18 October 2017

Zimbabwe: NRZ Must Be Wary of Populist Trappings


It's heartening to note that Government has finally approved the National Railways of Zimbabwe (NRZ) deal, even though after some worrying hiccups. Had it been allowed to flounder and collapse in the same manner the Ziscosteel-Essar deal fell through, especially after such an elaborate tender process overseen arguably by a blockbuster team consisting of different teams from different Government departments, this would have sent negative signals to investment capitals.

As is often said by investors, capital is a coward. A healthy NRZ, as a key economic enabler, has a positive impact on multiple sectors in the economy. Quite tellingly, an efficient and effective rail transport system, which is ordinarily traditionally cheaper than road, will not only relieve pressure on an already burdened local road transport network, but it will be able to drive down the cost of some raw materials used in industry.

For example, while companies have had to rely, in part, on trucks to wheel coal from Hwange, locomotives can be a cheaper alternative. As has already been shown by the annual national competitiveness reports that are compiled at the behest of the National Economic Consultative Forum (NECF), a local think-tank, Zimbabwe urgently needs to revise its cost of doing business. But perhaps the biggest benefit that is likely to accrue from $400 million investment is the $100 million capital outlay for the refurbishment and modernisation of the central control system, which is essentially the backbone of the national railways. It affords the country the ability to develop its own convenient network for both a thriving passenger and freight service.

In modern major metropolis around the world, the rail network is a major commuter service and as Zimbabwe aspires to similarly remodel its cities, it has to begin to relay the foundations for such. The possibilities are quite endless and they have been explored in acres of space in newspapers before. But we need not be carried away, for NRZ is still a parastatal, it still has old habits that, as is the case with most public entities, is still holding it back. The new deal provides it with an opportunity to reinvent itself anew.

It's high time policy makers bite the bullet and do the right thing. For a renewed NRZ to be efficient and effective, it has to banish old habits and adopt a new organisational structure and culture that is in step with a modern 21st century institution. Though some State-owned enterprises such as TelOne have tried to break with old populist structures that have been affecting both their top line (revenues) and bottom line (profits), they remain shackled by practices and decisions that do not have anything to do with business. As it stands, just like TelOne, NRZ is overstaffed.

Efforts to retrench some of the workers, the majority of whom -- by virtue of having been imposed by some powerful Government officials -- are slothful, inefficient and ineffective, has often been impossible. For example, though under-performing, NRZ currently has 4 700 workers in its books, which is a major anomaly. Anyone who does not have the skills set and competency needed for a modern railway service shouldn't be anyway near NRZ.

It's high time that deserving, competent managers, with proven records run the institution. It's high time for political expediency to be subservient to the economic interests of the State for the benefit of ordinary Zimbabweans. By virtue of its centrality to the Sadc region, Zimbabwe has the opportunity to transform itself into a viable logistics hub and opportunities such as the new NRZ deal should be capitalised on and not squandered. Happily, it's now all falling into place as the legislative review to make laws that are receptive to investment is currently underway. The future, it might seem, if conscientiously managed, looks bright.


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