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Martin Kadzere Senior Business Reporter
INDUSTRY and Commerce Minister Mike Bimha says some of the companies that collapsed are beyond redemption and efforts should be directed at bringing in new players.
He said the re-industrialisation process would not entirely hinge on reviving companies that have collapsed, but would also emphasise bringing new entities on board.
Zimbabwe went through massive de-industrialisation in the past one and half decades as many firms were forced to close down, downsized or relocate due to economic challenges.
Re-industrialisation is one of the critical areas that Zim-Asset, the country’s economic blueprint seeks to address.
Most of the big companies in Zimbabwe were set up before independence, during the UDI era as a sanction bursting measure.
In some instances, companies were set up using second hand equipment.
After independence from Britain in 1980, little was invested into acquiring new machines to keep pace with changes in technology with most firms focusing on maintenance.
“One of the things we have to do as a ministry is to promote industrialisation,” said Minister Bimha.
“But we are not saying everyone who died must come back. Others died forever; for various reasons. It could be an issue of technology, which was completely outdated.
“Some were family business owned by people who have left. So what we are looking at are new players coming in and new players coming up with even better products.”
In 1986, the World Bank raised the concern on the archaic equipment used by industry at that time.
Economic analysts say while it was critical to revive viable old companies, it was equally important to start new businesses, as way of re-industrialising. This could be done by way of harnessing domestic resources to support small to medium companies to grow.
“While some companies have potential to get back, the re-industrialisation process should not entirely focus on bringing back old companies
“We need to promote new players and that is where the concept of Special Economic Zones becomes critical,” economist Dr Gift Mugano said in an interview yesterday.
In May this year, Finance Minister and Economic Development Patrick Chinamasa said there were structural shifts in the economy as the small to medium enterprises have emerged as an important sector while big institutions continue to struggle.
He said there was need to support the emerging companies than focusing on reviving collapsed firms.
He said it was critical to deploy domestic resources, particularly from pension funds to support the emerging companies “so that they can graduate into reputable institutions.”
Another economic analyst said by bring on board new players, favourable policies should also be put in place to attract foreign direct investment to spur re-industrialisation.
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