'Doers, stand up and be counted'

HARARE - Outgoing Confederation of Zimbabwe Industries (CZI) president — Charles Msipa — whose tenure ends this Thursday believes there are many thinkers who need to leave their comfort zones and help to turnaround the economy whose sorry state is summed up by rapid de-industrialisation.

Below are the excerpts of the interview with Senior Assistant Editor Guthrie Munyuki.

Q: How much a challenge is the rapid de-industrialisation to both CZI and government?

A: De-industrialisation undermines the premise of our economic development objectives that of value-addition of primary commodities that we produce, it results in company closures, job losses financial and economic distress of firms, banks and individuals, poor revenue performance and condemns us to being perpetual consumers of finished products produced by others and exporters of primary commodities whose demand and pricing fluctuates.

Following the adoption of multiple currencies in 2009, the rebound that was experienced in capacity utilisation levels in some sub-sectors in manufacturing had moderated by 2012 and the agenda and initiatives of CZI since then, including its engagement with policymakers and other stakeholders, have focused on the imperative to arrest de-industrialisation.

The impact of de-industrialisation is felt by all Zimbabweans and all of us — over and above the government and CZI can and should contribute to arresting de-industrialisation.

Q: What it is at the heart of this de-industrialisation and to what extent did your executive try to influence change to this slide?

A: Based on the results of the CZI 2014 annual capacity utilisation survey, which reflected a decline in average capacity utilisation from 39,6 percent in 2013 to 36,3 percent, some of the major constraints (which are inter-related) to increasing capacity utilisation cited by respondents were as follows;

- Inadequate access to affordable short and medium term funding

- Antiquated machinery

- Competition from imported finished products

- High cost of doing business

- Infrastructure deficits-erratic power and water supplies.

As noted previously, the number one priority for CZI since 2012 has been the competitiveness and overall performance of the manufacturing sector.

Our collective, ongoing efforts over the period range from internal, firm level measures to improve innovation, productivity and efficiencies, active participation and input and recommendations into policy processes on a wide-range of matters including the following;

- Collaborating with Bankers Association of Zimbabwe and Chamber of Mines Zimbabwe to undertake a private sector mission to Europe in January 2014 to make the case for closer economic and commercial engagement between European Union countries and Zimbabwe in order to promote greater levels of capital inflows and Foreign Direct Investments (FDIs) into Zimbabwe — which would have a bearing on access to affordable funding.

- Collaborating with Employers’ Confederation of Zimbabwe in submitting recommendations to policymakers on reforming labour laws to facilitate job creation, improved productivity and competitiveness.

- Detailed recommendations into policy documents such as annual budget statements, monetary and fiscal policy reviews, government commissioned studies on Cost and Ease of Doing Business, Imports and Special Economic Zones.

Relief measures extended by government to certain sectors, including clothing and edible oils, have contributed to improvement in local production in these sectors during the past six months.

- Spearheading value chain projects in specific sectors to tackle root causes of low productivity

- Participation by CZI members as co-chairpersons of strategic clusters on the ZimAsset coordination committee.

- Ongoing engagements and dialogue with key development partners, including World Bank, IMF, African Development Bank

- Detailed ongoing engagements with key infrastructure providers such as Zesa Holdings, and with regulators such as Zimbabwe Energy Regulatory Authority and Environment Management Agency.

Q: If you were to give a time frame, how long would it take industry to go back to its optimal utilisation and what would be the key drivers?

A: Some key drivers and enablers to a turnaround in manufacturing sector and the economy in general include the following;

- Creation of a stable, predictable policy environment which attracts greater capital inflows including FDI into various sectors as well as into upgrading infrastructure

- Disciplined and urgent focus on improving the ease and reducing cost of doing business in Zimbabwe including labour laws that promote job creation, productivity and enhanced competitiveness of local firms

- Sustained improvement in agricultural production to ensure adequate feedstock into agro-industrial sector

- Stronger levels of accountability, transparency and corporate governance in our private and public institutions and a zero tolerance to corruption

- A formalised framework for collaboration by all stakeholders including government, business, labour and civil society built on an agenda for inclusive, sustainable growth and development.

The time frame for a revival in the manufacturing sector depends on the urgency, intensity and focus with which all stakeholders apply themselves to act in a coherent, consistent manner to implement the critical enablers.

Q: Successive executives, including yours, were consistent about a change of mind-set by both government and players to preserve business but there has been further deterioration instead, what is wrong with our approach?

A: Change in mind sets and behaviours in all sectors, private and public, is difficult, and has to be grounded on a painstaking process of building consensus on fundamental reforms and is bound to encounter resistance.

We all find it easier to continue operating within our comfort zones even when the environment has changed. I should note that we have an increasingly productive dialogue with economic policymakers and are in fundamental agreement on key enablers for economic turnaround.

Many in the private and public sectors are frustrated at the snail’s pace at which we implement reforms. We have no shortage of thinkers and talkers and it is time for the doers to stand up and be counted.

Many of us are “eternal optimists” and take the view that the magnitude and severity of the threats to our national economic well-being as well as the promise and potential for us to achieve greater economic prosperity for all provide sufficient motivation for each and all of us to coalesce and rally behind an agenda for economic renaissance-even though we should be prepared to encounter some turbulence and pain in the short-term.

Q: How influential have you, CZI, been in trying to facilitate ease of doing business in Zimbabwe and is this something that government has done?

A: The government commissioned and adopted the recommendations of a study on improving the ease and reducing the cost of doing business that was conducted by Zimbabwe Economic Policy Analysis and Research Unit into which CZI and other private sector players provided input in December 2014.

The recommendations are very wide-ranging, including reforms of our labour laws to align with labour laws in the region and improve competitiveness of Zimbabwean firms, review of licensing and permit fees levied on firms at national, state enterprise and municipal levels, review of utilities charges.

It is vital that all of us in the public and private sectors redouble our energy and focus on this important initiative to improve competitiveness of our firms and to promote the re-industrialisation agenda.

Q: Zimbabwe business delegations, including the CZI, attended the EU/Africa business summit, did this summit help in unlocking investment opportunities?

A: CZI attended the EU/Africa business summit in 2014. In a world of competition for investment resources and given our long history of isolation and disengagement from the global economy, it is valuable for Zimbabwe to promote itself as an investment destination and to dialogue with prospective investors.

I believe the steady stream of scoping visits to Zimbabwe by prospective investors is in response to outreach efforts to promote investment in Zimbabwe that have been undertaken in the past by Zimbabwe Investment Authority as well as various private sector players, including CZI.

Q: Part of the concerns on the current Zimbabwean investment climate centre on indigenisation. How fruitful have been your efforts in the engagements with government?

A: I should acknowledge at the outset that over the last four years, we have an increasingly productive and fruitful dialogue with policymakers and we provide input into various policy initiatives — much of which is taken on board in key policy documents such as the annual national budget statement.

We do not always agree on everything, but we seem to be agreed on fundamental economic reform measures that are necessary.

We have provided input to policy makers on indigenisation and economic empowerment, which would be inappropriate for me to dwell on in detail at this stage.

Suffice to say, as a nation we have an opportunity to harmonise our objective to attract foreign direct investment with our objective of economic empowerment.

Q: Having served CZI as its president, how much benefit do you derive from the tenure?

A: It has been a singular honour and privilege for me to have collaborated and associated with many more experienced industrialists, policymakers, development partners and other stakeholders and to have had an opportunity to contribute input into creating a more enabling environment for the manufacturing sector as well as on some of the pressing business and economic issues of the day, and so I have gained in knowledge and experience more than I have given.

The ultimate “benefit” for myself and many colleagues in CZI will be to experience the fruits of our voluntary toil in the form of a revival of the manufacturing sector contributing its share to local production, employment creation, value-added exports, revenues and wealth-creation in a growing economy in Zimbabwe.

Q: Are you ending your tenure a satisfied man and what is it that you would encourage the incoming executive to do, which you might have not achieved?

A: I owe a huge debt of gratitude for the unwavering support, advice, wisdom, guidance and encouragement of colleagues in the outgoing executive committee as well as to the members of the national council of CZI.

I am satisfied that my colleagues and I have invested significant effort into promoting initiatives that create an enabling environment for the manufacturing sector — but have a deep discontent about the current trend of de-industrialisation.

We should allow the incoming executive the space to define priorities, but I look forward to supporting them as they bring a fresh perspective and renewed vigour to the agenda to enhance competitiveness in local manufacturing.

Comments (2)

VaMsipa you know the real truth so do not make people join a sinking ship. Just get out of the system with your few $'000,000 and soon you will also b in the comfort zone.

Garikayi - 13 May 2015

A conducive business environment is where government puts in place policies that attract FDI and where government remains just a referee rather than this situation where the powers-that-be are both players (incompetent players for that matter) and referee at the same time. All government should do is to derive benefits by way of the increased tax base from a thriving economic environment, not now where the CZI is told to `remove a car wheel using a screwdriver` and being told `zvinoita chete`.

Mutongi Gava - 13 May 2015

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