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Elliot Ziwira Senior Writer
In 1980 the journey began for the empowerment of Zimbabweans through policy frameworks that unlocked spaces for blacks in industry and commerce.
The challenges of mass exodus of white Rhodesians to South Africa New Zealand, Australia, the United Kingdom, Canada and the United States that affected other sectors of the Zimbabwean landscape at Independence, did not spare industry and commerce.
In colonial Rhodesia the sectors were in the hands of whites resident in the country, and their backers in South Africa, Britain, Australia and elsewhere, hence, their attitude towards the new black Government was that of aloof disinterest and a rather wait and see arrogance, especially among the younger generation of settlers.
On the other hand, there were some whites who were willing to partner blacks in the new Zimbabwe as was encouraged by the Government through its policy of reconciliation as opposed to revenge.
To empower the previously disenfranchised blacks the Government of Zimbabwe, through the Ministry of Trade and Commerce (later known as Industry and Commerce), changed the game rules, not necessarily by being exclusionary, but through enactment of people-oriented policies which opened up spaces for all Zimbabweans regardless of race, creed or ethnicity.
The ministry administers 23 Acts of Parliament, and oversees the operations of four public enterprises and parastatals, namely; the Industrial Development Corporation, Zimbabwe Iron and Steel Company, Olivine Industries and Zimbabwe International Trade Fair Company. The ministry also administers the following public bodies; Competition and Tariff Commission and National Incomes and Pricing Commission.
It has a close working relationship with the Consumer Council of Zimbabwe (CCZ), the Standards Association of Zimbabwe (SAZ) and ZimTrade.
At the helm of the Ministry of Industry and Commerce is Dr Sekai Nzenza who is deputised by Honourable Rajeshkumar Modi with Dr Mavis Sibanda as Permanent Secretary.
Mandate
Inspired by the vision to be a pillar of Zimbabwe’s industry competitiveness domestically; regionally and globally, the Ministry of Industry and Commerce’s obligation to citizens is to promote the development of vibrant sustainable and globally competitive industrial and commercial enterprises, and fair trade practices through the provision of conducive policy and regulatory frameworks.
Functions
The ministry endeavours to; formulate, implement, coordinate, review and monitor policies in industry and commerce; oversee the orderly development, promotion and growth of domestic and international trade; enhance the development and promotion of quality standards for industrial products; and develop the sourcing and provision of short, medium and long-term financing and financial services for industry and commerce. To fulfil its mandate, the ministry is seized with the promotion, maintenance and expansion of mutually advantageous trade and trade relations with foreign countries as well as collection, analysis and dissemination of trade and industrial information.
Historical background
Rhodesia’s industrial development was premised on settler colonialism where whites owned the means of production and blacks provided cheap labour. Robbed of their arable land, blacks also had to do with de-stocking which limited the number of cattle they could own. As a result they lost a remarkable part of their wealth through the Loot Committee which provided seed cattle to whites to start their own herds through the Cold Storage Commission.
Finding no other alternatives in their response to hut tax and other taxes, blacks moved to urban areas and mining settlements to feed into the capitalist machinery as labourers. Around the 1930s secondary industries grew from shoemaking, tailoring, wagon construction, meat tinning, confectionery and small-scale engineering to manufacturing, especially at the onset of World War Two (Phimister and Gwande, 2017). Riding on import restrictions and wartime demand, industrialisation grew exponentially. Metal manufacturing industries, electric water heaters, ploughs, pumps and radiators made their entrance.
According to Phimister and Gwande (2017), secondary industries grew in both value and numbers from 299 in 1938 to 382 by 1945 with a gross output of £14, 062 million. Notable at this period was state investment as compared to private ownership. Bodies such as Electrical Supply Commission (ESC) formed in 1938, the Cold Storage Commission (CSC) established in 1938, Cotton Industry Board (1942), the Rhodesian Iron and Steel Commission (1942), and the Sugar Industry Board had the state as the major investor (ibid).
In 1948, the Industrial Development Commission (IDC) was established to fund industries in different sectors. The IDC was later replaced by the Division of Trade and Industrial Development in 1948.
Support mechanisms were put in place to spur economic growth, but none of such schemes were open to blacks. With industrial expansion demand for raw materials grew which could be sustained through imports. Key raw materials for manufacturing purposes were, therefore, allowed free passage or at minimal rates. Rebates were given as well and capital goods entered the country “free of duty inside the British Empire, or at five-percent if from other countries” (Phimister and Gwande, 2017:88).
As a result of government’s intervention, foreign investment, especially from the United Kingdom and South Africa grew. The Customs Agreement of 1948 between Southern Rhodesia and South Africa boosted post-World War industrial expansion.
The trade agreement set out which products could not be exported to South Africa, and opened up new markets for Southern Rhodesian industrial good so that by the end of the first year exports to South Africa more than doubled. In 1950 exports further surged by 70 percent.
By 1948, foreign capital accounted for 75 percent of total investments in the Rhodesian economy. South African investment in manufacturing was about £28,6 million by 1956. The Anglo-American Corporation of South Africa was one of the biggest investors around that time.
Rhodesia would make an industrial rebound around 1965 after a brief lapse. Phimister and Gwande (2017) note: “From 1965, the state focused unprecedented resources on controlling external account balances . . . ensuring labour market stability . . . and subsidising all manner of white business ventures. This entailed waiving overseas firms’ production rights, licensing arrangements and trademarks as well as other constraints against technology transfer.”
It is evident here that the Rhodesian government moved in to protect white-owned businesses, clipped the wings of overseas firms and encouraged investments in technology. Resultantly, in five years Rhodesian manufacturing industry was on its feet again. The number of factories grew from 665 in 1965 to 1 036 in 1970. Product range grew from 602 in 1963 to 1 059 in 1966, and 3 837 by 1970.
Rhodesia continued to flourish as a European nation in Africa with whites, who owned the means of production, living parasitic lives off black Africans’ heritage.
They were also supported by white-owned banks across the capitalist world.
Phimister and Gwande (2017) succinctly drive the point home: “It was very largely British companies, or more accurately, their Rhodesian and South African subsidiaries, whose manufacturing expertise and ever-expanding product range ensured the survival of the illegal regime in Salisbury despite economic sanctions imposed by successive British governments.”
British imperialism continued to play havoc on Africans through Rhodesian settlers with the empire pretending to side with the oppressed black people.
Sharing the fruits of Independence
Since Independence in April 1980, spaces have been opened for citizens in industry and commerce leading to the establishment of banks, import and manufacturing businesses owned by black Zimbabweans.
The Industrial Development Corporation (IDC) played a crucial role in these formative years through provision of financial aid and technical assistance to businesses, and assisted in filing the gap left by the departing white industrialists who could not stomach the idea that the “terrorists” who engaged them in the trenches of struggle were now in charge of their own affairs.
The establishment of the Small Enterprises Development Corporation (Sedco) in the early 1980s to assist small businesses, paid dividends as well so that in the first decade of Independence Zimbabwe’s industry was sound.
However, industrialisation that was slowed down by the departure of whites, and the attitude of those who remained behind, would suffer a major blow in the 1990s, after the introduction of the International Monetary Fund (IMF) and World Bank-backed Economic Structural Adjustment Programme (ESAP). The philosophy behind the programme was to “boost the private sector, while diminishing the Government’s role in the economy” (Chung, 2006).
Issues did not turn out as expected though, and as a result many factories folded leading to loss of jobs. Larger conglomerates elbowed out smaller businesses owned by black Zimbabweans or consumed them. The situation was exacerbated by the illegal sanctions imposed on Zimbabwe by the West following the post-2000 Fast Track Land Reform Programme meant to correct colonial imbalances in land ownership. For two decades now, Zimbabwe has been grappling with sanctions, which have brought untold suffering to ordinary citizens. To mitigate their impact Government has put in place policy frameworks, especially in the past three years, to attract foreign investment and promote the growth of local businesses.
The Second Republic led by President Mnangagwa advocates engagement and re-engagement as a way of pushing for outcomes where the common good is the ultimate winner.
In 2018, Zimbabwe’s premier investment promotion body, Zimbabwe Investment Authority (ZIA), revealed that it received 165 business applications worth US$15,8 billion between January and June of the same year.
In April 2018, President Mnangagwa led a delegation of 10 Cabinet ministers and about 80 business executives to China, as the new administration angled for opportunities in an effort to buttress ways to turnaround the economy, which has been under stress for the past two decades or so.
The President outlined his noble intentions then when he said: “The issue is not only about attracting capital into Zimbabwe. It’s an issue of leapfrogging after 18 years of isolation so that we catch up with the rest of the developing countries.”
Indeed, 18 years in the socio-political wilderness is a long time; so long that drastic, yet cautious measures are required to return to the fold for the common good of the nation State of Zimbabwe.
The reciprocal visit by a delegation of 60 Chinese government officials and private business executives to Harare in June 2018, led by the Secretary of Zhejiang Provincial Committee of the Communist Party of China (CPC) and Chairman of the standing committee of Zhejiang’s Provincial People’s Congress Mr Che Jun, ahead of the Zimbabwe-China Forum, to scout for business opportunities, was a huge step towards win-win outcomes.
The Chinese delegation’s call came at an opportune moment as it dovetailed with President Xi Jinping’s December 2015 vision for “real win-win cooperation” between China and Africa.
With China investing in 22 African countries; and Chinese companies having invested US$14 billion by September 2016 as Amy Jadesimi noted in her article “How China’s $60 Billion For Africa Will Drive Global Prosperity”; it is befitting that President Mnangagwa positions Zimbabwe to tap into this huge investment pool by opening up to the Chinese, opportunities in all sectors under the Comprehensive Strategic Cooperation and Partnership as agreed on during his visit to Beijing in April 2018.
In March 2019, the two principals to the Third Session of the Zimbabwe-South Africa Bi-National Commission Summit held in Harare, President Mnangagwa and his counterpart President Cyril Ramaphosa, signed an agreement to accelerate implementation of 45 Memoranda of Understanding (MOUs) cutting across various sectors of the economy,
From April 29, 1994, bilateral relations between the two countries took a new dimension meant to push forward the aspirations of the peoples of Zimbabwe and South Africa through fostering of win-win outcomes.
Beyond sharing geographical proximity, Zimbabwe and South Africa are top trading partners. According to the Zimbabwe National Statistics Agency (Zimstats), Zimbabwe imported goods worth $6,3 billion between February and December 2018, up from $4,9 billion in the prior year. During the same period the country’s exports stood at $3,9 billion, leaving a trade deficit of $2,4 billion.
A trade deficit of such a magnitude, however, needs to be worked on. Also, the nature of exports exposes another challenge; the exports are mostly unprocessed raw materials. There is urgent need for beneficiation across all sectors.
With the country angling for a middle income economy by 2030 supported by the economic blueprint, Transitional Stabilisation Programme (TSP), the implementation of 45 agreements between Zimbabwe and South Africa in existence on paper for some time, will not only add value to the country’s exports, but will revive the manufacturing, mining and agricultural sectors of the economy among others.
As Government continued to craft policies aimed at protecting investments and creating a conducive environment for business to thrive, more investors found home in Zimbabwe, one of them being Varum Beverages.
In 2018 President Mnangagwa commissioned a US$30 million state-of-the-art bottling plant at the company’s premises in Harare. The second phase of the manufacturing plant was officially opened in December 2019 at a cost of US$20 million.
The additional lines to the plant considerably increased production levels. Varun Beverages, the largest bottler of PepsiCo products — Pepsi, Mirinda, Mountain Dew and Seven-Up outside the United States of America, employs over 1 000 people, and has empowered 1 500 women through allocation of vending trolleys.
About 20 000 retailers and vendors have access to Pepsi products across the country, and close to 22 000 families benefit directly or indirectly from the company.
Another major investment that came to the benefit of Zimbabweans in the past two years is the US$120 million tile manufacturing plant in Norton. Sunny Yi Feng Tiles (Zimbabwe) opened its production lines in May, 2019.
The company operates three factories that make tiles, print cardboard boxes for packaging them and offer logistical support. With an installed capacity of 35 000 square metres of tiles per day, Sunny Yi Feng employs 1 000 people–800 Zimbabwean citizens and 200 Chinese nationals. A further 600 jobs will be created when full capacity is reached.
Due to a notable decline in capacity utilisation in the manufacturing sector between 2011 and 2014, the Government promulgated Statutory Instrument 64 of 2018, which sought to restrict importation of products that can be produced locally.
According to the 2017 Confederation of Zimbabwe Industries (CZI) sector survey capacity utilisation in the manufacturing sector was 45,1 percent, which was a 2,3 percent decline from 47,4 percent in 2016 attributable to cost of production, shortages of raw materials and unavailability of foreign currency.
In 2011 capacity utilisation was at 57,2 percent, before declining to 44,2 percent in 2012. Capacity went down to 39,6 percent in 2013, 36,3 percent in 2014 and 34,3 percent in 2015.
Another indicator that Zimbabwe was a destination of choice to investors was resplendent at the 60th edition of the Zimbabwe International Trade Fair (ZITF) which ran under the theme “Propagating Industrial Growth through Trade and Investment”, in 2019 when space was sold out for the first time since inception in 1959 forcing organisers to pitch up tents.
The space available for sale rose from 47 612 square metres in 2016 to 57 732 square metres in 2019. Inroads have also been made towards beneficiation of horticultural products through Government support to companies in that sector, and the resuscitation of the national herd.
Chinhoyi University of Technology launched an Artificial Insemination Programme that can yield US$140 million which can go a long way in growing the national herd, empowering farmers and boosting the country’s foreign currency coffers.
Online Reporter