adminindirect taxes and a freeze on salary increases not linked to industrial productivity.
In a statement, CZI president Mr Charles Msipa said the lobby group’s national council had deliberated on the matter and identified some key short-term issues that could provide relief while bringing about industrial viability.
“The Confederation of Zimbabwe industries National Council met on July 2, 2013 to review the current business operating environment. It was noted that the manufacturing industry is in a very dire state.
“Companies continue to close and those that are still operating are finding it difficult to pay creditors,” he said.
The newly elected CZI president recently said economic growth had stalled, resulting in company closures and loss of jobs in the manufacturing industry.
He said industrial capacity utilisation had declined from an average of 57 percent in 2011 to about 40 percent in 2012.
This was attributed to stunted economic recovery, company closures and a decline in industrial output due to constraints on access to medium-term funding and its prohibitive cost among other factors.
The Schweppes Zimbabwe chief executive recently took over the CZI presidency from Nestle Zimbabwe managing director Mr Kumbirai Katsande after an elective annual general meeting held in Harare three weeks ago.
The country’s inability to trade and access assistance from multilateral financial institutions due to sanctions imposed by Western governments has also had a profound negative effect on the manufacturing industry.
Economic recovery has averaged 7,1 percent since dollarisation of the economy in 2009, peaking at 9,3 percent in 2010 before losing steam in the last two years.
Mr Msipa said the limited short-term nature of funding available to companies that need to retool and increase output was “prohibitively” high in Zimbabwe.
After a decade of economic instability and the changeover to a multi-currency dominated by the greenback, the high cost of short-term funding that ranged largely between 10 percent and 30 percent have all conspired to arrest the economy’s potential for growth.
Other factors affecting business included limited supply and the high cost of energy, water, labour and increased competition from imported products following the lure of the stable US dollar.
Mr Msipa said CZI’s immediate focus under his leadership was the need for credible and peaceful harmonised elections scheduled for July 31 as directed by the Constitutional Court last month.
During his tenure, Mr Msipa said he was also pressing for a “clear and consistent policy” mix, transparent and ethical in public and private sector and resolving the challenges around cost and availability of power, state of infrastructure and water supply, among others.
Online Reporter