Our economy may be in the doldrums but there’s always opportunity to make money. In fact shrewd investors make money whether the economy is going up or down. So I’d like to look at some of the greatest invest opportunities in Zimbabwe. We’re going to look at industries and the forces that lead to them being so highly rated. The list is not exhaustive but covers the important ones. Also important is the fact that these industries present opportunities for smaller players because of the stage in their development at present.
Urban migration has hit Zimbabwe hard due to economic challenges. It’s easy to forget that it’s the rural economy that has been hit the hardest by contraction in agriculture. As such urban migration became the only option for many. And so we arrive at a time when housing is in short supply. The construction industry while beset by the same challenges as others is in a position to benefit should other factors come to the party. You can hardly go wrong with an investment in housing.
Construction supplies will of course benefit with the need for housing. Perhaps more so than construction business itself. And this happens in more than one way. While there’s a decent demand from new construction, there’s also a hefty push from repairs, maintenance and upgrading of existing structures. And this applies to both residential and commercial property. Conditions in Zimbabwe have seen scenarios where people go as far as South Africa and Botswana to buy construction supplies. When people are willing to go that far there’s opportunity.
The growing urban population and the increased demand for housing mean there’s need to support all these people in all these structures. Energy is a key industry and I believe the most lucrative investment opportunity in Zimbabwe. With a lack of electrification in many new urban settlements and intermittent supply in the electrified areas alternative energy sources are big business. The opportunities in LPG and solar have grown over the last few years. Solar presents the greatest opportunity as it is future compliant; we may not be there yet but we will move away from non-renewable energy by choice or by force.
The importance of energy was also demonstrated by the January shutdown. While the fuel price was neither the root cause nor the greatest factor, it acted as the straw that broke the camels back. And that’s because it’s effect is so pervasive in our lives. Fuel is transport, alternative energy, logistics for goods and input for production.
Waste and recycling
Where there are people there will be waste. And no place does this ring more true than our beloved country. The problem is so big that our president has designated the first Friday of every month a national clean up day. It’s a good initiative but I think we can all agree that we need more than that. And that’s where the opportunity lies. The saying one man’s trash is another man’s treasure has a lot of weight in our country if ideas are put into practice.
Advances in technology mean that waste can be used for many purposes. There are interesting projects out there that turn waste into energy. Such an opportunity would kill two birds with one stone. There are also technology reliant ways of doing this, a gentleman started collecting avocado seeds from trash and grew them. The fact is any business that relies on waste as an input is poised to take great advantage of the fact that we have more of it than we know what to do with.
Food and agriculture
We’ve already spoken about the contraction in the agriculture industry. One of the great effects it brought about is reduction on the supply side which brought prices up. For smaller scale players this presented an opportunity and we’ve seen an uptick in peri-urban farming and the greenhouse boom. It is also lucrative on a large scale of course with the opportunities present by both local and export markets for the right produce. Zimbabwe’s manufacturing is dogged with many challenges that may leave manufacturing nonviable for the foreseeable future. This doesn’t completely rule out processing though as methods like sun drying can still add value to produce. Also noteworthy is the need for meat and related products. Small livestock and poultry will obviously find favor in times like this.
Delivery courier services
We are only at the beginning of this trend but it’s definitely one that will grow in Zimbabwe. While there are traditional courier services, ride hailing services such as Hwindi have embraced the opportunity already and are offering courier services as well. The recent fuel price increase may have increased their costs and resulted in a corresponding price hike for their services but on the other end of the market the consumer was impacted by it too and possibly even worse. With no sign of real increases in incomes the saving and convenience provided by those offering delivery is more evident to the consumer. Those providing courier services are in a good position. It’s not just a fuel price issue of course, it has a lot to do with an increased appreciation for convenience and a market that is less patient with time thanks to technological advances.
The only resource we can never manipulate is time. Of course there’s an endless supply of it but time cannot be stored, expanded or contracted. With the lives of the modern person in this tough economy between the full time job and the side hustle something has to give. People still have to live and as millennial and post millennial age groups start to dominate the majority of income earners demands for domestic services will grow. While in other parts of the world the solution is machinery like a washing machine our climate may make this a difficult task because of the high investment coupled with intermittent utility availability. Many businesses have sprouted offering cleaning and other domestic services on an ad hoc basis. Instead of bearing the costs of employing a domestic worker full time you can opt to pay a daily rate for 3 days a week. Being the agency or intermediary in such a business is a growth market for the future. This extends beyond cleaning and laundry. Selling pre packed meals, transporting children, laundry, running errands and more can be great services which people are willing to pay premium for.
The business world is getting tougher. They will let anyone on the internet these days! There’s more information out there than ever before. There’s a more important element for business though; they are receiving way more information than they have ever had access to. This information means nothing without the ability to manipulate, interpret and utilize the findings. This is where data science comes in. Data science has some incredible applications. I suppose a good illustration would be a small supermarket that uses a computerized till system based on bar-codes. Through analyzing the receipts a store owner could learn that customers often buy bread with milk on Sundays but bread alone for the rest of the week. So perhaps a discount combo based on those? It’s an overly simple example compared to the stuff they are doing with data out there like using store CCTV footage to find out where customers spend the most time in a store. Point is this data needs analysis and manipulation and that’s basically what data scientists do. It’s not a preserve for the STEM gifted. Data will only grow in importance as we progress especially because more and more information is becoming measurable.
Given the data science example above we may as well look at adult education. Our school curriculum has been criticized enough so I won’t go there. Our tertiary education system doesn’t really fair too much better. The inadequacy isn’t limited to Zimbabwean education though. Tablet computers are not even 10 years old yet the devices are simply essential today. Just like with data science these things have come up and are now the center of conversations in business and life. The rate at which technology improves is pretty much going exponential which means we will see improvements come faster and faster. The telephone was invented in 1876, the mobile phone in 1973, the smartphone in 1992 and the modern smartphone in 2007. That’s 97 years, 19 years and 15 years between the developments respectively. I’m sure I speak for many when I say the tools and tasks we have to deal with in the workplace today did not exist when we were in school. For some in the workforce their tertiary education did not include these tools either. So there’s a need to bridge that gap.
The demand for adult education is growing at almost as fast a rate as the methods available to transmit adult learning material. As internet penetration, device capability and network capacities grow together the old classroom and distance learning methods give way to interactive classes via video conferencing or webcasting (broadcasting over the web). This all spells interesting times for the education industry. While this does also open up the country to foreign sources of learning the local context is still a very important part of learning. Therefore one can still carve out a defensible position in the lucrative market.
The investment opportunities I’ve outlined follow a simple principle; be a rising ship in a rising sea. And the forces behind do not show any signs of abating. Of course there are challenges, the whole economy has challenges. Econet (and Cassava) was formed in the worst economic period for Zimbabwe and look how well they have done. In the worst economic period. I recall Strive Masiyiwa recounting on Facebook how Econet bet on what was then an new technology from Israel that is prepaid. These industries provide good opportunity and finding the right approach can transform good to great.