Matabeleland opportunities can leverage economy

due to serious funding challenges and viability problems.
In Bulawayo alone, which was traditionally Zimbabwe’s manufacturing hub, a number of companies such as Tregers Group, Merlin, Cold Storage Company, National Blankets, G&D Shoes, Radar Metal, Hubert Davies, Dunlop, and Datlabs have either significantly downsized or closed shop.
The de-industrialisation, which has occurred, is reflective of the country’s poor economic performance over the past decade.
However, the cluster initiative can help to ensure that the region benefits from its comparative economic advantages.
The Government, through the five-year policy has proposed to promote industrial growth in the country’s respective regions according to their key strengths.
Minister of Industry and Commerce Professor Welshman Ncube sums this up in the policy document.
“Whilst the cluster concept was briefly dealt with in the previous Industrial Development Policy document, this new IDP will include and prioritise it as one of the key strategies to drive the current IDP
“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,” he said.
Comparative advantage relates to the activity which a country or region can produce at the lowest comparative cost, relative to other nations.
Similarly, regional and international trade facilitates the exchange of goods and services between the various geographical locations.
This comparative advantage can arise from natural resource endowments such as minerals.
The advantage may also arise from a special skill resident within a community, which confers a particular advantage to that community.
Investment opportunities in Bulawayo, Matabeleland North and South lie in the areas in which these provinces have comparative or competitive advantage, but these, however, can only be maximised to the extent that the region or province takes full stock of its resource endowments and exploit them to the maximum.
The cluster initiative is reflective of a “regional policy” strategy, which is typically intended to boost economic activity in a specific geographical area and not an entire country and, typically, is in worse economic shape than nearby areas.
Some of the key economic activities in these three provinces are tourism, animal husbandry (ranching), mining and manufacturing.
In terms of agriculture, for example, Matabeleland South and North and Bulawayo Metropolitan provinces have comparatively less rainfall than national average.
Farming in this region is thus limited to drought-resistant crops such as cotton, sorghum, millet and rapoko and livestock production.
Matabeleland North and South also have extensive potential for cattle farming. Matabeleland North and South provinces are drier and have large tracts of land and extensive ranches, which are conducive for beef production.
There is also extensive potential for timber production. Matabeleland North is endowed with teak hardwood forests while Matabeleland South boasts mopani forests.
The indigenous woodlands in these provinces are, however, only being traditionally exploited for fuelwood and pole supply and a limited amount is utilised for construction and furniture for local, regional and international, markets.
In terms of mining, Matabeleland South and North are endowed with gold, silver, coal, chrome, limestone, mica and nickel.
Some of the specific investment opportunities in these provinces include coal exploration mining and processing; re-capitalisation of the Hwange Colliery; and coal bed methane exploration and mining.
There is also potential for investment in the energy sector in respect of that region.
Some indicated projects in this respect include the Lupane Methane-Gas Project, Hwange Methane Gas Project, development of the greenfield Batoka Hydro Project, and expansion of Hwange Thermal Power Station.
Given the niche competitive advantages of these provinces noted above, there is                 therefore need to appropriately establish strategic companies (industrial clusters) that take advantage of the respective resource base.
Such a strategy to boost the economic competitiveness of the Matabeleland region should be backed, for instance, by strategies like offering firms incentives to provide jobs in the region, such as soft loans, grants, lower taxes, cheap land and buildings, subsidised labour and worker training.
Likewise Reserve Bank of Zimbabwe Governor Dr Gideon Gono in his January 2012 Monetary Policy Statement proposed the establishment of an offshore financial hub — the International Financial Centre (IFC) — in Victoria Falls.
He indicated that the IFC would be set up as the growth nucleus of the Matabeleland province.
The IFC, as in other countries such as Botswana, Seychelles, Malaysia and Switzerland, is associated with huge capital inflows into the resident country.
To this extent, if successfully set up it can revive Matabeleland as the country’s economic hub driven by industries such as manufacturing, mining and cattle ranching.
A regional policy focus on the Matabeleland region should correct some of the critical problems facing the region, especially with regard to high unemployment and labour market rigidities.
Simple theories of supply and demand would suggest that firms will move to areas of low wages and high unemployment to take advantage of cheaper labour and surplus workers, or that workers will move away from such areas to where more and better-paid jobs exist.