
THE Competition and Tariff Commission (CTC), a body ostensibly established to promote fair competition and protect consumer interests, appears to be an impediment to Zimbabwe’s broader economic vision. The nation aspires to build a $100 billion economy, yet the Commission’s decisions reflect a parochial mindset, devoid of the strategic foresight required to achieve this ambitious goal. Instead of fostering an environment conducive to economic growth, the Commission’s actions betray a narrow, village-level perspective that undermines national interests.
By Matigari and Brighton Musonza
A Misguided Approach to Competition
One glaring example of the Commission’s counterproductive decisions is its approval of Innscor’s acquisition of competitors, a move that consolidates monopolistic power. Meanwhile, the proposed merger between CBZ, ZB Bank, and First Mutual Holdings (FML) was blocked on ostensibly myopic grounds. This inconsistency raises serious questions about the Commission’s priorities and competence.
The Zimbabwean banking sector is characterized by oligopolistic structures, where competition is nominal at best. Most local banks lack the scale and capacity to drive significant economic transformation. Instead, they operate as small, inefficient entities that pass costs onto consumers. Contrary to the Commission’s apparent belief, having more banks does not necessarily translate to better services or greater competition. In fact, it fragments the market, perpetuating weakness rather than fostering resilience.
Shortfalls in the Current Approach
The Commission’s narrow focus ignores the broader economic benefits of enabling local companies to achieve economies of scale and financial capacity. By blocking mergers such as that of CBZ, ZB Bank, and FML, the CTC hinders the creation of a robust financial institution capable of driving Zimbabwe’s economic growth. Strong local banks are essential for funding large-scale projects, fostering industrialization, and supporting local businesses.
The failure to allow local companies to scale up leaves Zimbabwe vulnerable to external competition. This shortfall not only stifles economic growth but also perpetuates dependence on foreign institutions to fill the gap. Without strong local champions, Zimbabwe cannot compete effectively in regional and global markets.
The Urgent Need for Scale
To achieve regional dominance, Zimbabwe must prioritize building strong, scalable banks. The African market is a battlefield where size and influence determine survival. West African banks, such as Ecobank and Access Bank, have already made significant inroads across the continent. Ecobank, for instance, acquired a local bank in Zimbabwe, while Access Bank has expanded into Botswana, Mozambique, and Tanzania. These institutions are examples of how robust, well-capitalized banks can conquer regional markets.
South African banks, such as Nedbank and Stanbic, have also extended their reach into Zimbabwe, leveraging the strength and strategic vision cultivated in their home countries. These expansions are not accidental but the result of deliberate, forward-thinking policies aimed at regional dominance. In contrast, Zimbabwe remains mired in small-mindedness, failing to empower its financial institutions to compete on a regional scale.
The Role of National Interest
The Commission’s decision to block the CBZ merger is a case study in regulatory myopia. This merger would have been a critical step towards creating a $50 billion banking sector over the next decade, a cornerstone for achieving the broader $100 billion economic target. By stymying this progress, the Commission has acted against national interests.
CBZ must be allowed to grow and be capacitated to evolve into an investment bank capable of capitalizing on significant economic activities within the country. Historically, industrialization in Rhodesia was driven by merchant banks like RAL, which financed large-scale industrial projects and catalyzed economic growth. Zimbabwe needs a similar approach today, with local banks leading the charge in funding transformative economic activities.
Breaking the Spell of Small-Mindedness
What underpins the Commission’s failure to act in the national interest? Is it a lack of vision, sheer incompetence, or a deeper cultural malaise that equates ambition with arrogance? Whatever the cause, the result is the same: a regulatory body that functions as a brake on progress rather than a catalyst for development.
To change this, Zimbabwe’s leadership must instill a culture of big-picture thinking within regulatory institutions. Policymakers and regulators need to adopt a mindset of victors and conquerors, focused on building a nation that can stand toe-to-toe with its regional peers. This requires a paradigm shift, moving away from a reactive approach to one that is proactive and strategic.
Executive Intervention: A Necessary Step
If Zimbabwe is to achieve its economic ambitions, bold leadership is essential. The President, Emmerson Mnangagwa, must exercise executive authority to realign the Competition and Tariff Commission with the national interest. Overriding the Commission’s misguided decisions and instituting reforms to ensure that regulatory bodies are fit for purpose is not just desirable but imperative.
Conclusion
The path to a $100 billion economy requires visionary policies and a regulatory environment that prioritizes national interests over narrow, short-term considerations. The Competition and Tariff Commission must recognize the importance of fostering strong, scalable financial institutions like CBZ to drive industrialization and economic growth. Allowing local companies to achieve economies of scale is not merely beneficial; it is essential for Zimbabwe’s survival and competitiveness in the regional and global arenas.
Zimbabwe’s regulators and policymakers must rise to the occasion, shedding the small-mindedness that has hindered progress for decades. With strategic foresight and decisive leadership, Zimbabwe can position itself as a regional powerhouse, capable of capitalizing on the vast opportunities within Africa. The future of the nation depends on bold action today—action that prioritizes building capacity, fostering competition, and aligning regulatory frameworks with the broader economic vision. Only then can Zimbabwe truly embark on the journey toward sustainable prosperity.