Industrial Development Policy reviewed

Industrial Development Policy.
This is believed to enhance their capacities as industrial organisations.
Observers have in the past suggested that industry-specific organisations such as the Consumer Council of Zimbabwe, the Competition and Tariff Commission and the Standards Association of Zimbabwe are not properly capacitated to fulfil their respective mandates.
For instance, since 1998 when the Competition Act (Chapter 14:28) came into existence the CTC’s involvement in regulating competition and unfair trade practices has largely been restricted to mergers and takeovers, with very little in areas of direct public concern.
There have also been concerns about the commission’s limited powers to enforce the regulatory statutes of the Competition Act, an accusation that has also been levelled against the CCZ, which is supposed to protect the rights of consumers.
The CCZ seeks to empower consumers by monitoring product quality and service to ensure total adherence to reasonably accepted standards and has consistently lamented price distortions and product quality in the local marketplace.
It is, however, largely perceived as a “toothless bulldog” to the extent that its role is restricted to that of advocacy.
However, indications from the draft Industrial Development Policy document are that these institutions’ structures could soon be revamped under the new policy framework.
“Institutions such as the Competition and Tariff Commission, Consumer Council of Zimbabwe and Standards Association of Zimbabwe are currently incapacitated structurally to represent consumers’ interests and to enforce quality compliance.
“These institutions, especially SAZ,. will be capacitated to regulate and enforce standards on both locally produced and imported products,” reads part of the draft document.
Organisations such as the CTC, CCZ and SAZ are critical components of the country’s industrial environment insofar as they are part of the regulatory framework that ensure the manufacture and trade of quality products and services.
This is particularly important in view of the policy’s targets to improve the country’s productive sectors’ contribution to Gross Domestic Product from the current 15 percent to 30 percent, and its contribution to exports from 26 percent to 50 percent by 2015.
Meanwhile, analysts at the meeting where the draft was tabled questioned the rationale behind the selection of specific sectors as priority areas in the policy.
The Industrial Development Policy should typically be non-targeted. However, the draft policy that was made public last month is premised on the enhancement of production capabilities and firm competitiveness in diverse and non-traditional sectors of the Zimbabwean economy.
In terms of the draft Industrial Development Policy, the Government has identified four priority sectors as pillars for the policy, namely agro-processing, fertiliser industry, metals and electrical and pharmaceuticals.
“These are sectors which can be developed without the need for massive amounts of capital resources, but which can be partly recapitalised from the country’s own resources, including the remainder of the Special Drawing Rights and local lines of credit being offered by local financial institutions,” reads part of the draft document.
The SDR is an international reserve asset of the International Monetary Fund and was availed to countries at the peak of the global financial crisis that commenced in the last quarter of 2007 to cushion them from the effects of that crisis.
Economists believe that the use of SDR funds should be on productivity and have a multiplier effect.
However, participants at the promulgation of the draft policy lamented the specific sectors that had been selected arguing that they were not representative of the sectors that have shown significant growth potential in recent times.
“It does not make sense to exclude the minerals sector, as a case in point, among these priority areas because for the past two years this sector has shown immense potential,” commented one observer.
Presenting the 2011 monetary policy earlier this year, Reserve Bank Zimbabwe Governor Dr Gideon Gono projected Zimbabwe’s mining output to increase by 44 percent buoyed by strong demand and high commodity prices for precious metals such as gold and platinum.
According to the director of enterprise development in the Ministry of Industry and Commerce, Mr Stansilas Mangoma, the focus on the four priority areas is based on the need for the country to develop its own areas of comparative advantage so as to be competitive in regional and global trade.
The Ministry of Industry and Commerce also said the decision to select a few sectors for prioritisation was taken in view of the limited finding available in the market at present, as opposed to the large capital-intensive industries.