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UNILEVER’S decision to increase production in Zimbabwe and upgrade its factories here with new investments in equipment is welcome and a return to the business model that has done so much to make the company a global giant.

Part of the reason for the resumption of manufacturing and packaging might well be the introduction of priorities in allocating foreign currency, where it is much easier to import raw materials for a factory in Zimbabwe than to import fully made-up consumer products from outside.

But that could be done with far less investment. The fact that Unilever is investing in modernising factories suggests that the company sees a longer-term future in Zimbabwe and that the original downsizing of Zimbabwean operations was more a problem of investing in the exceptionally unstable economic climate of the early 2000s than a decision to dump the country.

In some ways Unilever is an atypical global giant. It was formed by the amalgamation of a Dutch and a British company at the start of the Great Depression of the 1930s. The two colonial empires might have been protected markets, but there was no guarantee over which metropolitan companies would enjoy those markets.

Unilever won a lot of races and markets by a conscious decision to manufacture in these markets, a reason why in the post-colonial era the majority of its business is in the developing world. It treats its markets as sources as well as customers. Other multinationals should start thinking the same way.

Even when local production is little more than packaging there are advantages operating in the local market. Quite a bit of packaging can be bought from other local manufacturers, jobs are created and presumably costs can be cut, especially in labour intensive processes or in those areas where raw materials or other inputs can be procured locally.

What is important for long-term development is to ensure that the decision by any transnational concern to manufacture in Zimbabwe is based on economic fundamentals rather than the sort of short-term advantages that can be created in a highly protected market, such as Zimbabwe inherited at independence from an illegal regime under sanctions.

Much of the industry that was lost in the 2000s crisis was lost because it never was really viable in the first place.

Much of the industry that has re-opened or been created since that crisis has been viable because it is based on rational, long-term economic models where it becomes the sensible thing to do to invest in a Zimbabwean factory.

Of course Zimbabwe must make it as easy as possible for an industrial investor to start up or expand operations. But the Government has been making significant progress in this area in recent years. And when a substantial global company responds, that is a vote of confidence in that we are probably moving in the right direction.

We would imagine that with modern communications and transport networks and a growing environment of free-trade areas, that national, regional and global manufacturers might well want factories in some countries to specialise more. For example it might make sense in Southern Africa to make product A in Zimbabwe, product B in Zambia and product C in Mozambique and supply all markets in all three countries with the full range.

This should not be a problem and even national accounts will balance with the exports equalling the imports and so ensuring that all markets are actually viable.