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From Martin Kadzere in BULAWAYO
THERE is not much that can still be discussed on reviving Zimbabwe’s ailing manufacturing sector, but focus should now shift towards putting plans into action, says Minister of Industry and Commerce Mike Bimha. He pointed out that there should be a collective call for removal of sanctions and effective engagement of the World Bank and the International Monetary Fund.
Citing a number of economic blueprints previously adopted by the Government, Minister Bimha, a former industrialist, said the documents offered similar solutions, but what had been lacking was implementation.
“A lot of plans are already in place,” Minister Bimha said while officially opening this year’s edition of the Confederation of Zimbabwe Industries annual conference here.
“I think through this approach, I will be able to proffer the imperatives necessary to collectively and historically address the de-industrialisation conundrum.”
“The challenges that have caused our industry to lie bed-ridden in the comatose state, though well known and thoroughly documented are still regrettably waiting for delivery of the prescriptions. These documents include, among others, the Economic Structural Adjustment Programme, Zimprest and the National Economic Development Plan.
“Post these, and more recently, the inclusive Government crafted a number of polices such as Short- Term Economic Recovery Programmes, the Medium Term Plan, the Industrial Development Policy and the Trade Policy.”
Some of the factors that have constrained the industry include low aggregate demand due to low disposable incomes across households has resulted in the manufacturing sectors operating below capacity.
Individual consumption is skewed towards basic commodities thereby negatively affecting the rest of the industry outside the value chain of basic commodities.
Lack of demand has also been worsened by the fact that Government has little to spend. In a country where the Government has little to spend, the economy goes into stagnation in the absence of stimulus package.
Lack of long-term loans caused by transitory deposits has also made it difficult for industry to obtain long-term credit for retooling and working capital.
With Zimbabwe’s debt at close to US$11 billion, this on its own raises the country’s risk profile and makes it difficult for companies to source offshore finance.
In recent years, Zimbabwe economy has also suffered from stiff competition from foreign trade leading to a situation where the country is literally running trade deficits with all its trading partners. This situation has been caused by different playing fields between local and foreign companies.
Minister Bimha said Government should find innovative ways to access funding to assist local companies under the proposed restructured “Dedicated Financial Institution” as provided in the Industrial Development Policy.
He added that his ministry had a fruitful discussion with the Finance Ministry where commitments were made to resolve some of the of the issues the industry wanted to be attended to in the Mid-Term Policy Review Statement.
Speaking at the same function, Bulawayo councillor Martin Moyo expressed concern over the closure of companies in Bulawayo, urging the Government to find lasting solutions.
Economist Eric Bloch noted Zimbabwe had an immense economic potential and could be among the biggest economies in Africa by 2020.
“Zimbabwe can be fifth largest economy in Africa by 2020 provided we do the right things,” Dr Bloch said. He said the country boosted extensive minerals yet to be extracted. He also commended performance of the agricultural sector, now dominated by black farmers, saying sustained efforts should be put in place to accelerate growth.
Online Reporter