'Industry sinking deeper'

HARARE - Zimbabwe's industry is now worse off than it was upon introduction of the multi-currency system in 2009, the Industry and Trade ministry says.

Abigail Shoniwa, the ministry’s permanent secretary, yesterday said most local firms remained in severe distress with some having actually closed down despite adoption of the foreign currency regime — dominated by the United States dollar.

Since the dollarisation, Zimbabwean firms — still suffering a hangover from a decade-long economic recession — have found the going very tough. They face an acute liquidity crisis, high operating costs and limited lines of affordable credit among other challenges.

“We need to do something to stem the de-industrialisation the nation is going through,” Shoniwa told Parliament.

She said government must put in place measures to protect the local industry from an influx of cheap imported goods, particularly of Chinese origin, that have flooded the country.

“No country has prospered without industrialisation and as a nation there is need to take that bold decision to protect our own industries because as we speak the situation is not looking good,” Shoniwa emphasised.

Although Zimbabwe launched the ambitious Industrial Development Policy last year — envisioning a vibrant industrial and manufacturing base that anchors national economic transformation — manufacturing companies continue to operate way below 50 percent capacity.

Meanwhile, the country has pinned its economic growth hopes on the mining and agricultural sectors.

According to industry representative body Confederation of Zimbabwe Industries’ 2012 manufacturing survey, capacity utilisation in the manufacturing sector declined to 44,2 percent in 2012, from 57,2 percent previous year.

Shoniwa noted that the country must implement stiff measures which encourage value addition to local raw products as a way of reviving the moribund industry.

“We need to reflect and decide what is it that we want to do and as a nation we must take a stand that should not export our commodities until we add value to them,” she said.

Notwithstanding the formation of a coalition government in 2009, which halted Zimbabwe’s economic decline and hyperinflation, much anticipated foreign investment has not been forthcoming with potential investors seeking reassurance over an indigenisation law which compels foreign companies to sell their majority stakes to locals. - John Kachembere

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