The Sunday Mail
Zimbabwe’s industrial growth trajectory began on a positive trend under President Emmerson Mnangagwa’s New Dispensation, and a foundation is being laid for growth, the head of an influential lobby group has said.
In an interview last week, Confederation of Zimbabwe Industries president Mr Sifelani Jabangwe said 2018 had ushered in industrial re-birth.
The first half of 2018 saw industry record an average five percent increase in capacity utilisation from 45 percent to around 50 percent.
The figure had been below 50 percent for the past five years.
Capacity utilisation stood at 57,2 percent in 2011, it slowed to 39,6 percent, 36,3 percent and 34,3 percent in 2013, 2014 and 2015, respectively.
It, however, increased to 47,4 percent in 2016 before tumbling to 45,1 percent last year, and is now experiencing a rebound.
Reflecting on these figures, Mr Jabangwe said: “In 2018, there were few companies that closed. In fact, new companies opened whilst others expanded.
“For the first time in years, our worry was not on company closures and retrenchments, but concentration was on the opening of businesses.
“This year was different because we saw investments rather than company retrenchments that is why we are saying the policy measures being put by Government must continue to be pro-manufacturing.
“Some people are against supporting the industrial sector, it is only when you support industries that the economy will grow.”
Mr Jabangwe said speculative behaviour and failure to interpret measures prescribed by the fiscal and policy reviews had impacted negatively on industrial performance.
“From the start of the year up to September, the manufacturing sector had a very good performance with some sectors reporting performances above those of 2017 by margins of between 20 to as high as 50 and 60 percent,” he said.
“After September we then experienced foreign currency shortages which affected business drastically. This resulted in prices going up with some commodities being in supply of which the situation was taken advantage of by speculators who are selling products at higher prices.
“The trend also reflects that policy measures can affect business performance and confidence because it is only after there was an announcement of changes to the Fiscal and Policy Review that we saw this situation deteriorating. It is not that the measures were bad, but there was need for thorough interpretation.”
Mr Jabangwe said despite troubles of September, industrial capacity utilisation remained above 50 percent.
“The average capacity utilisation is still steady and we expect product volumes to continue increasing.
“We lost a lot of momentum in the period September to date. It may have been necessary to have an opportunity to cool off because there was almost a state of overheat when we look at the performances we experienced up to September.”
Mr Jabangwe expressed confidence in the 2019 National Budget, saying the measures prescribed were poised to improve industry.
He, however, appealed to Government to come up with urgent contingent measures that would improve industry’s access to foreign currency.
“The challenges we are having are those of foreign currency. The situation was worsened after the separation of Nostro and RTGS because the net generators of foreign currency do not have to sell their currency,” said Mr Jabangwe.
“Those that require foreign currency to import raw materials do not have a mechanism to trade with these foreign currency generators because it is now illegal to trade.
“So what is going to happen is unless a measure is put in place to allow companies to trade, some companies will struggle to stay afloat.
“In the 2019, we believe if Government maintains the austerity measures the country is heading for good times. Like what the President has said before, the darkest hour is before dawn.”