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Lobby group the Confederation of Zimbabwe Industries believes Government and the private sector have to focus on value chains, where emphasis is given to every business in the production cycle, to spur economic growth. Value chains encompass the full range of activities and services required to bring a product or service from its conception to sale in its final markets. Usually, developing value chains entails investment in lead companies whose activities benefit both upstream and downstream industries. CZI says rehabilitating companies such as the Grain Marketing Board and the National Railways of Zimbabwe — viewed as enablers of economic growth — will help improve linkages between the private sector and parastatals.
Capacity utilisation in the local manufacturing sector is lower than in other Sadc countries, and Government recently came up with Statutory Instrument 64 of 2016 to help defend industries against foreign competition.
However, CZI vice-president Mr Sifelani Jabangwe opines that more needs to be done, such as concentrating on developing value chains.
“If this work of producing these goods and services was to be done from within Zimbabwe, it would create jobs and distribute income within the economy of Zimbabwe. These jobs would reduce the unemployment levels and the incomes would reduce poverty levels leading to improved statistics of improved nutrition, particularly for women and children.
“If more of the value chains for supplying goods that are consumed by Zimbabwean are directed inward then it creates a situation where every dollar circulates several times before it goes out of the country to purchase imported content.
“Thus we will contain the cash flight problems that have caused the cash crisis over the past few months. This demand for goods and services is due to consumption from subsectors such as mining, tourism, agriculture, manufacturing as well directly by consumers,” says Mr Jabangwe.
Government used to use incubation measures to support sectors such as poultry, dairy, bakery, milling and edible oil.
For example, experts say sugar milling in the Lowveld has potential to have a positive multiplier effect on the economy through linkages it has with sugarcane outgrowers. And they add that import substitution can help resuscitate industry, create jobs and reduce poverty.
At the recent CZI congress, the United Nations Industrial Development Organisation launched a programme to support local industry in the three years to 2019.
Unido is a specialised UN agency headquartered in Vienna, Austria whose primary objective is to promote and accelerate industrial development in developing countries and economies in transition, and promotion of industrial co-operation. CZI has a linkages programme supported by the European Union to link large corporations with SMEs. It also has an agro value chain subcommittee to link agro-processors and suppliers.
Online Reporter