By Edmore Ndudzo

THERE is an old English adage: Customer is king, which has sadly been turned on its head in Zimbabwe.

The wise rationale or logic behind that saying was that a company, business concern, individual sellers or providers of goods or services who treated or feted their customers with respect and dignity befitting that accorded to kings was likely to earn goodwill in return. These customers would then exercise almost unquestioning brand loyalty to the goods or services provided.

In the very broad sense the word ‘customers’ refers to clients, as they are referred to in professional circles. 

Such brand loyalty would then guarantee the company or other entities a ready market for its products and services.

Of course, such other issues of quality of the product or produce, the nature and composition of the goods or product concerned, the standard of service provided and particularly, in the case of professional services being offered, the strict observance, practice and adherence to professional ethics, standards or practices, and continuing professional education and updating on/ of same; all holistically then play a virtual and crucial role, which then facilitates and ensures such a company or other persons grow and prosper, going forward.

Some cases in point are; international brands, such as soft drink brand, Coca Cola which originated from the city of Atlanta, Georgia, US, or American film-maker, Universal, which have survived over 100 years.

Locally, that is in Zimbabwe, the Institute of Chartered Accountants, of which I am a member, last year (2018) celebrated its centurion, made possible, in no small way, by the very fact that it holds the interests of its clients sacrosanct.

What has been happening in Zimbabwe of late, however, is most unfortunate, deplorable and sickening, all rolled into one.

During this particular period, customers have been, and are being, abused left, right and centre. 

Such cases and instances of abuse come in various ways and forms.

In this piece, I will focus on a few of these.

The most prevalent form of abuse of customers comes in the form of blatant and obvious overcharging for goods and services.

The unacceptable, confusing and unwarranted issue most prevalent these days is multi-pricing for the same good or service, depending on the mode of payment used.

Historically, coming up with the selling prices of goods and services starts on the basis of the total or amount of costs involved in the production and provision of the concerned goods or services.

This has often involved the total cost package; that is both direct and indirect costs, plus a share of some of the relevant overheads, to which was then added a reasonable margin (profit); meant to ensure both the sustenance of the business and a fair and certain return to the business owners, the shareholders.

In recent times, however, the interests or the returns or benefits to other stakeholders have been assuming an ever increasing and greater importance and prominence.

The pricing model assumed by most businesses in the country was clearly articulated by the late economist Erick Bloch, who was a chartered accountant by profession, in 2007:

“Since the beginning of February 2007, much of commerce and industry has been pursuing their operations in a manner that can only hasten, the Zimbabwe economic collapse.

The captains of businesses are apparently now driven to pursue self-destruction or, in other words, to commit hara-kiri, but to do so with the same philosophy as suicide bombers; being to destroy not only themselves, but also all others i.e. the even great number of industrialists, wholesalers and retailers.

Having abandoned the traditional approach of determining selling prices, by aggregating direct costs of goods produced, the proportion of operational costs as attributable to the sale of such goods and other such overheads, and the desired profit margin.

Instead, they have now resorted to calculations of selling prices, based on the anticipated replacement costs, plus a forecast, inflation adjusted profit margin.

Such survival strategies, unfortunately, rested on guessing and predicting what inflation should be or would be next year and the year after.

All, or most, predicted skyrocketing inflation, with none calculating or predicting it going downwards.

This has the effect of the majority  of the so-called captains of business calculating future inflation upwards and only upwards; thereby merely creating a situation of self-fulfilling prophecy and thus made these businesspeople act, in unison with all their colleagues and all the other saboteurs.” 

This model of pricing cited by Bloch assumed some degree or level of sophistication on the part of the captains of industry involved in the practice. 

However, even more simplistic but rudimentary determining of selling prices, particularly of imported goods, were being applied by ordinary crossboarder traders to the detriment of their customers.

Such common practices involved the computation of the selling price of the imported item by simply multiplying the foreign price (in SA rands for instance) of the item by a factor of at least three, then converting back to the local currency equivalent at the then prevailing black market exchange rate so as to determine the selling price to be charged to the customer.

Such a selling price would invariably be sufficient to cover the replacement cost of the item in rands, the duties and other import charges or taxes paid, if any (for most such items were  being smuggled into the country) and all other overhead costs involved. All these costs incurred (including also bribing customs officials at the border entry points) still left the seller or importer concerned with super profits; all this  at the expense and to the prejudice and detriment of the customer.

Edmore Ndudzo Ca(Z), FCA(Z),CPA(Z), RPAA(Z), IOD(Z), BAcc and SAAA. First black city treasurer of the City of Harare. Lead consultant in the crafting and compilation of the Public Finance Management Act of Zimbabwe (2009).