SI 64 begins to bear fruit

Oliver Kazunga, Senior Business Reporter
THE Confederation of Zimbabwe Industries (CZI) says the implementation of Statutory Instrument 64 of 2016 will push manufacturing sector capacity utilisation up by average 10 percent by the end of the year.

SI 64/2016, which removes several goods from the Open General Import Licence, was promulgated by the Government in June to control imports into the country.

The move followed industry concerns that a number of companies were facing stiff competition from cheap imported products, which posed serious operational challenges on the local manufacturers.

CZI vice president Mr Sifelani Jabangwe yesterday told Business Chronicle that SI 64/2016 had already started bearing positive fruits on the performance of some companies whose products are listed under the legal framework.

“Capacity utilisation in most companies as a result of SI 64/2016 will improve by at least 10 percent by year end. Already, we have noted some direct positive impact on the performance of some companies especially those with products listed under the SI,” he said.

In 2015, capacity utilisation in the manufacturing sector closed the year at 34,3 percent declining from 36,3 percent the previous year.

CZI has highlighted that operational constraints such as lack of working capital and stiff competition from imported products were some of the major challenges drawing back efforts to stimulate productivity in the manufacturing sector.

As a result of SI/64 of 2016, remarkable performance is noted in industries such as those in the battery manufacturing and agro-processing sectors whose capacity utilisation has increased to about 100 percent.

Mr Jabangwe said CZI as an industry representative body was also prioritising the importation of raw materials rather than finished products.

“In cases where certain raw materials required by industry are not locally available we would want priority on the importation of raw materials so that companies can improve on their performance as raw materials can be imported,” he said.

Mr Jabangwe said the first half of the year was a bit tight in terms of operational efficiency for most businesses due to the current cash crisis.
“Despite the current cash challenges, the use of plastic money has a bit improved the ease of doing business for companies,” he said.

Since April the country has been experiencing cash shortages and the Reserve Bank of Zimbabwe has encouraged the transacting public to make use of plastic money and electronic payment systems to ease the challenge.

The monetary authorities have blamed the current cash crisis on massive externalisation, low exports and hoarding of the United States dollar, which was in high demand because of its strengthening value against regional currencies.

@okazunga