Diaspora Matters

A couple of years ago I wrote an article on cabbage production which received rave reviews on this website. My inbox was inundated with emails from many would be fresh produce farmers most who shared some very spectacular ideas on how to run such a project viably. I was fortunate enough to be invited by one of the farmers who took the free advice from that article and utilised it fruitfully. However, todays article is not about this farmer but is about a certain aspect of this farmer which I think every would be or current farmer needs to adopt in order to be successful in farming.

Most of us have turned to agriculture as a way of getting that side hustle extra dollar which I must say does come in handy in this harsh economy. This bracket includes bankers, cooperate executives, etc. the list is inexhaustible. Yes, one may be an expert banker but lack farming expertise. To quote one of my Lectures back at University decades ago, “owning a farm does not make you a farmer”. I am sure most of you will agree with me that you have seen some well-resourced entities running a farming operation into the ground. The major reason being lack of expertise, it is very important for every farming enterprise to have highly skilled employees. Most of you will agree with me that highly skilled labour does not come cheap, this is true even in the field of agriculture. A good point to take on is that as the farm owner make sure that you pay your most valued employees more than you pay yourself. I know some may not agree with this notion but believe me it’s a tried and tested one, “IT WORKS SIMPLE”. A highly skilled and happy (well remunerated) farm manager will be loyal and will put in the extra hours in order to achieve set yield targets which translate to enterprise profits. If you can throw in some bonus extras at the end of the season. Back to our main subject, most of us probably think farming is a simple exercise, of which it is if you know what you are doing coupled with the right skills. Although it may be a good idea for those would be farmers without any farming back ground to take on some short courses in farming as it will give them a good appreciation of the industry, it is still advisable to hire  the right highly skilled individual to take on the task of running the business.

 Recently I had the opportunity of having this discussion with one of the leading agricultural consultancy organisations in South Africa. They were hired by one farmer here in Zimbabwe to consult periodically on their blue berry project at a very huge cost running into thousands of Rands. The point to take on here is that the farmer has invested in the skills of a consultant despite more than 30 years in the business. This investment in skill has seen the farmer growing this high value crop profitably. I know probably the small-scale farmer reading this article is saying where do I get the money to hire consultants from South Africa. Well you do not need to hire one from South Africa if you cannot afford to. The AREX department is always willing to help with advice, they do have some good apples left in their basket who can assist. Another avenue is to hire a local consultant for advice which is way cheaper or simply hire a qualified and highly skilled person to run your enterprise, remember to pay them well.  Farming is an art and a science at the same time requiring skill and expertise which is often acquired over a period of many years. Next time we will look at growing for export and the requirements for exporting agricultural produce from Zimbabwe.

• Emmanuel is a qualified Agronomist with more than a decade’s experience working in the agricultural industry and development sector. You can contact him on edndsep@gmail.com

Article by Emmanuel D.N Dube

ZIBN Agronomy correspondent

A group of people link up and decide to set up a stokvel where they give each other money on a monthly basis. Everything goes on well with each member in the group receiving R5.000 per month from the 5 members in the group.

The last member in the group receives his share of R25.000 at the end of the stokvel cycle and at face value the coast is clear? Well not so clear as everyone in the group knows that he has received R25.000 cash! When more people know that you have cash, the amount, your location and more personal information then you open up yourself to robbery!

This fraud is affecting many members in South Africa and recently it was imported into Zimbabwe. In Marlborough, Harare a group of friends teamed up to contribute funds and share. The money was in hard currency and as soon as the last person in the group received his share of US$7.000, armed robbers pounced on him!

Joining a stokvel or mukando savings club? Make use of formal banking systems…include cash at your own peril. This scheme is bound to affect many unsuspecting members of the public as they use informal saving schemes.

Take measures to participate with people whose backgrounds you know plus reduce risks through formal banking systems use. Banks have the disadvantage of bank charges but protect you from possible losses from robbers from within the group.

Two weeks ago, I accompanied a friend to Mbudzi Roundabout in Harare in order to buy a goat. The place is named after goat sales but of late has more other commercial activities than goat sales. More than 20 buses leave the place headed for Beitbridge every evening. A lot of vendors are also found at the place which recently welcomed a new shopping mall.

We arrived at the centre and witnessed 3 sellers of goats and they had an average 20-50 goats roaming freely at the place. As soon as we indicated that we indicated that we were looking for goats, 2 guys came to assist and provided us with this informatio;

1. Demand for goats is very high with monthly average sales of 50.
2. Prices range from US$20-$40 per goat.
3. Supplies from rural areas low as farmers resist the local currency.
4. There is an unofficial abattoir where clients can buy goats with the goats slaughtered and prepared for transport. This activity costs RTGS$15-20.
5. During the 30 minutes we were there, we witnessed 5 goats being purchased.

We did not have a scale to weight the biggest goat that we purchased for US$35 but we estimated its weight to be between 15-20 kilograms…not bad in an economy where beef is costing around RTGS$15 per kg.

Opportunities

The way goats are marketed has room for improvement. The roadside method at Mbudzi or Tynwald could be improved by introducing proper selling facilities like the Koala Abattoirs along Seke Road. There is also room for ‘goat meat on wheels’ delivering goat meat to clients across the city.

The full demand for goat meat in the city is an unknown figure and so we urge our members to carry out own researches and plug in opportunities gaps.

Do search for one of our articles on hybrid goat farming on this site.

I find the National Geo channel very fascinating…i like the wild and most of the times been looking at big animals such as lions, elephants and buffaloes but rarely the leopard.

Of all the big cats, the leopard is the wisest…hunts alone, an introvert but has a great success rate on hunts. Once it kills prey it must quickly pull it up a tree for safety keeping.

How many of you shout on top of the mountain when you get a big deal? How many even start talking about big contracts before signing them?Once heard 2 guys talking about a half million Command Agriculture deal at OR Tambo Airport! A leopard knows there is stiff competition for resources, once you land a prey quietly pull it up a tree and start feeding lol

Delay and big guns such as lions and hyenas come for their own share.
I like how leopards attack prey whilst flying from trees…unbelievable stuff. Its like lightning….boom and in a split second an impala is gone. So impalas will be resting under a tree, looking for tree shade oblivious of the danger up tree. Impalas and most land animals are wired to look for trouble from the ground…most predators attack from the ground…but the impala uses the ground and from tree tops.

Risk Management Lessons:In your business, are you focusing on risks strictly from the ground or sometimes you are taking a look upwards? The greatest risks are often surprises! When attacking from above, the success rate for leopards is close 100%.

When the going gets tough sometimes the leopard goes for birds…yes birds in trees…unbelievable stuff.
Do you have an agile strategy that adapts to changing economic environment? Study leopards for inspiration. When you want to study about wisdom, forget the lions, forget the cheeter which only relies on one strength…speed….try the leopard.

When it comes to business models;

Lions for boldness,

Cheeter for speed,

The tortoise for slow but sure speed,

Buffaloes and elephants for team work,

The croc for stealth,

The leopard for wisdom,

Which animal or animals does your strategy follow?

I did not even bother to watch the Liverpool vs Barcelona match yesterday. I instead  followed the preparations of the elections in South Africa watching closely the debates and opinion polls. No need to watch a dead rubber-Liverpool was out! Of course I have watched remarkable come backs….plenty of them but there was no way Liverpool was going to overturn the defeat of 3-0! I don’t do soccer betting but surely if someone had said Liverpool was going to win, everyone was going to be against you. Common sense isn’t it? Barca beats you 3-0 and you expect Liverpool to win 4-0? You need your head to be examined!

But this is soccer…they call it the beautiful game and nothing is impossible! Liverpool romped to a 4-0 victory at Anfield in one of the best matches this year…unbelievable stuff.

Entrepreneurship lessons First Leg

You have the first leg as a startup, you have high hopes of profits, you have seen others making money…the field is profitable. You do your meticulous planning, good market research and an award winning business plan. You put your resources together and plunge into the business field. You have the support of family and friends and looking forward to a victory.

Within a few months your world is shattered by events on the ground, silly goals conceded as some employees vanish with inventory or cash. Big clients do not honour obligations, the foreign currency markets swing southwards, inflation throws spanners into your business. The wheels come off and you concede 3-0! But hold on, this is not what you had planned…where are the profits? Dejected, embarrassed, distraught, disappointed- you walk off the pitch with your tail between the legs and throw in the towel. Your nemesis celebrate your fall from grace…you set social media alight with memes of your loss.

Entrepreneurship Lessons Second Leg

You have a tsunami against you. A tsunami, a cyclone, a volcanic eruption plus an earthquake to deal with. You are in the red, no one has trust in you any more…after all you proved it in the first leg that you are a hopeless team-perhaps directionless and many start asking how on earth you even managed to get there in the first place. However you refuse to give up-you go back to the drawing board and restrategise, you analyse your mistakes in the first leg, you look yourself in the mirror and motivate your players. You ooze confidence and rally your supporters to come and support you. You already know the pain of defeat, the embarrassment and the jeers from opponents. Hold on…you have nothing to lose. With chest high, confidence boosted you step in onto the pitch with one objective…perform a Houdini act and ride the tsunami wave, escape the volcanic ash and overturn the first leg defeat.

Dear forumite, you too can perform a ‘Liverpool Miracle’ and yes its possible. Its not an everyday occurrence as more than 90%of entrepreneurs who start encounter losses in the first 6 months and give up. Some do not even analyse what went wrong in the first leg. The shame and pain from the first leg is too much to even try again.

At what stage are you in your business? First leg? Expect a thorough drubbing and its normal-you don’t have the skills and experience….after defeat review what went wrong, get a mentor for motivation, learn from others and confidently enter the pitch again.

Congrats in order to Liverpool fans and wishing you the best in the final.

The image of a Russian plane making an emergency landing and bursting into flames at Moscow’s Sheremetyevo airport was disturbing. The plane on fire returned to the airport and sought the help of fire fighters on the ground but this was not enough as they took time to douse the raging flames that had engulfed the plane. An AirZimbabwe plane from OR Tambo headed for the Robert Mugabe International Airport also experienced technical problems and was forced to return to the airport and witnesses reportedly saw small fire emerging from one of its engines.

What happens when a plane encounters problems especially fire?

The pilot will seek refuge on the ground and as witnessed in Russia, the help may not be enough.

Water runways solution

A passenger plane slid off a runway in the US state of Florida on the 3rd of May , ending up in a river after landing during a thunderstorm. Twenty-one people were taken to hospital with minor injuries.The chartered Boeing 737, operated by Miami Air International, had flown from Guantanamo Bay in Cuba to a military base in the city of Jacksonville.

In January 2019, a US Airways Flight 1549 was an Airbus A320 which, in the climbout after takeoff from New York City’s LaGuardia Airport struck a flock of Canada geese just northeast of the George Washington Bridge and consequently lost all engine power. Unable to reach any airport, pilots Chesley Sullenberger and Jeffrey Skiles glided the plane to a ditching in the Hudson River off Midtown Manhattan. All 155 people aboard were rescued by nearby boats and there were few serious injuries.

Wikipedia has a lot of case studies on water landing which helped reduce the toll of plane crash survivors.

Redesigning Airports?

Our airports can help reduce the number of fatalities of air crashes if they can also have sections of water run ways where planes can be directed to if they are on fire. Its much safer and effective rather than relying on fire fighters who can sometimes take their time to reach planes engulfed by raging fire. The planes in distress are literally fire bombs which can cause serious damage to other planes on the runway plus passengers on the ground.

Your thoughts on this Zimbos?

There are a lot of great entrepreneurship books from Rich Dad Poor Dad, Richest Man in Babylon and Capitalist Nigger just to mention a few. Well researched books that bring new schools of thoughts and perspectives. The missing link however is on local entrepreneurship books. There are few brand names that tackles this important area giving a Zimbabwean perspective.

Our forum has plugged this gap specifically focusing on opportunities available in Zimbabwe and South Africa. We have no interest in tackling what has already been covered by other books…we will be wasting our times and yours too. Instead, we focus on bringing new information not covered elsewhere and our next book is a carry on of what we did in our initial book and that is covering local and regional opportunities and crucially the interviews by Zimbabweans who are based in foreign countries. They are your contacts and point of reference should you consider to do business in foreign soil.

Today we cover one of our forum administrators, Ms Lydiah Chirewa Nyagura who is based in Russia and working as an English Teacher. We cover part of the interview we have included in our 2019 book edition.

How long have you been in Russia?

I have been in Russia twice, first between 2009-2013 and currently from 2017.

What are you doing in Russia?

Iam an English Teacher.

Are there many Zimbabweans there?

There are very few especially those formally employed. A few do exist and are students at local universities especially in science subjects and medicine.

How is the weather and food?

Winters are long and can be extremely cold, with temperatures as low as -40°C, though the average winter temperature is about -20°C. Summer time lasts for about two and half months. Traditional Russian dishes are dishes from veggies and wheat: porridges, dough dishes (bread) and all kinds of soups.

Language Barriers?

Language is a barrier here as most places use Russian as official language but the good news is that they are slowly opening up and this is one of the reasons why iam here-English Teaching!

Your thoughts on studying Russian College Programs?

I do not have sufficient knowledge on this but the language is difficult to study and i would advise prospective students to do thorough studies first.

The cost of living? Choose any 5 products and give us a breakdown.

Milk 2.5 litres=US$0.84

Cooking Oil, 750 ml =US$1.00

2kg Rice =US$0.92

Jack Daniels Whisky =US$20.00

What do you like most about Russia?

I would say the cost of living is very affordable, I live and work in a friendly environment. However it is not easy though to be too far away from home so whenever i get a vacation, i usually head straight home.

The interview continues in our book with a look at business opportunities in Russian which our members can tap into.

When you park your vehicle in the capital city, make sure that you look for EasiPark assistants and pay your ticket. Now what happens if no EasiPark officials are not around? The best strategy is to drive away or if you insist on parking then make sure you collect as much evidence as possible because there is a latest scam whereby the EasiPark officials disappear from the scene only to return when your vehicle is clamped and being required to pay a fine of $57.00.

Easipark has no doubt over stayed its welcome in the city! This practice of hiding away from motorists has become rampant and this is an unsustainable way of raising income by the City Fathers. They should instead focus on raising income by attracting investment in the city, servicing new residential and commercial stands, inviting investors to key areas identified in their strategic plan. Our last forum visit to Cleveland Dam clearly showed massive investment potential for hotels, casinos and leisure centres. The mayor and his team should spend more time attracting huge investments rather than frustrating residents by extorting money from motorists!

Evidence collection

Whenever you park your vehicle in the capital and EasiPark officials are not around. Record video evidence of their absence and submit to the Harare Mayor or the council. Lets build a case for the review of operations of this firm or possibly having their contract terminated. The more Harare motorists bring the evidence, the more solid the case. Motorists should not pay for their inefficiency or scam schemes where their employees hide and facilitate clamping of vehicles by the Harare City Police.

The mayor should be business minded and look at better avenues of raising income for our beautiful capital.

As a small business operator, how do you review your financial operations? Do you prepare profit and loss financial statements, balance sheets and cashflow statements? On the ground what we have seen is few ever bother to maintain their financial records. This makes it difficult to review operations and make strategic decisions of expanding or even scaling down. Most do know the state of their finances which mostly involve how much cash or inventory they hold but when its not systematically recorded, it becomes difficult to review your operations.

One great way to review your operations is through the preparation of management accounts which is defined as;

The process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions.

The Chartered institute of Management Accountants ( CIMA)  also define it as is the procedure of recognizing, gauging, gathering, studying, researching, analyzing and communicating of information utilized by the management to plan, evaluate and control within body and to ensure proper use of and liability for its resources.

Basic Components of Management Accounts

1. Profit and loss accounts
2. Balance sheet
3. Cashflow statement
4. Budget (Integrated into the above financial records with a variance analysis)
5. Risk Management reports
6. Inventory reports
7. Department or operational areas reports
8. Strategy or business plan report

Review procedure

The starting point in your business is the compilation of your business strategy. How do you intent to operate? What are your strategic goals? Expansion? Access to new markets? Acquisition of new equipment and machinery? Most small businesses lack strategic strategies and yet its crucial in guiding you the direction you would like to take.

Your strategy helps inform your budgets-budgeted sales, budgeted expenditure, budgeted growth ( balance sheet) and budgeted cashflows.

When your financial records are prepared, you will be reviewing what has transpired against your budget and taking corrective measures where there are negative variances (for instance if your budgeted sales are R500.000 but you only manage to get R100.000 then this is a cause of concern and you should investigate further on the reasons for such a huge discrepancy and take corrective measures)

Depending on the size of your business, you may need to go line by line in review or simply review major line items.

Management Accounts review also involves the review of risks. In the current environment, you may need to review the impact of forex rates fluctuations on your business. Ignoring this aspect spells doom for your operations. One massive spike in rates can result in your business going under. So you should review this major risk and assessing its impact on revenue, expenditure and operations. Other risks facing your company need to be factored in and reviewed such as tax compliance, environmental regulation compliance, risks of fraud and others.

Inventory reports are one of the lifeline of your business and you need to closely monitor performance in securing products, usage and convenience. You can design them according to your needs and monitoring opportunities and risks in the operating environment. Do you need to make strategic decisions on partnering? Are there anticipated bottlenecks in the supply chain? How do you address them?

For starters, we will not flood you with a lot of information on management accounts but the above are the basics which you should have and reviewing at least once a month.

Benchmarking

We have mentioned the importance of budgets which are aligned to your strategy but budgetary review is mostly internal and in the business world, this Is not enough. You need to review your operations against those of competitors in the industry. If your profit is US$800.000 but others are getting 50 times more then you should ask why and what strategies or business models they are using. What is your market share in the industry? Any disruptive forces in your industry? You align your business to the best practices not only in the country but the region and across the world

The big picture on management accounts

Where is the organisation going in terms of strategy?

What needs to be changed or reviewed?

Where are the opportunities or risks?

Implementing Management Accounting Systems

If you have no business strategy, get one…engage an expert to assist you in the process.

If you have no budget, then create one based on your strategy.

If you have no accountant or bookkeeper, then engage one-student interns can assist you in this regard.

Find an expert who can design your management accounts system and the development is based on industry practice and according to your needs.

In conclusion management accounts helps you review operations and take advantage of opportunities whilst reducing your risk exposure in a fast paced and volatile business landscape. The key word is DECISION MAKING, you would want to make decisions based on accurate, timely and useful information.

In the past, the focus was strictly on financial information but this is no longer enough. In the past the focus was on historical performance but this is grossly inadequate-there is need for past, present and future information inorder to come up with better business decisions.

This is the basic on management accounts and in future we will build up and cover Key Performance Indicators, Balanced Scorecards, Big Data and Block Chain Technology.

Give us feedback, how are you preparing your financial statements and do they give you sufficient information?

Have you ever wondered how the parallel currency rates are determined? Is it purely market forces at play where the price is determined by the demand and supply? Ceteris paribus, this is the case purely market determined rates but deeper analysis shows this is not the case at all. There is market intervention and a few big sharks in the game who determine the parallel market rates.

We posed the question to our forum members and below cover their responses. Who determines the street rates in Zimbabwe?

Responses

Michael Muchena The Old Mutual Implied Rate.

Tonderai Chibanda Always demand and supply. In the Zim context because we import, every bond or whatever ends up looking for forex, therefore because forex is limited commodity willingness to pay at a premium is always there. Imagine two people one who is ill and wants to be treated in Singapore, or SA the other wants to by a car from Japan. Suppose seller has US$5000, those who want the Forex compete to get it. Hence the increase in prices. In RTGS money supply growth has played a crucial part. As money is created and more money goes to seek Forex, the greater it’s availability the more the price of Forex. Too much money, RTGS, chasing too few goods, USD.

Alec Farai Katsere Well said but…. I think forex dealers and cash barons are the ones causing it to happen. Remember in the time of Zim dollar they used to stash the money outside the country and this pushed the RBZ to print new notes.

Tonderai ChibandaAlec my brother, there is no-one who used to stash money outside Zimbabwe, even during the dollar era. A rational economic being will never do that, to what end would be a great question. I think it was propaganda as usual. Zim dollar was trade-able in Zim, the holding of it in an inflationary period was counter-intuitive. The printing of money was dome to finance the deficit we had. Remember the quasi fiscal operations of the RBZ, they were funded by RBZ using the printing money to buy money on the black market. Since companies were operating low, no Forex came to gvt, this is what forced them.

Zivai Mashanga This is the general explanation, but how do we get up one morning with the Rate at 5.5. Who “exactly” determines the rate?

Tonderai Chibanda Zivai my brother, the market determines that, that is why it is called the free hand. They are points of equilibrium that happens. A moving equilibrium albeit in Zimbabwe. It’s not unique to Zimbabwe too, many countries have experienced the same thing. Roadport as an example is an almost perfect market, there is not so much information asymmetry. If big buyers are buying, the general prices are readily known. It’s a willing buyer willing sellers most companies can’t survive without forex. There is noone who determines the rate but that fact that someone comes and offer a better rate and agreement is made and the information spreads across the market is the explanation. Currencies are traded around the world, who determines those rates, I might put a similar question to you?

Brian Matare: Tonderai Chibanda I feel your explanation is exactly what we all believe happens in the parallel market system but um sure almost of us have been down to 4th Street and we know the rate of the day is set… Hence the question by who… A number of times I have been told kuti call back after such such a time.. Bcoz hatisati tapiwa rate… Vanopiwa nani🙄 anenge aripo here achiita analysis kuti nhasi vanhu varikuuya nemarii? Or tine ma bond mangani in rtgs or cash?

Abel Moyo The elite in Zimbabwe control the rates coz when they plan to import a rolls royce they wipe all the usd from the street. They peg whatever rate they want.

TC Jakarasi Markets , what is markets anyway? I dont think you can separate supply and demand from the markets because thats where everything happens, it can be a world market , or our own isolated market where we categorise them as parallel or black market and the interbank , so without supply or demand we cant have a market .

Mdala Wa Rue: Great, who are the players in this market?Do they have equal power? Do we have cartels?

TC JakarasiMdala Wa Rue 1) We got Market Makers/cartels/sharks , these ones got large sums of money and can work in groups or individually to manipulate the price of the day so that they profiteer by liquidating other players who have placed orders already in the market to buy or sell. So if a large amount buys that currency increase in price because their big buying order creates demand and when other player are trying to jump into the market to catch a fast moving price- they sell at high price and the price goes down remember by that time most players will still be buying , especially NEWBIES thats how they manipulate.

TC Jakarasi Mdala Wa Rue 3)Retail players and newbies…… Retailers are in the market as a second option of earning or as their only way of earning either to supplement or make a living out of this market. Some are very experienced some are not but they are honest players. The inexperienced ones are the ones which can be liquidated because of insufficient experience- some of them are greedy and want to get rich quick and lose everything. Newbies are the most affected -they just heard you can make money out of the markets but oblivious that market makers are waiting for them , they dont plan their trades, they can use all their savings to get rich quick as well , they dont understand markets, at the end they lose but the marates dont stop there , other new players will come around as well.

Mdala Wa Rue: TC Jakarasi Great stuff..awesome…i knew it wasnt a simple answer of demand and supply…there has to be a few big sharks who eat small fishes entering the pool and these guys take demand and supply into consideration plus their own profit interests….question solved!

TC Jakarasi Mdala Wa Rue we still have to research this is according to my knowledge it might not be correct to others but I believe it makes sense.

Brian Matare:Mdala Wa Rue it’s a cartel with a king no wonder the new minister failed to decimate the parallel structure u can see signs that he may even be using it to balance his maths.