by Munetsi Madakufamba
Productivity, the theme of this year’s Southern African Development Community (SADC) Annual Consultative Conference (ACC), is crucial in preparing the region for the fierce competition emanating from the globalisation of trade.
SADC Executive Secretary, Kaire Mbuende, told the Botswana Daily News that the emergence of Southern Africa as a major economic player was dependent on its ability to improve and develop a competitive edge because the economies of the region were constantly being exposed to the harsh dictates of both domestic and international markets in a highly competitive world economy.
Mbuende made his remarks during a keynote address to mark the Botswana National Productivity Centre’s (BNPC) 1996 Productivity Week in Gaborone at the beginning of November last year.
The BNPC is an initiative of the government of Botswana to establish a strategy to champion the issue of productivity in the country and was formed after consultation with all the nation’s stakeholders. The centre provides management and consultancy services through workshops and seminars. The aim is to change management’s perspective of doing business, help managers to be good leaders and appreciate the contribution of their employees at all levels. It also seeks to make employees responsible and empower them to make decisions in their areas of operation to raise organizational performance.
At present BNPC is mainly active in the capital, Gaborone. However, BNPC Executive Director Ephraim Setshwaelo assured participants at the same occasion that the centre would spread its wings to cover areas outside the capital.
Botswana is the first country in the region to form a national organisation which is tasked with championing productivity awareness at all levels of industry in the economy. In other countries, productivity awareness campaigns are either isolated in the economy without a clear-cut policy or at the worst, non-existent.
At the regional level, establishment of a SADC Free Trade Area which is set to be consolidated by the protocols on trade, and free movement of goods and people, will promote intra-regional trade and competitiveness among companies.
Along with the dictates of a globalised economy, intra-regional trade will demand that only companies that produce state-of-the-art goods and services, at the lowest possible cost, will survive the fierce competition.
SADC has already embarked on massive rehabilitation and construction of regional infrastructure such as roads, railways, ports and harbours, telecommunications and electricity. The Maputo Development Corridor and the proposed Beira Development Corridor are examples of projects aimed at facilitating the flow of goods and services across borders and beyond.
In addition, the recently established Southern African Power Pool and the evolving regional electricity grid is another major initiative that could enable the region to get its power at competitive rates.
“The inter-connection of member states towards creating an effective regional electricity market allowing non-producers of power to draw on other member states’ surpluses, will over time reduce the cost of power,” said Mbuende at a recent Trade and Investment Summit held in Harare.
He added that increased competition will enable improved allocation of resources both within each country and within the region. Mbuende also said the trade protocol aims at gradually removing tariff and non- tariff barriers over a period of eight years. Market integration gives an advantage to national companies which will be able to produce within an enlarged market of the more than 150 million inhabitants of SADC.
In the case of Botswana and Zambia, for example, the market would be up from 1.4 million and nine million respectively.
In as much as member states must do more to ensure sustained and self-generating economic development, labour unions and other pressure groups must be geared to enhance these efforts. The powerful Congress of South African Trade Unions (COSATU) is a notable example of a civic organization that has shown stiff resistance against government policy reform.
The South African government has been under pressure from COSA TU and the private sector in that country to revoke the proposed easing of customs and other trade laws in line with the aims and objectives of the Cross Border Initiative. This, at the least, frustrates efforts toward enhanced intraregional trade and investment flows.
On the other hand, both the private and public sectors should cooperate in harmonising labour laws in order to reduce the frequency of strikes that rocked the region last year, the worst probably being one in Zimbabwe where health personnel went on a month long stay away. There is need to update labour laws, some of which were wholly inherited from the colonial era, to bring them in line with the new economic order.
It is an open secret that employee motivation, which is a key prerequisite to higher productivity, starts with a good package and ends with conducive working conditions.
However, for a typical firm in the region, the question of competition brought about by liberalised regional trade is critical because its survival depends on how efficient its production process is as well as the ability to produce goods and services that can compete on the basis of price and quality.
“To improve competitiveness, there may be need to look at ways of increasing productivity. Higher productivity ensures proper and optimal utilisation of resources and cost effectiveness of the production process,” says Mbuende.
An economics lecturer with the University of Zimbabwe says productivity hinges on the concept of economies of scale, whereby companies enjoy decreasing unit costs as they produce in bulk for a larger market. But he is quick to warn that this should not be mistaken for mass production which in itself does not guarantee quality.
He says that while it is logical to protect infant industries from the “chilly winds of globalised trade until they can stand on their own”, countries should not waste scarce resources by using unsustainable export incentives and other trade barriers.
SADC, which is currently seeking to improve its productivity, might take note of the experiences of the Americans and Japanese at the turn of the 20th century.
Addressing the 48th Annual Quality Conference in Las Vegas in 1994, Joseph M. Juran, an American professor, said the “driving force of the century of productivity was the movement known as scientific management” launched by the great American engineer and manager, Frederick W. Taylor early in the century.
Taylor’s management system was widely adopted by American companies and Juran says it was probably the major reason that the United States became the world leader in productivity in the 20th century.
However, Juran says this scientific management was soon overtaken by the events of time and later proved inadequate, primarily because of lack of professional societies that coordinated information sharing and dissemination. Juran cites another weakness as too much concentration of the task of quality control on top management without delegating to employees who are directly involved in the production process.
Talyor’s system was superseded by the Japanese Quality Revolution at the end of World War II, drawing lessons from the experiences of the Americans. “This opened the way for Japan to become an economic superpower,” he says adding that American companies lost their share in a market they once dominated for decades.
The culture of high productivity has since spread to other Asian countries, resulting in the emergence of some of the world’s fastest growing economies, now dubbed the Asian Tigers.
The issue of productivity is not a new theme in the southern African region. In 1990, the then Southern
African Development Conference (SADCC) marked its 1Oth anniversary in Lusaka under the theme, “SADCC: The Second Decade -Enterprise, Skills and Productivity”.
This theme was chosen against a background of “low agricultural production and productivity, against high population growth rates; declining levels and low efficiency of investment, with industrial capacity utilization as low as 25 percent in many cases; poor export performance: the debt burden … and serious environmental degradation,” according to the theme document.
But a lot has changed since then. Although more still needs to be done, especially in terms of reducing national debts and speeding up the removal of trade impediments, the new-look SADC has a good deal to be proud of.
Increasing economic growth rates, for example Mozambique’s current rate of about 6 percent, falling inflation and a generally stable political environment are some of many positive factors that now put SADC among the world’s safest investment destinations.
And revisiting productivity as the theme of this year’s ACC should go a long way in consolidating and maximising gains already evident across the SADC economy. (SARDC)
