What Exactly is Capital?

By Dereck Tafuma 

Unless we understand what capital is, we will not recognise it when we see it, we will not look after it, and we will not create more capital. The cycle of scarcity and poverty will continue for generations to come. We need to stop now and think. We need to identify capital and build on it. A change of mindset is required to inform economic growth and development. 

The only free capital we have is the mind. The mind is a great starting point because it will help us to interrogate the question of capital, understand it, and create new capital. It all starts in the mind. Before we can build a prototype, we can visualise what we want in the mind, and we can put our efforts into reality through implementation. Implementation is a long word and not a favourite for the procrastinating mind but it is the only way we can bring dreams to life. 

So here's an example of capital. The ideas I am putting into this article are capital. Readers may place some value on them. When they have done that they may want to share this value with their friends and family because they see benefit in sharing these ideas. That's what we do with money. We place a value on money and we share that money because of its value. When the money loses value we throw it away and nobody picks it up. If you want to see the value of a coin check if you can find it lying around. You will find only the less valuable ones. 

Let's consider a car. The value you place on the car can be seen by how you take care of it. It's the same with everything. We look after the things we consider valuable. The same goes for the economy. The economy is built by how we manage capital. We need to understand the things which constitute capital and the value we place on them. If we don't value capital we cannot look after it or grow it. It's that simple. The most important resources a country has is land and its people. People give value to land, even a desert. A case in point is Las Vegas in the U.S. State of Nevada. A desert turned into an economic capital generator. It is famous for its mega casinos and major boxing matches. Tourism, gaming or gambling, and conventions drive the Vegas economy. 

In Zimbabwe we need to begin to place value on our capital. The land and the people. Especially the people. Without a proper mindset, we will continue to destroy the capital we have, donating long term gratification for short term gain. We will continue to frequent European car showrooms instead of getting our hands dirty on the farms or mines. Our economy relies mainly on agriculture, mining, and tourism. How much value have we placed on these three drivers of economic growth and development? It is difficult to say because we don't talk about what is happening there. We know that on the farms were interested in cash crops such as tobacco ahead of food crops. We know that in mining we have no clue what is happening to revenue from diamonds and other minerals. We suspect the Chinese have secured long term mining deals to supply their industrial push back in China. 

Tourism crops up once in a while when we sell elephants to China or when a tourist kills a lion. I will do an article on Cecil The Lion. He has brought in revenue for years. He was head of a pride and now his Cubs risk being killed by a rival make head of pride. That's capital and I know many think it's not worth talking about. That's because we don't recognise capital when we see it therefore we can't preserve and look after it. Why is Cecil the Lion only being talked about today? How about some other interesting animals there? How can we generate more capital from our natural heritage? In Kenya tourism generates more than USD1 billion annually. Zimbabwe generates less than half a billion dollars per year. We can do more. 

Capital is all around us. We just need to identify it, give it the appropriate value, and use it to create more capital.