Industry capacity utilisation clocks 47.4%

CAPACITY utilisation in the manufacturing sector jumped by 13.1 percent to 47,4 percent this year largely driven by the measures the Government has taken to protect local industry.

Economic observers view this as a significant increase towards revitalising the manufacturing sector when compared to the 2015 capacity utilisation record of 34,3 percent.

“Capacity utilisation has jumped significantly by 13.1 percentage points from 34.3 percent in 2015 to 47.4 percent in 2016,” the Confederation of Zimbabwe Industries (CZI) said in its manufacturing sector survey report released on Wednesday.

“This is a very positive development largely resulting from the moves on the part of Government to protect local industry and the import priority list.”

Among the raft of measures, the Government in June promulgated Statutory Instrument 64 of 2016 to control imports.

SI64/2016 removes several goods from the Open General Import Licence. Industry and Commerce Minister Dr Mike Bimha has said products listed under SI64/2016 would only be imported for commercial purposes in situations where local industries fail to meet national demand.

Some of the listed products are coffee creamers, building and hardware materials, dairy products, bottled water and furniture items.

CZI highlighted in the report that only 20,7 percent of respondents viewed SI 64 as positive. “This seems to indicate that the overriding concern of industrialists is the uncertain macro-economic environment.

“This conclusion is supported by the fact that 77,1 percent of respondents rated policy instability as negative or very negative for the economy,” it said.

“In addition 73 percent feel that the Government and/or Business Membership Organisations (BMOs) are not improving in private- public dialogue consultation with the private sector to address economic challenges.

“Sixty percent of the respondents do not know of any public-private dialogues or consultations conducted by Government or BMOs in the past 24 months to address economic challenges.”

However, CZI said it was imperative for the Government and the private sector to accelerate existing initiatives for broad based macro-economic stabilisation.

Corruption, policy instability, access to finance, competition from imports and low demand for domestic products, were cited in the report as major impediments affecting business.

Since the introduction of the multicurrency system in February 2009, the Government and the private sector have targeted to increase capacity utilisation to competitive levels.

Experts have stressed the need for Zimbabwe to improve its domestic production to meet market demands and for export. — @ okazunga