adminThe initiative is part of the Government’s Industrial Development Policy (IDP 2012-2016) document, which seeks to restore the country’s economy through capacitating the manufacturing sector.
President Mugabe officially launched the new industrial policy and trade document in Harare on Thursday.
According to the document, the Govern-ment through the Ministry of Industry and Commerce, would identify sectors with common production patterns and assist them in taking advantage of economies of scale in order to improve their operations.
“The principle seeks to identify sectors with synergies and promote them to operate through a combination of either a specific geographic or product area. For instance, in terms of product area, the clothing and textile industry can establish factories in cotton growing areas such as Gokwe and the engineering and steel firms can establish operations in the Midlands and Bulawayo provinces.
“In terms of geographic area, those companies in the cutting, polishing and value addition of diamonds can set up factories in Manicaland Province,” reads the document.
“There is empirical evidence, which proves that where this principle was adopted and implemented, there have been substantial benefits derived in terms of economic growth and development.”
The document further notes that the Government would support industrial clusters through training in export marketing, identification of potential export markets including niches, and facilitating preferential access to trade finance.
In the document, Industry and Commerce Minister Professor Welshman Ncube said the Government would prioritise the cluster system, adding that the initiative has proved to be a useful economic model in countries such as Pakistan, Malaysia and Republic of Korea.
“The motive for adopting such a strategy is based on the proven benefits accruing in terms of attainment of economies of scale, enhanced value addition, global competitiveness and development of comparative advantages.
“The concept itself, which is intended to capitalise on proximity to production, procurement and marketing synergies, is facilitated through agglomeration of interlinked production activities comprising industries, their suppliers, critical supporting business activities, requisite infrastructure, institutions and the associated policy framework,” said Prof Ncube.
It is the Government’s contention that the cluster system would enable local companies to produce goods that would compete on a global scale.
“Factors external to the business are becoming increasingly important. Each firm is inherently part of a cluster of activities made up of firms along the value chain as well as related and supporting organisations.
“Around the world, it has been demonstrated that strong clusters ensure a sustainable competitive advantage, which is necessary for economic growth and development.
“The objective behind adopting such a strategy is based on the proven benefits accruing in terms of attainment of economies of scale, lowering production and transaction costs, global competitiveness and development of comparative advantages,” reads the document.
The new IDP would also look into aspects such as industrial financing, review of import tariffs and resuscitating distressed companies.
Contacted for comment, Confederation of Zimbabwe Industries (CZI) president for Matabeleland region Dr Ruth Labode said although policies were essential, much attention should be given to harnessing industrial capital.
She said making documents alone and crafting policies would not bring the desired results if companies remained under-capitalised.
The last decade has witnessed the decline of the manufacturing sector, which has resulted in massive company closures, especially in Bulawayo.
The development has resulted in loss of jobs to hundreds of people and the mass exodus of skilled manpower to neighbouring countries.
Online Reporter