdowns are not the normal response.
China, the first country hit and the first to be coming out of the pandemic, limited its lockdown to Wuhan, the city where it all began, and the surrounding districts.
The rest of the country did not continue as normal, but managed to without a lockdown although movement, travel, meetings and the like were strictly managed. Most importantly Chinese people and businesses followed the directives. There was disruption but not total disruption.
Zimbabwe could easily avoid a lockdown, but it will need everyone to follow the advice and follow the rules.
If we can avoid infecting each other and if we can minimise the number of people who can infect others, then we can give the lockdown a miss. But it will require near total compliance.
Obviously business sectors have a role to play in this compliance. They need to ensure their own staff and customers understand the importance of minimising both illness and economic disruption, and then put some effort into common action to make sure those outside the formal sector also understand.
Full co-operation by everyone can avoid the lockdown, although we will have to endure the many restrictions now in place. Zimbabweans have a bad record of cheating. When it comes to health we need to stop.
