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Shopping mall growth

KUMBUKILANI Phiri.

Analysis: KUMBUKILANI PHIRI
A FEW days ago, I came across a musing by Kenneth Mwenda about shopping malls and industrialisation.
In his musing, Professor Mwenda argued that President Kenneth Kaunda had industries, not shopping malls. He went on to say that we should not mistake shopping malls for development.
To start with, this is not meant to pick a fight with the learned professor. I have so much respect for him and he is someone I have always looked up to as a model of inspiration.
Kindly also note that I am not an expert in economics, nor am I an expert in investments. However, when I read Professor Mwenda’s musing, I decided to do a bit of thinking.
Therefore, my argument in this article is entirely based on a layman’s understanding of the topic at hand.
Firstly, I do not agree with the professor’s argument that shopping malls should not be mistaken for development. Secondly, the argument that Dr Kaunda had industries and not shopping malls, is a bit misplaced because of time factors which dictate that needs of yesteryear are different from the needs of today. The comparisons could have made more sense if we were to talk about the contribution of industries to the GDP then and now. This way we could have at least used the same scale to argue on the matter. Otherwise, to argue in the context in which the prof put the two comparisons is like arguing that Dr Kaunda was better because he had land phones and we have cell phones now. The two comparisons are misplaced because even if Dr Kaunda needed to have a cell phone then, he wouldn’t have had any because the technology was not yet developed at the time. We can also not argue that having a cell phone now is not good because Kaunda had a landline.
So, why do I disagree with the learned professor that shopping malls actually do mean development. According to dictionary.com, a shopping mall is a modern form of shopping precinct or shopping centre, in which one or more buildings form a complex of shops representing merchandisers with interconnecting walkways that enable customers to walk from unit to unit. In short, a shopping mall is just a form of infrastructure that retailers use to sell their merchandise to consumers.
The question then is, is infrastructure development regarded as development. According to the African Development Bank, infrastructure development is a key driver for progress across the African continent and a critical enabler for productivity and sustainable economic growth. It contributes significantly to human development, poverty reduction, and the attainment of the Millennium Development Goals.
Therefore, unless argued otherwise, erecting of shopping malls falls under infrastructure development.
Further, our next question is, how do shopping malls become key drivers for progress and enable productivity and sustainable economic growth? Scholars do argue that, before you sell, you have to create demand. Consequently, shopping malls have been built as an infrastructure in places where the demand for certain products has been identified. Let me give you a scenario from my own personal experience. During my time as a young boy in Ndola, there was a bakery called Musa Bakery which used to produce a very delicious and famous biscuit in Ndola. Grocers would come from different parts of Ndola to buy the biscuits. The disadvantage was that apart from the grocers within and nearby Ndola, others in other regions in the country could not access the biscuits unless Musa Bakery decided to open an outlet there. The other constraint was that Musa Bakery could only consider opening an outlet in an area if the demand was high enough to cover their basic costs and make a profit, otherwise it made no economic sense. In the end, many grocers in other regions never got to sell the biscuits.
Fast-forward to today, the picture is different. One can produce a product anywhere and still be able to sell through chain stores found in almost all shopping malls countrywide. Since transportation is normally centralised and either done by the chain stores through their logistics networks which benefit from economies of scale by distributing several different products in varying quantities together, one can produce any quantities and still be able to supply countrywide almost at the same price. Therefore, if Musa Bakery is making biscuits, they can ensure the whole country tastes the biscuits almost at the same cost as in Ndola through the chain supermarkets. The small producer only has to strike a deal with a supermarket to get access to the channel. In short, the small producer is like someone who owns a shop without actually being responsible for costs associated with running it. This is actually what is stimulating manufacturing and later economic growth.
To sum it up, Dr Kaunda may not have had shopping malls then perhaps because, during that time, the country had a smaller middle class than now. Further, advancements in technology have made transportation and communication easier, which has in turn created opportunities for global trade. This means a product can be produced anywhere and sold anywhere with less costs. Chain stores found in shopping malls help in making this a reality as they are able to distribute several different products in varying quantities to different locations at cheaper prices. This sort of advancement has led to the popularity and demand for shopping malls across the world, not just in the developing world.
In the context of Zambia, instead of crying about the mushrooming shopping malls and how they are stocking foreign products, we should instead be thinking about how we can use this infrastructure to fill all the shops with locally produced products. Before we go further, here are some of the questions we should be asking;
1. Is there demand for shopping malls in areas where they are being built?
2. What products are being sold in these chain stores?
3. Where are the products coming from?
4. Can we make these products?
Given the arguments above, perhaps we can take Professor Mwenda’s argument as an early warning. Instead of shopping malls just becoming a luxury to spend from, Zambians need to start thinking of how to make it an opportunity to create their manufacturing base. This can only happen if our policy development start recognising a Zambian as an investor instead of foreigners only. Government could perhaps consider reducing the threshold for Zambian-owned companies to qualify for an investment licence that can enable them benefit from the many incentives that come with it such as tax holidays during the first few years of operation.
Institutions like Citizens’ Economic Empowerment Commission and Zambia Development Bank need to be recapitalised with the focus to finance local manufacturing projects. If all this is going to be done, we will definitely not look at shopping malls as a burden to us but as an opportunity to create our own manufacturing sector to supply all the stores in shopping malls and export the excess to our neighbouring countries and earn forex.
The author is an entrepreneur.

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