admin
Speaking in Harare during his maiden Press briefing as CZI president, Mr Msipa said industrial capacity utilisation also declined from an average of 57 percent in 2011 to about 40 percent in 2012.
He attributed the stunted recovery, closure of companies and fall in industrial output to constraints around access to medium-term funding and its prohibitive cost among other factors affecting industry.
The Schweppes Zimbabwe chief executive took over from Nestle Zimbabwe managing director Mr Kumbirai Katsande after an elective annual general meeting held last Thursday.
He said the manufacturing industry’s situation was “very grim”. But he would not provide examples of the companies that have closed shop or the number of jobs lost due to the company closures.
The industrial lobby group has postponed its annual congress in Victoria Falls, slated for the end of July, as it was likely to clashed with the harmonised elections due on July 31.
“There has been significant closure of companies in the formal sector resulting in loss of jobs. We have seen a number of company closures in the manufacturing sector. Many businesses have downsized or embarked on retrenchments,” he said.
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 industry.
Economic recovery averaged 7,1 percent since dollarisation in 2009, peaking at 9,3 percent in 2010 before losing steam in the last two years.
Mr Msipa said the limited short-term funding available to companies that need to retool and increase output was “prohibitively” high.
After a decade of economic instability and changeover to a multi-currency dominated by the greenback, the cost of short-term funding had ranged largely between 10 percent and 30 percent.
Other factors affecting business included limited supply and the high cost of energy, water, labour and competition from imported products following the lure of the internationally 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 earlier this month.
“If we can achieve that, we will be optimistic of the new Government bringing into play policies that will promote economic growth and improve performance of business,” he said.
Mr Msipa said he was also rooting 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.
“These are critical matters for any government that will be established. They contribute to the success of business operations,” he said.
Mr Msipa said the CZI would have a clearer picture of the state of industry when it conducts an enlarged manufacturing sector survey covering non-CZI members while exploring industry’s competitiveness. The survey is expected to be ready by September.
During his presidency, Mr Msipa will be assisted by Mr Henry Nemaire and Mr Edison Padya as the two vice-presidents, while Mr Willard Gwama would be the industry lobby group’s honorary treasurer.
Online Reporter