‘Target specific investors’

industrial production due to the liquidity crisis and an expanding import bill, which has added pressure on the national trade deficit as the country now relied on imports.
Zimbabwe’s widening trade deficit — excess of imports over exports — due to ballooning imports and dwindling exports, stood at US$3,6 billion in 2012 and US$989 million in just the first three months of the year.

CZI president Mr Kumbirai Katsande said it was time Government reacted swiftly to protect industry and allow it some time to restart production.
“We are not asking for wholesome protection. These are not very large percentages of protection we are calling for. Ask the developed countries such as the US, Japan and the UK how they developed theirs,” he said.

Industry was not asking for envelope protectionism at the expense of innovativeness, efficiency and use of old equipment to produce goods at a high cost, which raises inflation.
Mr Katsande said the Government should put in place measures to attract targeted investment in key economic sectors of agriculture and manufacturing whose fortunes depended on each other.

“Government should target potential investors, ask them to increase their investment. Why not visit these people and ask them: ‘How can we help you increase your investment?’ There is need for targeted investment promotion road shows, targeted to specific investors not investment countries.”
He said the investment should also be specific to key commodities in agriculture and manufacturing and energy, so that progress and success — or failure — could be measured accurately.

CZI believed that a country such as Zimbabwe — still smarting from the effects of a decade of hyperinflation and economic challenges due to the effects of illegal sanctions — could not just open up its economy.

Mr Katsande said looking at the economic challenges the country encountered in the last decade, there was need for some protection as the “economy is still young and yet to resolve a lot of issues”.

Financial limitations to retool or invest into new capacity has resulted in the country importing such products as onions, various green vegetables, tomatoes, chickens, dairy products and potatoes — among others — yet the country had excellent conditions to produce all these products with relative ease at a low cost.
The CZI said the country was using billions of dollars on imports yet it was not generating much fresh money due to stagnant or low exports.

According to the Ministry of Industry and Commerce, Zimbabwe’s industry requires an estimated US$2,5 billion to recapitalise, but Government has no capacity to provide such huge resources.

Government has set aside funding under the Distressed Industries and Marginalised Areas Fund and Zimbabwe Economic and Trade Revival Fund, but this was not enough and would be mostly suitable for existing ventures.

Zimbabwe will have to find ways to prop up industry as there is likely to be little help from multilateral institutions that do not believe in building local capacity, especially for the export market.

The World Bank, for the record, would not dabble in initiatives seeking to promote exports after outgoing chief economist for Africa, Shanta Devarajan, described similar attempts as a total failure.

“We tried it in Tanzania in the 1970s and 1980s and it was a colossal failure,” he said. “The company could not even export a single pair of shoes,” he said. But the WB has been blowing its trumpet about Africa’s rapid growth, seen until 2020, but on the back of bullish global prices in raw commodities.