Online Reporter
GROWTH in manufacturing will continue to create a significant number of jobs in Zimbabwe for many years to come, as well as increasing national wealth and a favourable balance of trade, thus ensuring a strong and stable national economy.
Other sectors like mining, agriculture and tourism are also contributing towards economic growth and job creation.
The Second Republic saw the need for strong manufacturing growth from the start, although realising that a lot of heavy lifting was needed in many other sectors before that resurgence as a first step followed by significant annual growth could take place.
Agriculture was the fundamental first step, not only to ensure that Zimbabwe could feed itself, but also to ensure that very large local markets for manufactured goods were created.
At that point farming absorbed more than half the labour force although the percentage has been dropping as populations rise.
Mining was quicker to grow under the new investment rules, with a much shorter lead time generally than new manufacturing.
Again with wealth being created, there were larger markets.
Mining also started to merge into heavy industrial manufacturing as the Government policy of insisting on full processing of ores has been taking effect.
Manufacturing growth also required a high level of economic stability, reasonably constant exchange rates and even when local raw materials were the primary feedstock, there was still the need for adequate foreign exchange to buy high-level equipment and machinery.
So the boom in manufacturing was always going to be a later stage.
That boom is now finally in progress.
One measure of manufacturing is capacity utilisation, that is what percentage of installed capacity is actually being used.
Last year in the first quarter it was just under 48 percent, not wonderful but significantly better than when the Second Republic started its economic reforms.
In just 12 months that jumped by almost a fifth to 57 percent and already we have major factories looking at well over 70 percent, with the only downtime there being for maintenance, cleaning and repairs.
High capacity use pushes up cost efficiencies, that the investment in the modern equipment, which is usually not cheap, is spread over a far larger total of manufactured goods.
Generally speaking, as capacity utilisation rises so do workforces. Often extra shifts, as well as larger shifts, are needed.
This is not a serious problem under modern labour law, which stops exploitation of workers.
More importantly exports of manufactured goods are rising. They are still on the low side, just over US$80 million in the first three months of this year, but that was an 18 percent jump on the just under US$70 million in the first quarter of last year.
The modern industrial surge is not so much being led by import substitution, which became a bit of blind alley when the economy opened up and lower-quality expensive local products were simply unsaleable.
Some major manufacturers have survived, but they were the ones offering quality and value for money, and now they are also pushing exports.
More importantly for long-term growth is being able to process the vast range of local raw materials into manufactured goods for export, where the potential is effectively unlimited. Import substitution is locked into the local population.
When it comes to earning a living manufacturing must lead employment creation.
Agriculture is basically a static workforce, using all land to the full but within that limit that new land cannot be created.
So while farming families expand their incomes, there are unlikely to be many more extra farming families.
Mining has boomed and created new jobs.
Commerce is expanding and as a result creating a platform for more jobs.
When our markets are the region, the continent and the world, then manufacturing can expand and add a lot of extra value to what the farmers grow and the miners dig up.
We talk about full beneficiation of all ores, a necessary step.
But the final step is exporting manufactured goods made from the processed mineral products.
Even our agricultural exports should not be the raw grains and raw tobacco leaf, but rather the products of a vibrant agro-industrial base.
Generally we need to start thinking that all exports are something that can be put on a shop or supermarket shelf, having been processed in Zimbabwe and then converted into saleable goods.
That means quality and value for money, but the hard times our industrialists faced hammered home that lesson.
