eBusiness Weekly
Elias Pacheso
Following the extension of the lockdown period by a further 14 days which ends this Sunday the 3rd of May 2020, bringing the number of days that country has been under lockdown to 45, many questions are being asked on the effectiveness of the measures and its impact on the economy. During the same period the number of Covid-19 cases has risen from just a handful to 40 with 7642 people having been tested.
Without any doubt this has been one of the most difficult periods for the Zimbabwean economy which turned 40 this month.
On the economy’s calendar, the months of March, April through to September are considered some of the most important months for both the rural and urban economies. This is the time when farmers take their produce to the markets and earn money to take them through another year and prepare for the next farming season.
Traditionally the country records significant economic activity during this time but with the current lockdown and dangers of contracting the Covid-19 virus, farmers are caught between a rock and hard place. Policy makers on the other hand are also caught in an unenviable situation.
Lifting the lockdown and allowing for uninterrupted economic activities might appear to be beneficial in the short term but will prove costly in the long run. Faced with an already dysfunctional health sector, lives will be lost and recovery will be difficult.
What can be done then to prevent a collapse of the economy. Clearly thoughts must be given to new ways of dealing with what is obtaining on the ground with a view to limiting the impact of the disease and its crippling nature on economic activities. No-one expected this lockdown to last this long but indications are that in other countries it has gone beyond 60 days and so it is important for us to prepare for the worst.
Zimbabwe receives close to USD1 billion from tobacco sales and a little over USD100m from cotton sales annually.
Traditionally farmers have delivered to the market and clearly with what is happening the situation is not conducive for such a model to continue and may increase the spread of Covid-19. Logistically it might be better to decentralise marketing and allow delivery and sales to happen within the areas where the commodities are grown. Can this be done quickly? Maybe not but businesses must seriously start thinking about this. Going back in history, this has been historically made possible by the operation of depots for cotton and maize crops. Tobacco remains quite centralised and when sales started this week, the price was 11 percent lower than last year’s at USD4 per kg with 80 bales being brought to the market. Farmers are receiving 50 percent in USD and the balance in ZWL.
Downstream value will be added to the tobacco and cotton before the products are exported to international markets. Going forward companies must re-look at their processes to ensure that risks are minimised.
A lot is riding on the finding of a vaccine or treatment for us to reopen economies worldwide, hence we will continue to see lockdown measures in one way of the other. The sectors that will be hardest hit by this will be the Education, Tourism and Health sectors.
With a vaccine being months away, it is important for policy makers to plan for the worst and where possible introduce guidelines that reduce or minimise transmission risk. The guidelines may include allowing for decentralisation of services. Cotton sales will also begin shortly and traditionally sales are conducted at depots dotted around the country. Such infrastructure can be utilised to market other commodities. The same depots can also be used to distribute inputs to farmers.
Looking ahead for the rest of the year all hope is not lost for the economy, as long as we are able to contain the spread of and impact of the pandemic.
Will we need to adjust to the way we do business? Yes without any doubt. Clearly the pandemic will continue to impact on our economy and business for some time to come and some ways of doing business may never again be the same.
As I highlighted last week new business models will be formed with technology playing a big role. Technology will be at the centre of how we do business and investment in these areas should continue.
