The Economics of Cholera
Agriculture, Strategy

Financial Insight Zambia is saddened by the loss of life and prevailing outbreak of Cholera in our cities. Lusaka by statistics has been hardest hit by the epidemic and questions have arisen from many quarters as to what the solutions could be. Data coming in shows that the pandemic has affected more that 2000 of our nationals.

At FiZ, in crisis we see opportunity for business. Ironic and crude as it may sound, there are some opportunities that exist for value creation as well as Corporate Social Responsibility (CSR). There is no doubt that businesses in the food value chain will be hardest hit as they are at the epicenter on how the disease spreads. However, looking closely at some of the key stakeholders who until now have been dormant, we see an opportunity that has been lying in wait albeit for a tragic episode in our history.

The health inspection industry is one in the western world that is taken seriously. Multinational corporations in the food industry across the world boast on how their health and safety records are in comparison to industry levels.

When Chapotle (a burrito chain in the United States) was hit by the E.coli (close cousin to Cholera) crisis, this hit its sales and brand. We anticipate the same will happen with fast food and retail chains in Lusaka that have been closed following tests that were  conducted on its products.

However, what Chapotle did to mitigate the crisis can be applied in the Zambian context and this is where we see value being created. Some of the measures the Burrito chain applied included supplier intervention which ensured that steps were taken to avoid food safety risks before ingredients reached the company.  They also upgraded their technology by using advanced tools that eliminate pathogens while maintaining food quality. Furthermore, they incorporated farmer support and training in food safety and ingredient traceability.

All the aforementioned measures resulted in new businesses being created around the Chapotle ecosystem. This is how, if viewed in the Zambia cholera context, value can be created. Emergence if businesses that were not previously thought of will become inevitable. Conversely, we argue tightly knitting hygiene into the value chain, will create sustainable businesses.

In addition, many retail shop owners will be viewing the hygienic items that until now have recently become fast movers off shelfs. The economics of hygiene has become a real concern for consumers who up until now would not make the product hand sanitizer a must have on the shopping list. We envisage that will rank top priority alongside items such as tissue paper.

However, it is not enough for businesses to be created as a result of a crisis. Giving back to the community that supports business should be at the very heart of business. The Kitwe Mayor has been on record to approach the business community for assistance in cleaning up the Copperbelt city. Such efforts are admirable because it shows that business cares about those people that allow it to create value.

Trade Kings is a FMCG company that has taken CSR and actually turned it around into shared value. Their recent donation to help the cause can be viewed as a gesture to help with the pandemic. However, a closer business strategy look would indicate that the company is positioning itself very carefully around the economics of hygiene. A mutually beneficial move indeed.

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