‘Create conditions for business growth’

frameworks.
Poor infrastructure and lack of legal property market for all business (big and small) have also been cited as factors affecting industrial growth.
Presenting a paper of features and challenges facing the country’s industrial development at a Confederation of Zimbabwe Industries’ seminar, economist Dr Dan Ndlela said history had proven that Governments are not good entrepreneurs and should only facilitate business.
He said that the Government should focus on creating conditions that facilitate private entrepreneurship to drive wealth and create jobs.
Dr Ndlovu said Government had the responsibility to steer direction for wealth creation, lay down terms for doing business and address national codes of property rights taking on board all economic players.
State inefficiency in managing businesses has manifested in the poor performance of such key institutions as Air Zimbabwe, National Railways of Zimbabwe, Zesa Holdings, TelOne and IDC among others.
“Governments react differently depending on the circumstances. At times they react positively and provide regulatory and promotional institutions, issue guidelines and incentives to the small to medium enterprises and other informal sector,” said Dr Ndlela
“At other times governments have reacted by demolishing what they perceive as shanty towns and illegal businesses,” he pointed out.
It is in this regard that Dr Ndlela said there was urgent need for new industrial development strategy that addresses legal codes of property rights including SMEs.
He said that in its industrial development strategy the country needed to create global value chains processes by allowing the widening of markets as new players come. Such channels permit growth through inclusive networks.
Value chain processes key to industrialisation that existed in the 80 and 90s and key to agriculture, mining, manufacturing and construction include engineering, metal work, agro-processors, textiles and garments.
These value chains have collapsed for instance where the country processed 80 percent of cotton produced locally into lint and yarn, it was now exporting about 98 percent of the white gold unprocessed.
Reviewing the value chain, he said was paramount for Zimbabwe as it is not only viable, but is the brick and mortar for many industrialised nations.
In the last 15 years, the country’s manufacturing sector has been in decline recording negative growth of 5 percent annually instead of progressing from raw material, procurement, design and transformation.
Zimbabwe should track its economic evolution, pull together information and rules about assets and established property systems to gather in one institutional process that underpin the creation of capital.
But under current conditions Zimbabwe needed to open its markets supported by secure property markets, rule of law, strong financial markets, sound infrastructure, access to international markets and competitive domestic markets for goods, services and labour.
Industrial deepening, Dr Ndlela said, will not take root where there is policy inconsistency and frequent policy reversal and under such conditions industrial players will continue to seek infancy status.
He said macro-economic and firm level conditions that accompany the process of opening up economies determine the success of the process.
“Factor endowment, geography and institutions do matter but sticking to static comparative advantage will only place a country on a slow lane.
“Countries such as Mauritius do not produce cotton, but have a proud history in exporting textiles and garments from Sub-Saharan Africa. Mauritius has no diamonds but exports cut gems competitively.
“This approach will also materialise where emphasis is placed on transforming current installed capacity into efficient processes to enhance warped competitiveness while ensuring markets exist for the output,” he said.