As Finance Minister Mthuli Ncube flanked by his colleagues in the Finance Ministry announced this new fund to support startups and SMEs I couldn’t help but get the feeling that perhaps it’s time the government listened to what startups and SMEs have been saying; please just get out of the way. Though details were sketchy as we have become accustomed to, the Finance minister did say the goal was for the find to be Private Public Partnership with the private sector expected to also chip into the fund. Given the history of such funds in Zimbabwe and the recent history of the business environment, many feel that the government should perhaps just get out of the way and let businesses be.
While funding is one of those factors that many entrepreneurs and small business owners cite as a need for their businesses the reality of the matter is that save some capital intensive businesses many do not have huge funding requirements. Of course, funding is not only required but important. However, the government should be seized with delivering what small businesses require most; a viable operating environment.
We are being governed by Statutory Instruments (246 in 2019) that quickly usher in ill-thought-out rules and regulations which harm the prospects of many small businesses. The way our custodians behave when it comes to legislation is just as likely to take away your business advantage as it is to give you funding and immediately wipe away the viability of ideas.
At a time.when the greatest needs of small businesses are a stable currency, stable operating environment, affordable communication and sound business infrastructure to supply critical factor inputs like electricity constantly the government has chosen to ignore all the above and focus on giving funding. Perhaps it’s time the government considers just getting out of the way of businesses.
A look at the world over the last 20 years will show you that the most successful startups and small businesses come large businesses have not done so on the back of government programs. The private sector has ideas they are ready to implement but the environment will determine viability and we just don’t have the environment to encourage the ideas we have.
However, our government seems to have a policy of doing that which is not required at the expense of that which is sorely needed. We need better infrastructure, in some cases we just need infrastructure. Business costs are high because of poor infrastructure. Where infrastructure is not the problem taxes and regulations are. The environment punishes those who try to execute their ideas and further punishes those who do well enough to formalise their ideas.
In conversation, someone mentioned that Ecocash enjoyed market dominance because Net One and Telecel being in the control of government took too long to make decisions due to bureaucracy. However, an honest look will tell you that Net One had a head start on Ecocash in mobile money, failed, restarted after Ecocash had shown them how to succeed in mobile money and still failed. The problem is not merely how long they take to make decisions.
The best analogy for our business environment is a road that is in a poor state. It has potholes and most of the tar has been washed away. Our road needs urgent attention to allow traffic to move cost-effectively and efficiently on it. And we choose to change the name of the road to address these concerns.