By Munyumba Mutwale
To Quote 2004 lucid version of Kanye West:
“Racism Still Alive They Just Be Concealing It”
Now let me show you how.
CLEVERLY disguised as Consumer protection, Business regulations, especially in food processing, have actually served as the best tool of systematic economic exclusion of young blacks by creating entry point standard above the means and capacity of most young black people. The Regulators are now serving as plantation police to keep the black masses out of the economy to ensure that freedom of blacks is limited to politics and to a large degree does not support the economic freedom of young black Zambians.
Black startups are the only ones that must start in a mostly scaled-down version with cheap tools of production and makeshift space because black access to financial markets is limited and really excluded. The regulations work by creating costs beyond the means of most young black entrepreneurs and to create long processes that burn through starting cash of any young black startup thus crippling the black startup.
The much-publicized shutdown of the Evelyn Hone Winery yesterday, as mundane as it is, is a prime example of how real modern-day systematic racism works in Zambia to ensure the economic exclusion of Black Zambians [especially Young Black Zambians] form key industries especially Young Black Zambians who suffer from Economic insecurity the most.
Though regulations are often advertised as public/consumer safety tools for the protection of the consumer, what they are in fact are the latest method of systematically excluding and oppressing black people from attaining economic independence and thus leaving them at the mercy of the state, worldwide and especially in Zambia.
In 2018 survey of Manufacturing companies it was found that, while Whites in Zambian and Asians [Majority Indians] in Zambia jointly only make less than 1% of the national population, they own at least 75% of domestic Manufacturing Companies and at least 88% of the 25 Alcoholic Beverage brewing companies in Zambia thus leaving the 99% to fight for a tiny minority stake in the manufacturing industry of Zambia.
How did we get to a point where less than 1% dominates local industries? It’s not done by accident this has been done methodically by a Tripartite Alliance between Government Regulators, Non-Black Business Owners, and Multinationals and Mostly Non-Black Owned financial institutions who all benefit from the poverty of Black people and mostly the Poverty of Young Black Zambians and are effectively incentivized to keep the young black masses poor, excluded and unemployed.
The first thing you need to remember is that of the population of young Zambians, between the ages of 20 – 40, 92% of them are not employed and are forced to survive on handouts or informal and unstable income for a living. This is in comparison with 40% – 50% of Zambians ages 40 and above are full time employed.
So the first blow against the young black Zambian is that of financial exclusions because of mostly unstable income and thusly poor land and homeownership rates Black Zambians for the most part and Young Black Zambians especially cannot access financial facilities especially with the Zambian government crowding them out with their excessive lending. So no income and no access to loans you have a large population of 5 million youths with no ability to accumulate starting capital or loan starting capital.
The only option to ascertain economic freedom is to enter industries with scaled-down, manual versions of production because they cannot afford Factory equipment from China and India which will cost them at least USD5,000 TO USD10,000 just for basic equipment and minimum packing quantities. Now the most extensive method used is Regulations. Regulations such as the Public Safety Act and the Food and Liquor Act which were being used only came into effect in 2011 with less extensive and more loose versions of those acts before.
Most of the 88% Indian-owned and white-owned companies in the alcoholic beverage brewing industry were allowed to start their operations under more relaxed terms allowing them to grow their business with less burdensome startup costs. Once they were established they then had the government proceed to set-up regulations to now act as a barrier to entry against the black masses who would be interested in entering.
The exclusion is not just the financial costs, with such regulations, the Lusaka City Council, Weights and Measures, and Bureau of Standards will basically slow-walk the process so much that most young entrepreneurs will literally run out of cash flow before they get their approval. Regulators are not there to protect the public, they are there to stop blacks from getting rich by starting small and growing. They force a business to start at the established phase. The reality is the best form of consumer protection is perfect competition and that is done through deregulation.
The system is designed to kill off the blacks [especially Young Blacks] and leave the door only for Rich Whites and Rich Indians who either have family savings from the years of business and access to cheaper capital for them since they are the only ones with the assets to back loans and the long-running business relationships with the banks. For the banks, it keeps credit processing cheap and profitable because they are dealing with a few large clients which require less credit screening for much larger loans.
Why does the business community want to keep young blacks financially excluded, very simple cheap labour? If blacks are fighting for a few jobs and cant start business you end up with what we call a slack labour market where there multiples of job seekers for every vacancy.
Any job openly advertised in Zambia receives hundreds of applications giving the employers the power to negotiate salaries down and keep them down threatening employees with an easy replacement should they fight the employer. This system has allowed Indian and White-owned businesses to operate at substantial profit margins while getting the most and even more out of labour.
How does the government benefit from this, the actual benefit in 2 ways? The first is more obvious young unemployed people means an excess supply of political cadres who can do their political bidding at very cheap rates and thus keep them in power. If young people want access to any form for empowerment their only option is the ruling party and thus Cadres system is kept alive. Secondly The government benefits from easy management of voters who don’t question most of the Laws passed.
The 1800s Civil rights activist Booker T Washington stated that if you want black people to cautiously and responsibly exercise their voting rights then make them rich and that is because a rich or middle-class voter, votes concerned about the impact of laws and not the intent of laws. They care about tax impacts, regulations, codes, fees and all sorts of Government revenue mechanism. So if you as the government want to increase your power without any questions asked, keep the black masses poor.
Now in order to not make it overtly racist, they try to make sure that, the city council officials that are sent are black, even though the greatest beneficiaries are white and Indians. Secondly, they have kept a few industries for black people, clothing stitching at the market, joinery and wood processing, while keeping blacks out of the major high-profit industries, similar to how they have kept black people at peasant farming [survivng on FISP never getting off it], Kantemba owners, Cab-drivers and bus drivers, Garbage handlers rather than Minners.
All this is successfully done through a string of regulations that make it so expensive and so difficult for black Zambians to start businesses in good industries and making them scraping for very few low paying jobs.
56 years ago you were given political independence, with no intention to ever give you economic independence because everyone knew that a country of middle-class black Zambians would be difficult to control and profit off of.
Systematic racism is not Street names and white oppressors its making sure that systems of laws and regulations are applied to blacks to make it impossible for black Zambians and especially young black Zambians to be anything but slaves and victims living off handouts from the state.
Here is the sad reality, there were some young black kids who saw a nation that wasn’t going to hire them so they innovated with the little they and what did we do … instead of applauding them, we punished them. There was no difference between how these men started and how Max Hyndrieche started Chibuku production in the 1950s. It’s just that in the 1950s white governments didn’t actively work to shut down their entrepreneurs.
The Author is a Financial Economist with over 10 years of experience in the Zambian Financial and Capital Markets in and with companies and institutions such as the Lusaka Securities Exchange, Securities and Exchange Commission, Aon Zambia and many other participants. He is also a freelance economic journalist from Lusaka who writes about currency, commodities, macroeconomic policy and markets from the Global and Domestic Perspectives.
He can be found on Twitter @MutwaleM
