‘Power cuts pose serious threat to industrial capacity utilisation’

Sikhulekelani Moyo, Business Reporter
Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland Chapter chairperson, Mr Mackenzie Dongo has said for the manufacturing sector to attain 70 percent capacity utilisation this year, there is a need for constant power supply.

According to the latest survey of trends in the manufacturing sector, capacity utilisation in the manufacturing sector is forecast to reach 70 percent this year, with production continuing to increase with more investment flowing into factories.

Last week, the Confederation of Zimbabwe Industries (CZI) released the 2022 Annual Manufacturing Sector Survey results which revealed large-scale firms recorded the highest capacity at 63 percent, a rise from 62,7 percent in 2021.

Mr Dongo said load shedding is posing a serious threat to industrial capacity utilisation.

“One of the major challenges that need to be urgently addressed if we are going to be talking of increased industrial capacity utilisation is that of unplanned power cuts.

“Load shedding is posing a serious threat to industrial capacity utilisation,” said Mr Dongo.

“The cost of our power per kilowatt is also another challenge as it is still on the higher side given the fact that electricity is now charged in United States dollars for commercial entities.”

He also said there is a need to promote the agriculture sector as it is the major supplier of inputs in many processing plants.

“There is a need to invest more in agricultural value chains so as to substitute imports of raw material inputs. It is important to highlight the success of the wheat value chain which has seen the country surpassing our record wheat production,” he said.

“This comes with a lot of downstream benefits and import substitution and there is a need to zero in on agricultural value chains like soya, maize, tomatoes, sunflower et cetera used by our industries as raw materials so as to increase capacity utilisation for agro-industries.”

Mr Dongo also said local authorities need to revisit and open up more space and incentives for local industries to promote industrialisation and more specifically to regain Bulawayo’s glory of being an industrial hub.

“Bulawayo is supposed to be the major industrial hub but its currently the opposite, may be the local authority needs to revisit its investment policy and open up more space and incentives to allow for industrial utilisation and uptake in Bulawayo as we are witnessing other major industries setting up plants in other towns and cities.

“Maybe the fast-tracking of the industrial local development plan eight by Bulawayo City Council will open up more space for industrial uptake and use,” he said.

The other issue which Mr Dongo raised includes retooling challenges as he said high bank interest rates remain very unattractive for borrowing.

“This may be a result of speculative tendency which usually leads to umbrella policy decisions that will also punish genuine industrialists,” he said.