In­dus­try op­ti­mistic of growth

The Sunday Mail (Zimbabwe) - - FRONT PAGE - Tan­yaradzwa Ku­taura

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.”

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