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Diaspora Matters

Diaspora Matters

Big Corporates Join The Informal Sector for Survival

rori

Zimbabwe has one of the biggest informal sectors on earth and the sector keeps expanding with college graduates, those retrenched and even those formally employed joining the sector mainly for survival purposes.

And for long the sector used to be shunned by big companies as its regarded as filthy, uncouth and a tax evading business sector. For long Economists and policy makers regarded the sector as a sore thump that needed to be destroyed and replaced by formalized businesses.

However faced with economic headwinds over the past months, corporate strategists are taking an interest in the sector and competing with some of the players in the sector especially in the area of groceries. With dwindling disposable incomes in the country, many retail shops are tweaking their business models in a sink or swim reality.

The informal sector has been a preserve for foreigners such as The Congolese and Nigerians especially in downtown but local manufacturers such as Simbisa brands are deep penetrating into the informal sector in search of the scarce greenback.

Of course Simbisa is not new to the informal sector as its Bakers Inn took over bread delivery to tuckshops and even extending to peri-urban areas.

So what has changed in 2023?

Irvines Chickens recently opened a container in Kuwadzana Extension in Harare and has been seen in other areas in the Western Suburbs. Question is who are they targeting? Who are their customers? Well the answer lies in a concept we made popular on the forum—B2E , Business 2 Entrepreneur or in short Make Others Make Money.

Their target market is mainly those interested in making money through selling to others—a model that pushes volumes. And its not only Simbisa hunting for the dollar as other manufacturers are venturing Westwards and in some instances bypassing the usual route of retail behemoths and wholesalers.

Drive trucks and park them in high density for fast cash. Of course this comes with added risks of cash robbery, but high risk—high returns. Well done to Simbisa but increasing competition and crowding out small businesses?

Whatever the verdict you can arrive at—what is apparent is the informal sector could well turn out to be the area of last resort for the corporate sector. Collect cash through Innbucks and essentially become an informal sector bank and then push for more.

It’s the year of trucks being redirected and heading to the ghetto for survival.

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Diaspora Matters

What next after the E-Creator Collapse?

amacre

The trending news in the country is the collapse of E-Creator, a ponzi scheme that has been running for the past 3 months. To some the collapse came as a surprise but to followers of the forum—the ponzi collapsed as expected. The scheme collapsed with an estimated US$2 million of investor funds and adds to the growing list of ponzi schemes landing on our shores and leaving a trail of destruction.

How did the latest scheme hoodwink victims?

It was neatly packaged as an empowerment program and in a country with high unemployment, take up was automatic. The scheme had collapsed in April 2023 in Nigeria after running for a few months and this helps explain why analysts had predicted end of June 2023 as the burial day of the ponzi.

The ponzi had strong backing unlike the previous ones and included the public media giving ample space to the scammers. In a country where public media still enjoys considerable confidence—some were regrettably ensnared by the adverts.

Endorsements from public figures such as Madam Boss added trust weights and It remains to be seen whether there is going to be a public apology from institutions that supported the ponzi.  

Despite warnings, and even a couple of articles on the forum including a shorthand book on awareness-Zimbabweans still forged ahead and invested funds in the hope of fast returns. It’s now all tears as some had invested huge sums of funds with reality now settling in that indeed they had trusted scammers with hard earned dollars.

From MMM, Beven Capital, and now E-Creator—the list keeps extending and it’s a matter of time before another ponzi scheme emerges.

Therefore the question is have Zimbabweans learnt the hard way? Is this the end of ponzi schemes in the country? We don’t think so—there is a huge market for ponzi schemes. Economic conditions will push for the speedy introduction of another ponzi scheme and the next could come as early as November targeting the festive season.

Most of the ponzi schemes are imports—copy and pasted from West Africa or from South Africa. Only a few such as Beven Capital was structured from Zimbabwe.

Just how ponzi masters manage to register companies, open offices, advertise on National TV and Newspapers and then disappear without trace is mind boggling.

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Diaspora Matters

150k Membership Milestone

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Back in 2015 we realised that there were few effective small businesses forums in Zimbabwe and therefore formed this forum with the intention of helping entrepreneurs to access opportunities information as well as linking them up for markets and capital access.

We adopted a Japanese concept called Mirasapo which essentially means the support of future needs of entrepreneurs. Mirasapo is a digital ecosystem which links entrepreneurs across Japan and has a lot of paid experts who are a phone call away for the millions of entrepreneurs in Japan.

Our challenge was on the business model to support entrepreneurs. Classroom support? This would mean support to a few hundreds in a country with more than 5 million entrepreneurs. This is why we opted for the Mirasapo model and it involved the following;

Opening a Facebook Forum and sharing business information as well as helping entrepreneurs to network.

Opening various Whatsapp Forums where members helped to network and using the platform for markets access and resources access.

We linked the Facebook and Whatsapp forums to this website allowing for free flow of information. From Facebook to Whatsapp and vice versa. The website to Whatsapp and Facebook and vice versa. The end result is an active community of entrepreneurs which has reached 150,000 with 81,000 being active on Facebook and 15,000 active on Whatsapp.

The extra benefit of the active members is that most of them are well connected especially on Whatsapp with some attending events such as forum meetings.

Our model has therefore been a success although there is more work required in quality networking.

Some of our forum events in pictures over the past 3 years. There are more on our gallery.

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Diaspora Matters

2023 Ponzi Awareness Handbook

mbivha

It is a matter of weeks before a newspaper headline comes with another story of a collapsed ponzi scheme! But the question would be where were Zimbabweans when other ponzi schemes using the similar methodologies came and collapsed? Interestingly some financial professionals are being caught in the ponzi schemes web. We have updated our Ponzi Schemes Awareness handbook with the hope that it will save a few souls.

We hope to compile a full book by end of year.

2023-Ponzi-Awareness

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Diaspora Matters

Down town Tuckshops Insights

Ama drinks

The unwritten rule is if you start with a capital of $10,000 in January then by December your capital should have grown to $100,000! Disruption in motion-welcome to the world of down town tuckshops that have taken over the wholesaling of groceries in Harare. The groceries are imported from South Africa and find their way to the capital using ‘various means’. A fast money spinning enterprise but only for the experienced and connected.

Getting information about this underground economy is no stroll in the park but fortunately we managed to get inside information from one of our members called Tinashe who has been in the business for the past decade and runs several down town tuckshops in the capital and Chitungwiza.

In the past especially before the Covid-19 pandemic, the sector was dominated by Congolese nationals running tuckshops in down town but after lifting lockdown rules—more locals entered into the fray looking at fast money spinning ventures.

The current business model is the tuckshop owners first get orders of groceries from clients and then link up with buyers in South Africa with funds transferred using a Hawala System of peer money transfers which comes with cheaper charges than the conventional money transfer charges. The contact in South Africa buys groceries and then look for transportation. In the past buses were used but they proved to be expensive and a cheaper alternative was found—use of cross border trucks where drivers charge a small fee.

Goods transferred to Harare and collected before delivery to clients. The mark ups added normally 5% with volumes playing a crucial role in pushing profitability. The tuckshops have also become defacto whole salers for out of town shop owners. Of course this comes at the cost of local production but to those in the sector.

This could also help to explain the decimation of whole sale behemoths in the capital and some of them could possibly have joined the down town tuckshops bandwagon.

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Diaspora Matters

Zimbabwean Invention: Submarine Chute

Submarine

One of the biggest international news is the ongoing search for the missing submersible or submarine which went missing in the Atlantic Ocean near the Titanic accident scene. The submarine was on a tour of the Titanic wreckage and as of to date the submarine is left with 40 hours of oxygen supply.

A massive rescue operation is underway but had been delayed led by the US Coast Guard, Canada and France. We hope they will be able to rescue the submarine crew alive.

Rescue efforts hampered by foggy weather but fortunately the skies are clearing and the first task is to identify the location of the submarine. Other things being equal-this should be an easy process given the deployment of resources that include planes, ships, and drones. However given the expansive nature of the area of search-time could run out before the 40 hour oxygen supplies run out.

The main challenge becomes location of submarines in distress during bad weather conditions. Ideally signals from the submarines could help locate the submarine anchored 3 km below the sea level but it is not as easy hence the headline news coverage.

Proposed Solutions

In addition to existing tech advancement that helps in locating submarines in distress. An addition could be a floating chute or torpedo that shoots up to the surface in order to help rescue missions. A submarine in distress should shoot the chute up the sea water so that it can float on the ocean surface like a parachute. Additions such as fitting the chute with GPS module could help make search planes locate it faster and save lives! Take note that the chute is not for bringing cabin crew to the surface as that needs complicated operations. The chute more of a locator for search teams.

The chute tied to the submarine and is shot with torpedo power to the surface where it will become a floater which is easily viewed from the air with the GPS locator helping in speedy rescues.

Similarly the same innovation could be used on planes so that we will not a repeat of the Malaysian Plane Flight MH 370. The plane which mysteriously disappeared on March 8, 2014 has not been found to date.

Of course the author is from the accountancy profession and therefore no engineering background. Therefore basically an accountant delving into uncharted waters territory of submarines. But who knows–perhaps this could be a great contribution to the safety of cabin crew on submarines as well as curbing the repeat of Flight MH 370

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Diaspora Matters

Buying shoes for resale from Mozambique

shoes

We encourage Zimbabweans to follow the forum for business ideas and the good news is that our members are always willing to share information on opportunities. In this post we cover buying shoes from Mozambique for resale in Zimbabwe, and we cover below experiences from Zbinites.

By Tindo: The business is or used to be profitable but due to many people (very high competition)now doing clothes and shoe business here in Harare or rather Zim and also the high rentals of spaces to sell its no longer that attractive. The business nowadays depends on the street you are and position in the shop your table is and also those who buy in bulk from Maputo suppliers enjoy economies of scale as compared to those with little capital and hence they sell their shoes at very lower prices thereby attracting more or almost every customer there is. You also need to be continuously getting the latest stuff on the market and with little capital hence less sales u won’t really cope. The goods are usually smuggled into the country and there is always this risky of losing your capital if the goods are intercepted.

In short it used to be a very good business or still can be if you have enough cash yekutenderedza and also your marketing skills.

By Tinashe: Did that business for two years between 2011-2013. Then taiva vashoma we would take shoes from Beira and Maputo,maputo yairwadza distance.It was wiser kuvhura bhero ikoko wosarudza than kutenga bhero racho rakadaro. We would charge average of 100-200% mark up. Ndakazozvisiya after prices started to fall takuisa ma50-100% mark up. Major challenge was maforeigners todhurisirwa kudarika veko vana amigo,muroad ukaita munyama unogona kunyura or dzikatevera dzaisvika dzimwe dzashota. Major benefit was waisada capital yakawanda coz we would get some new as low as $5 usd apa dzakanaka. Of late I have realized kuti maMozambicans vacho vakuuya nadzo vega.

By Vale: Its a good business its only need links with people in Mozambique because the shoes comes from Vietnam 🇻🇳 by Chinese you you will need someone on ground in Mozambique.

The shoes are very cheap when you buy them in bulk for example a box of high quality airforces its costs $370 with 30 pairs and if you sell them with $20 you get $230 profit per box.The advantage or new shoes from Mozambique is that you are not restricted to import them from Mozambique to Zim they are different from bales which are not allowed 🚫

Transport cost to and from Mozambique is approximately $50. But to start that business it needs about $600 and above so that you will have a variety of shoes.

By Tindo: Price depends on the quality of the material used to make the shoe and the low quality (cheapest ie ma airforce ema $10,$15 mutown), medium, high end which is next to or almost as good as original(has bar codes which can be traced back to the likes of Nike dot com because the manufacturers are given rights by these companies), these ones you find them being sold from around $50 going up muharare. So the bottom line is u need to identify your market muno muZim and that determines the quality of shoes you will be selling. MumaGhetto medu umu vazhinji havana pressure nequality but as long akapfeka airforce boe(result asina irombe coz everyone can afford kumarunner) then kwoitawo those vasingade zvese zvese.

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Diaspora Matters

The Importance of Free Funds in Zimbabwe

Free funds

There has not been much attention given to the role of free funds in the Zimbabwean Economy. Economists have not paid attention to this critical area perhaps for good reason as there is little public information available and also the fact that they appear as an Index to the National Budgets.

Free funds can be defined as funds parked in the economy for various purposes with no immediate need to liquidate them. Their availability during their tenure helps stimulate economic growth through the multiplier effect. They also boost business and market confidence.

The significant inflow of free funds has a positive influence and if often followed by the inflow into the formal banking systems and we need no other case study than the Government of National Unity period which began in 2009 and ending in 2013.

The million dollar question is where did funds to kick start the economy come from in 2009? Did the economy receive significant bail outs from leading lenders such as IMF and World Bank? Not much came from these leading international lenders.

So who opened the funding valves? The answer lies squarely in the 2009 Budget under the Annex Table (Consolidated Donor Support). The period witnessed a ramp up in Donor Aid funding to Zimbabwe compared to previous years and this persisted throughout the GNU period.

To make it easier for readers, take for instance a leading Donor Agency that approves aid worth $800m to Zimbabwe and if all the funds are transferred to local banks in the first quarter of the year but being used for the next 8 months. The funds automatically become free funds and banks can lend to borrowers for productive use in the economy.

This helps boost business confidence which explains why in 2009 even cash kept at home ended up being channeled into the formal banking system.

Averaging a USD 1 Billion per annum from 2009 to 2022, the roleplayed by free funds cannot be underestimated especially in an economy where lenders have not provided significant loans and bail outs. Apart from Afrexim Bank and more recently, The IMF US$900m SDR Facility-there hasn’t been a significant inflow of funds by external lenders.

Researches and student of Economics therefore need to study the National Budget Annexes from 2009 to date and also review external loans extended to the nation during the same period.

The 2022 National Budget showed a massive slump in the Free Funds and we raised concern on the implications of half the budget or possibly lower than half coming into Zimbabwe’s coffers.

The budget clearly showed Free Funds flight and add other complex matters arising, the nation in a foreign currency squeeze characterised by steep currency rates hikes. To solely point towards Free Funds flight would be incorrect as in 2022 Zimbabwe received a record US$12 Billion in export receipts leaving a positive trade balance of US$300 million according to Take-Profit Organisation.

Although the trade balance has been sliding into negative territory, however the fast depreciation of the local currency in May 2023 is unprecedented. And the slide continues well into June 2023 and showing no signs of stopping. This is what prompted this write up-did the gap of free funds in 2023 precipitate the current volatility?

What is the sensitivity of free funds to the economy?

Should the situation return to normalcy, will free funds have played a critical role?

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Diaspora Matters

Common mistakes that businesses make when engaging with their audience on social media

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Engaging with your audience on social media can be challenging, and there are several common mistakes that businesses make when trying to connect with their audience. Here are some of the most common mistakes to avoid:

Too much self-promotion:
One of the biggest mistakes businesses make on social media is focusing too much on self-promotion. While it’s important to promote your products or services, your social media presence should also provide value to your audience through informative and engaging content.

Ignoring negative feedback:
Ignoring negative feedback or criticism from your audience can be a big mistake. Addressing negative feedback in a respectful and thoughtful manner can help turn a negative situation into a positive one and show that your business values customer feedback.

Posting sporadically:
Inconsistent posting can make it difficult to build a strong following on social media. It’s important to post consistently and at optimal times to ensure that your content reaches your audience.

Failing to respond to comments or messages:
Failing to respond to comments or messages from your audience can make it appear that you don’t value their input or are not interested in engaging with them.

Using too much jargon:
Using too much jargon or industry-specific language can make it difficult for your audience to understand your content. It’s important to use clear and concise language that is accessible to your audience.

By avoiding these common mistakes and focusing on creating valuable, engaging, and consistent content, you can build a strong social media presence and connect with your audience effectively.

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Diaspora Matters

ABC Auctions and the Art of Guerrilla Marketing

ABC

Guerilla marketing is a marketing strategy that involves using unconventional, unexpected, and often low-cost methods to promote a product, service, or brand. The goal of guerilla marketing is to create a buzz, generate interest, and capture the audience’s attention in a creative and unexpected way.

ABC Auctions is a prime example of a local company that has achieved mastery in the art of guerilla marketing. Their marketing campaigns are consistently designed to generate buzz on social media, resulting in high impressions and engagement rates on their Facebook page.

The comments section on their posts never disappoint. It seems like some people earn a living from commenting on social media. 🤓

So, if you’re looking to create a similar buzz around your own social media ads here are some strategies you can employ in your marketing campaigns:

Know your audience:

Guerilla marketing campaigns are most effective when they are targeted to a specific audience. Understand your target audience’s interests, behaviors, and preferences so that you can create a campaign that resonates with them.

Be creative:

The most successful campaigns are those that are unexpected, innovative, and memorable. Come up with unique and creative ideas that will grab people’s attention.

Keep it simple:

A clear and concise message is more likely to be remembered than a complicated one.

Be authentic:

Guerilla marketing campaigns should be authentic, don’t try to be something you’re not.

Remember, a successful guerilla marketing campaign requires creativity, authenticity, and a deep understanding of your target audience.

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