admindeveloping geographically, a poor north and a rich and overcrowded south”.
The price of failure, the former Conservative PM said, would be that “our successors will reproach us as we reproach the Victorians for complacency about slums and ugliness”.
Whether Macmillan escaped reproach is debatable, as Zimbabwe through the Confederation of Zimbabwe Industries is about to assess the state of manufacturing sector.
No sacred cows or skeletons should be kept in the industrial body’s cupboard as the need to experience a real recovery not based on illusory is gathering momentum.
It certainly is of interest to the inclusive Government to be well furnished with the operational modalities to be employed in determining the capacity utilisation levels.
The arguments about the unbiased state of the manufacturing sector had been rumbling on since dollarisation and the instigators of the survey are in an unenviable position not to present unrepresentative facts and figures.
CZI’s ecosystem of stakeholders and terms of reference has to be strict. Their last survey presented a 57,3 percent capacity utilisation level which most of the players from the private sector dismissed with the contempt it deserved.
As long as term capital is hard to come by and with challenges continuing to mount we will always have doubts.
Bulawayo has lost more than 200 companies with balance sheets ranging from US$500 000 to US$5 million, power outages are becoming more regular, skills flight to neighbouring countries is continuing and harsh climatic conditions are being experienced each season.
On the other hand, the stand-off between erstwhile colonisers Britain and motherland have all been reversing the potential for recovery in Zimbabwe.
A survey which will be sufficient has to be an embodiment of manufacturing output, jobs data in the manufacturing sector, the asset base for operating companies and the nature of products mostly produced by companies operating above 50 percent capacity.
It should also incorporate the state of rail and road networks to industrial sites, insurance capacity by insurers, value added component or proportion in the produced goods, power distribution per unit.
Since there are regular power cuts, it is essential to get an appreciation of companies’ efficiency when electricity is available as research has shown that power outages have rendered some businesses defunct since their flow method of production cannot sustain bottlenecks in the supply chain.
Sometimes to understand the economics of Zimbabwe requires its captains of industry and decision-makers to be examined through photographs at business seminars and other events.
The objective will be to see who was pictured and which leaders were positioned relative to each other.
However, this analytical technique is of little help when influential captains of industry avoid such exercises as the manufacturing sector survey.
They can shun the process either through not sponsoring the crucial business survey or just appear to comment when the survey has been released when they were silent during the fact gathering process.
It is high time we shunned compromised statistics as the manufacturing industry is one of the most significant contributors to gross domestic product.
An ever widening current account deficit can be attributed more to manufacturing than any other industry as its co-efficient of determination to the overall economy is well documented.
The unacceptable import bill that is weighing us down quarterly can be attributable to manufactured goods imported mostly from South Africa and Asia.
There is hardly any meaningful mining and agricultural activity in cities such as Bulawayo, Gweru and Masvingo and the manufacturing industry is the greatest contributor to both employment and revenue for the cities.
To record a 57,3 percent capacity utilisation in the manufacturing industry when the backward linkage to the industry is grappling with recovery worries is a bit far fetched.
These linkages that include agriculture have been operating below 40 percent for quite some time now.
The only way the forthcoming 2013 National Budget, which is expected to be announced in the august House on November 15 is to be effective is when all grey areas which spur economic growth and development are exposed.
This can be done through an objective, thorough and comprehensive manufacturing industry report.
How is the Treasury boss expected to announce fiscal measures that will act as a protective mechanism when the stakeholders are unaware of the state of the industry?
The culture of “business as usual” mentality laced with incomplete statistics on the real performance of the economy can only do more harm to the potential of our economy.
We might not easily reach the US$100 billion GDP mark in our lifetime but we should at least see a significant improvement in the standards of our residents.
In Georgia, one of the fastest growing economies in the world, GDP has quadrupled only for the past decade but this was premised on increasing foreign direct investment.
The issue of the nature of products being produced cannot be overlooked in the current manufacturing industry survey.
I believe that CZI president Mr Kumbirai Katsande and his team supposedly appreciate that producing low value commodities at 70 percent capacity might be equivalent to a 40 percent capacity utilisation in the tobacco processing industry.
Such an argument comes in the wake of different nations whose trade relations with Zimbabwe are not consistent with envisaged macroeconomic framework.
China is the prime consumer of several resources which Zimbabwe has in abundance, and investment trends in 2010 shows China’s appetite for Zimbabwean resources is far from fading.
China is ranked fourth in terms of the size of mining investment approved by the Zimbabwe Investment Authority in 2009 after British Virgin Islands, Mauritius and South Africa.
China also ranks at number one in jobs created for each dollar invested. For each US$50 000 invested by a Chinese company, a job is created.
In comparison, BVI needs US$800 000, Mauritius US$330 000 and South Africa about US$170 000 to create a single job.
Such ratios paint a rosy picture, however, the relaxed labour systems in Chinese companies will not be good for future employment trends.
It is a wake-up call to all parties involved in the manufacturing industry survey that capacity utilisation is not only measured in quantities but also in quality.
This economy cannot have a manufacturing industry operating above 50 percent. The major reason for this is that we have a dominant informal industry that is evident by the vast numbers of vendors that line the streets in major towns.
This is simply because there is no activity in Msasa, Workington, Bristol Road in Gweru and other major industrial centres in the southern parts of the country.
Christopher Takunda Mugaga is an economist. He is also the Head of Research at Econometer Global Capital, a regional finance and economics research firm. He can be contacted via e-mail [email protected] or on 0772 340 353/0776 266 062
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