12 January 2013

Zimbabwe: Time Up for Briefcase Businessmen


Harare City Council now wants its chemical suppliers to be more than briefcase businessmen and to have real premises, with a real warehouse to store stock, a real chemistry laboratory to do basic analysis of the chemicals to be supplied and a real chemist supervising this laboratory.

There is nothing exceptional in all this.

What is scary, though, is that obviously chemicals have been supplied for years, perhaps decades, without these obvious and simple requirements.

To give the council its due, all chemicals at one stage were bought from local manufacturers whom the council could trust and who definitely had proper facilities, although there were disputes over the exact chemical formulation of some of the chemicals.

But at least the council could trust the basic label and knew, for example, that is was buying aluminium sulphate not sodium cyanide even if the exact percentage of the sulphate was open to argument.

Open tenders, however, while helping to control costs, have allowed some middlemen to enter the lists and peddle chemicals that they have found more cheaply.

Traditional suppliers have raised the alarm over just what the council might be buying. They argue that if the final middleman price, which must include the wholesale price plus the middleman profit, is below their price then there could be quality problems or the council could be buying chemicals with the active and more expensive ingredients at much lower concentrations.

The new rules should overcome these concerns and allow the council to buy its chemicals as cheaply as possible but still be satisfied that the label is accurate. It will also put in another, and necessary, check that there has been no mistake with the order and that the correct chemical is being delivered.

The second check, the council's own chemical analysis, worked last year when cyanide salts were delivered instead of aluminium sulphate, but any safety expert will tell you that having a safety belt and air bags is better than having just one.

More generally, the council's action may help to change a perception in the Zimbabwean business world. There has been a tendency for some to think they can make money by providing zero services; these are the briefcase businessmen. All they do is add to the costs without adding to the value. There would be nothing particularly wrong in the same local businessman acting as the selling agent for a supplier, so long as the final contract was between the supplier and the user, in this case the city council.

Quite a lot of reputable companies do use commission agents as salesmen, but once the sale is made the normal supply procedures are followed. What is wrong is when this commission agent tries to become a middleman, effectively taking commission from both parties and assuming responsibilities he cannot fulfil.

There are other successful Zimbabwean companies who are resellers, but they make this clear and offer a lot of value to the buyer, in the forms of compliance testing, maintenance, installation, transport or the like.

This is all that Harare City Council is seeking. If a Zimbabwean company is prepared to keep chemicals in stock, even if it does not make them, is prepared to ensure that laid-down quality controls are complied with, and offers other value-added services, then it is welcome to tender and if it wins to supply.

But the briefcase businessman must have no part of these procedures.

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