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Thursday, September 24, 2020

The Shut Down of the Evelyn Hone Startup Winery is Nothing but Systemic Racism

...It's an Exhibition of How Systemic Racism In Zambia Works Today

Columns The Shut Down of the Evelyn Hone Startup Winery is Nothing but...

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

32 COMMENTS

  1. No man this is nothing about racism or WTF you want to call it.
    Laws and regulations are there so that we make responsible decisions,. Do you think if a batch of this so called wine was to be tainted these wine would be responsible enough to say, “ndise ti panga sorry it won’t happen again and we’re willing to face the law”, of course not. They would hide from taking that responsibility.
    Illicit alcohols pose a great risk, whatever racial makeup the brewers/distillers are.

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    • Were the brewers doing this knowing it was illegal?
      How did Evelyn Hone College come to host such a Brewery?
      The Lusaka Central Police station is nearby why werent they involved in this operation?
      Given the scale of the operation how was the brew being transported from this place to the customers?
      What other drugs were being produced here?
      Has the DEC been informed about

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  2. Dokowe, you have completely missed the gist and theme of the article. He is not condoning what they produce but rather raising the issue that Blacks need to be supported to gain entry into this lucrative market and that the incumbents got in on the cheap and capital markets would not support these budding entrepreneurs. The entry barrier is to high to check all the boxes.

    As a nation we need to create the space to fund these ideas, with high failure risk. It takes a lot of skills, discipline and organisation for the youths to produce what have produced and there is need for the authorities to realise that this is talent that need to be harnessed. Remember, the car you drive today was at some point illegal and you had to have a person in front of it for you to drive it

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  3. For first time I have agreed with dokowe. How has race come in? I find it hard to believe anyone black zambian would want to prevent you from doing something just because you are black? We are all black so why would we use that as a factor? These disgruntled lazy youths will use any excuse under the sun for their crimes. This is the type of thinking they have adopted from diasporans. This is not in diaspora where you can use the race card whenever you are caught doing something wrong. If you want to experience black on black slaps then continue doing illegal things. The law is there for reason. Just other day the president introduced the youth fund. Why not take advantage of it. Look at your life now claiming black lives matter hahaha ubupuba ba youth. These are upnd cadres ati youth

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  4. For first time I have agreed with dokowe. How has race come in? I find it hard to believe anyone black zambian would want to prevent you from doing something just because you are black? We are all black so why would we use that as a factor? These disgruntled lazy youths will use any excuse under the sun for their crimes. This is the type of thinking they have adopted from diasporans. This is not in diaspora where you can use the race card whenever you are caught doing something wrong. If you want to experience black on black slaps then continue doing illegal things. The law is there for reason. Just other day the president introduced the youth fund. Why not take advantage of it. Look at your life now claiming black lives matter hahaha ubupuba ba youth. These are upnd cadres ati youth…

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  5. I like the tone of this article. It resonates a lot of truth about why we are in this state of affairs as a people and country. Maybe the example is not accurate but it underlines the problems local people are so far behind these foreigners. Some politicians will sing corruption and regime change but this article is thought provoking.

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  6. Munyumba Mutwale just go to that Evelyn Hone College and do a short course in writing. You are so boring yet you have a point. Its a point that may not come across because Zambians aren’t patient with text

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  7. Munyumba Mutwale you are very irresponsible..this is why we have a lot of businesses operating in the black market. Illegal brewery is not only a serious offence most of the time its not only health and safety concern its a fire hazard.

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  8. That is disgusting, worse than in Indian.I
    If those cadres had smartly packaged their wine, yes we could be praising the local industry and PF’s youth empowerment fund.
    Unfortunately, that’s is simply dirty. No cholera iyi bwana pa Evelyn College.

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  9. I always ask how Independent we are as Africans and Zambians in particular. We inherited everything from the oppressor including the laws he crafted against us to keep us in perpetual backwardness. We simply need to interrogate everything we inherited and craft our own path to greatness. Progressive countries have National Institutions to Incubate startup businesses. We don’t! You take your business idea to CEEC, they will plagiarize it and create business using your idea. The writer of the article has hit the nail on the head! Never mind ba “Mwankole” like KZ who think they are rich now because of their corruption, notusungu Sana ati “who are you? Do you know me?” … Kikikiki

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  10. I always ask how Independent we are as Africans and Zambians in particular. We inherited everything from the oppressor including the laws he crafted against us to keep us in perpetual backwardness. We simply need to interrogate everything we inherited and craft our own path to greatness. Progressive countries have National Institutions to Incubate startup businesses. We don’t! You take your business idea to CEEC, they will plagiarize it and create business using your idea. The writer of the article has hit the nail on the head! Never mind ba “Mwankole” like KZ who think they are rich now because of their corruption, notusungu Sana ati “who are you? Do you know me?” … Kikikiki kikikiki

  11. Mwine moshi progressivness cannot be used as an excuse for lawlessness. Even in old traditional African settings they had rules or customs to guide society and ensure order. Stop trying to make Africans sound like disorderly creatures who cannot have order in their society. If you feel so deeply then please go and drink what they have made. I doubt t you would risk your life so why should we risk the country’s life by allowing such. Grow up

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  12. The writer has a point except he dilutes it by making it a racial rather than a class problem.It is said that small producers can not supply food items to chain stores for hygienic reasons.But we know that small quantities can be produced without compromising hygiene.

  13. PF Cadres don’t understand Chizungu or Ichisungu and that is where we have serious communication breakdown with Cadres like KZ!
    Please get the writer correctly! He is in no way trying to justify production in unsanitary conditions. What he rightly highlights is the impediments Zambian startups face in terms of meeting prohibitive regulatory fees and high cost of starting a business. The writer goes on to say why don’t we create an enabling environment for startup businesses? We have seen this is a general problem because Chinese have been caught doing worse but get away with it with support from their embassy! KZ, Use part of that Youth Empowerment Fund to help these guys! They have demonstrated talent!

  14. KZ, give Youth Empowerment Fund to these guys who are production oriented, not be a JK and Malemba Malemba … Kikikiki

  15. Some simplistic people love to blame “the system” for their own misfortunes . How can a free and independent Zambian Govt be called racist against its own people. The laws about food and liquor manufacture are there to protect people from being poisoned by products made in an unclean unsafe and untested way , it is just common sense and actually every country has such legislation

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  16. Deregulation is required at this point when youths are coming up with initiatives. Red tape must be cut down to barest minimum to meet health standards only. Besides give them financial support for their winery factory.

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  17. This article is too long for nothing!! Racism is not a factor here. Wake up and face the reality that licensing of a liquor business is cardinal. Also, the premises are not fit for a liquor processing factory. This writer is amongst those people with tendencies to use all sorts of excuses within the book to try and go around the Law, hoping to find a loophole. Let’s follow regulations and let us support sensible things.

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  18. The economic philosophy of black nationalism is pure & simple. It only means we should control the economy of our community. Why should white people be running all the stores in our community ? Why should white people be running the banks in our community ? Why should our economy be in the hands of the white man ? Why ? If a black man can’t move his store into a white community, tell me why a white man should move his store into a black community ..

    Malcolm X

  19. The economic philosophy of black nationalism is pure and simple. It only means we should control the economy of our community. Why should the white people be running all the stores in our community ? Why should the white people be running the banks of our community ? Why ? If the black man can’t move his store into a white community, tell me why the white man should move his store into a black community…

    Malcolm X

  20. I agree with the writer…….these authorities make and find easy targets if fellow blacks trying to make it….

    These are the local entrepreneurs GRZ should be encouraging with empowerment funds to grow and prosper …….

    not waisting tax payers money on PF call boy thugs …

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  21. I agree with the writer…….these authorities make and find easy targets if fellow blacks trying to make it….

    These are the local entrepreneurs GRZ should be encouraging with empowerment funds to grow and prosper …….

    not waisting tax payers money on PF call boy thugs …

    Any other sensible GRZ which wants local talent would identify that brewery for stewardship and mentorship …..

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  22. “Black people use racism as an excuse for their failures in a lot of things.
    Racism makes us feel like victims and remember that victims never rise.
    The reason we don’t succeed after every war is because of our inability to move forward….
    * We don’t forgive,
    * we keep focusing on the enemy instead of picking up the pieces and building afresh.

    I think the reason the Afrikaaner nation was able to build themselves into a formidable nation was to forget the past and found ways to empower themselves.
    The Afrikaaners were
    * oppressed,
    * confined to concentration camps by the English.

    The Indians where brought here because the black man was too lazy to work in the sugar cane fields. They lived in desperate, poor conditions…..no lights, no running water, no proper housing…

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    • Softstone ubufi!
      Ati “the black man was too lazy to work in the sugar cane fields”. Yet for four centuries he had been taken ten thousand miles away to America just because he could work!
      The Afrikaaners were not oppressed. They were part of the oppressors. The only oppressed people in Africa were black people. When two oppressors meet in your home and start fighting over your property its not time for you to start checking out who is the better oppressor. Then you need to focus on eliminating both. Because they were not oppressed they can afford to forget. Forget what never happened to them. We were oppressed and we wont forget because if we do we will be oppressed again.
      “The reason the Afrikaaner nation was able to build themselves into a formidable nation” was because they…

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  23. @Hard Stone, Sorry to burst your bubble. Please understand the”Context” in which the word “Racism” is applied by the writer. Ninshi mwebambi tamwasambilila Sana?
    Zambia does not have an indigenously derived “Zambians” Constitution. What we have is an “Amended Colonial Constitution” that was handed down to us at Independence. What we have been doing is just amending convenient legislations to suit certain interests or when we want to target an individual. Legislations like the Public Order Act (POA) is a Colonial piece of legislation which was inherently “Anti-Black! Independence was just a shift from White to Black Oppressors using the same weapons! What can be worse than being oppressed by your own kind???

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  24. @devil advocate don’t be a silly hyena. When we try and give you bill 10 you cry and claim it is bad. Now you are claiming that the current constitution is not fit for purpose. What do you guys want? You can’t win an election when you lack integrity and change position on important things just to suit you as a failed party.

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  25. Instead of shirting them down. The Government should advise them to look for an alternative place which can be inspected and approved. After which they can be assisted to register the company and the brand. Instead of demonising them the government should look at the positive side of this venture, which is creativity, job creation and added Tax collection. We should equally be proud our young me can be this innovative.

  26. Instead of shirting them down. The Government should advise them to look for an alternative place which can be inspected and approved. After which they can be assisted to register the company and the brand. Instead of demonising them the government should look at the positive side of this venture, which is creativity, job creation and added Tax collection. We should equally be proud our young me can be this innovative.

  27. What a shallow article from someone who is educated enough to call himself an economist. Do you even know the meaning of systemic racism? How can there be systemic racism in a country whose very systems are run and managed by black Zambians? Take a hard look at that picture. Is that what you want to be drinking, and then call it proudly Zambian? WHo says black Zambians cannot start up professional brewries, no matter how small or large scale. It’s an insult. Have some self respect.

  28. Maybe, just maybe, this could have been a good article if the writer had written it independent of the shut “winnery”. What is wrong with this Mutwake? Can he drink that rubbish produced in such FILTH? My God, and he is a financial economist!!

Comments are closed.

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