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The opening this week of a new major milling company in Harare with the investor presumably fitting it out with brand new equipment of the latest technologies, will provide a significant boost to a market that can be on the weak side when it comes to competition.

This will be even more vital this year when the millers are expected to import most of the maize they mill, with the El Nino drought meaning that deliveries from the small scale sector will be very low, the deliveries from the reduced commercial harvests being reduced, and the Government’s own demand for maize rising as it ensures that families that were badly hammered by drought have enough food to carry them through to the harvest next year.

Private sector capitalism works very well to keep supplies flowing and prices competitive, but only when there are no monopolies, near monopolies, or quiet arrangements over a game of golf. The Zimbabwean market for most goods is small, even for something so ubiquitous as mealie meal, that competition can be lower than the ideal.

President Mnangagwa, who has been encouraging investment to boost economic growth, job creation, exports and value addition of Zimbabwean raw materials, saw the advantage of increased competition as an additional major benefit when he agreed to preside over the commissioning ceremony of the new large milling factory built by Champions Foods in Tynwald this week.

He has been willing to be present throughout his term of office when a new investment is converted from a paper deal to actual buildings, mines, equipment and factories, making it clear that he sees investors as important and desirable. His presence tends to put a seal of approval on their private sector activities and he clearly enjoys seeing the newly employed workforce and the rise in gross national product. 

He also likes to turn up when a long-standing investor puts in significant extensions or modernises their factory.

He is not playing any favourites in the private sector, rather making it clear that so long as the business world follows the fairly basic rules and regulations, and these are being made ever-clearer and easier to implement, they are a most desirable part of Zimbabwe and the driver of economic growth.

While the Zimbabwe milling industry has a fair number of companies, many of them are on the smaller and medium side and industry tends to be dominated by a small number of very large companies. Despite the growth seen in some medium firms as they move towards the top table, the largest firms are also growing, as they should, so relative proportions tend to remain constant.

So an extra chair on the top table does expand the competition without diminishing the profitability of the firms pushing ahead and doing a sterling job while they grow.

This year we need the extra competition, as the retailers have already noticed and as they cheered a new supplier this week. Retailers tend to be blamed for pricing and supply, although the competition in that sector is so large, a price fixing ring would need to meet in a stadium.

Because of one of the worst droughts on record messed up our rainfall, the Government wants the private sector to import a substantial proportion of its raw maize for processing, which is fair enough as the burden is spread across the economy. The Government can concentrate on ensuring that the vulnerable will not go hungry, which is one of its fundamental functions.

There will be temptations, if past experience is anything to go by. Nothing can be proved but the explanations for some of the sudden shortages do not really add up, and there has been a degree of messing around on pricing, especially in local currency.

Some even gave tuckshops a major boost because they pay in foreign currency in cash and some suppliers preferred to channel product that way, hence the new law to make sure retailers are licensed and pay taxes before they get supplies from wholesalers and manufacturers.

These problems were sorted out, but the Government should not be required to interfere much in the private sector beyond enforcing tax, safety and labour law, while making these fair and simple, and making sure that the products are safe and properly labelled. 

As we move away from over-low levels of competition we should see market forces manage, especially when that competition ensures there is plenty.

There were tendencies, dating back to the controlled economy of the UDI era, for cosy arrangements that maintained market shares, with that even written into the deals oil companies made.

 The private sector now becomes a true engine of growth in production, employment, profits and rising tax receipts when it competes. 

We have already seen the effects of more competitive environments in several sectors since the Second Republic put out the welcome mat for new investment, local and foreign. 

A price war in the soft drinks industry was perhaps the most dramatic of these, but the manufacturers must have picked up on increased volumes even while unit profits dropped, so their businesses actually grew.

But the cooking oil industry has seen a major change, not just in supplying the market fully with expressers watching their pricing, but also in innovation as the companies, especially the newer ones, innovating and using the full range of oil seeds that the farmers are growing rather than relying on just soya bean or mixing everything together in one large tank.

The fact that some of the firms involved are hardly on speaking terms with their competitors must help push production and marketing innovation to new levels.

So having a new supplier of milled products, and one that comes from outside the traditional groups, should, as the President noted, open up the sector to proper competitive forces for the benefit of everyone.