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FOR the past three days, Acting President Phelekezela Mphoko has been on a tour of industries in Bulawayo on a mission to appreciate their problems and find solutions to their multi-faceted challenges that have seen the once vibrant sector operating way below capacity.
The story of the demise of Bulawayo’s industries is a sad tale considering that the city was once the country’s industrial capital with flourishing factories in the vast Belmont area. At the turn of the millennium, the country’s economy took a hit and the manufacturing sector was among the worst areas to suffer as economic sanctions stifled their ability to run their businesses.
Productivity nose-dived as companies failed to retool due to their inability to access cheap financing. With obsolete equipment, the industries had no chance and couldn’t compete with cheap imports which rendered their products expensive on the market. For close to a decade between 1999 and 2008, Bulawayo witnessed its worst period of company closures and relocations with most firms going to neighbouring countries and Harare.
Today the city resembles a ghost town with a sprinkling of firms such as United Refineries, Archer Clothing, Datlabs and Arenel operating at decent capacity utilisation levels while the big engineering firms synonymous with Bulawayo’s industrial heartland — Zeco, F Issels and Sons, General Belting, Radiator and Tinning and Hubert Davies are either defunct or just factory shells in near comatose state.
Acting President Mphoko’s tour brought him face to face with the reality of Bulawayo and although it’s not all gloom and doom, a lot needs to be done to bring the city back to life. Before embarking on his tour, Cde Mphoko said there was a “criminal wave” of business property auctions in Bulawayo and other parts of the country, describing it as a deliberate ploy to frustrate economic growth.
The demise of Bulawayo industries, he said, was largely engineered by corrupt individuals who connive with errant judicial officers to strip companies and attach their properties, which they go on to sell for a song. “Bulawayo problems are mainly a result of corrupt tendencies. We’ve people who connive with the Sheriff and the lawyers to attach business properties, which they sell for a song. That’s criminal! There’s a lot we can do in this city but some people are just crooks,” Mphoko said.
“It’s possible to turn the economy of this city around because the necessary infrastructure is still there. So, let’s work together to bring transformation and return Bulawayo to what it was.” Dozens of companies including state enterprises such as the Cold Storage Company (CSC) and Hwange Colliery Company Limited have lost properties and equipment through auctions over debts to various creditors.
Some of the affected companies have suffered total collapse, with surviving ones struggling to keep afloat. Lobby groups and unions have partly blamed the development for loss of jobs as they urged adoption of a moratorium to protect company assets.
Acting President Mphoko on Wednesday failed to tour defunct clothing firm Merlin (Pvt) after the judicial manager, Cecil Madondo, allegedly refused with the keys to the premises — highlighting the need for urgent intervention to rescue ailing companies from the clutches of judicial management.
Merlin, placed under judicial management in 2011, was one of the biggest textile companies in the country and key shareholder Delma Lupepe says he has found investors to revive it. We feel reason should prevail and Madondo, creditors and shareholders should thrash out a deal so that it reopens. Bulawayo companies also told Acting President Mphoko they need a waiver on interest charges levied on them by financial services which are crippling their operations.
Several companies are struggling to remain afloat because of the debt burden while some have lost properties and equipment worth millions of dollars to creditors after they failed to pay back the monies borrowed. This has made it difficult for surviving companies to access fresh lines of credit, which has hampered recapitalisation efforts.
On a positive note, Acting President Mphoko learnt that 300 jobs would be created in Bulawayo when sweets and biscuits maker Arenel opens a new snacks division this month. Choppies Zimbabwe is also investing in water purification, soap making and packaging.
This is certainly good news for the city and we hope more investors will come on board and help revive Bulawayo. We are confident the Acting President will tackle head on, all the challenges raised by the city businesses so that they are assisted to get back on a firm footing.
We are aware the government has been working tirelessly to protect local industries through levying tariffs on imports of goods that are available in the country and we are sure more will be done to further assist them.
After the Acting President’s tour, we expect things to change for the better for Bulawayo industries.
derick.khumalo