HARARE,– The Confederation of Zimbabwe Industries (CZI) has called the government to offer tax breaks on importation of capital equipment, to enable local industry to retool.
CZI chief economist, Daphne Mazambani said 40 percent of the manufacturing sector has equipment older than 20 years leading to uncompetitiveness in terms of quality and pricing.
The manufacturing sector survey report shows that the proportion of larger firms with equipment older than 20 years is higher compared to small and medium sized companies.
“60 percent of large firms use machinery older than 20 years compared to 36 percent for medium sized firms and 31 percent for small firms. As a country if we want to compete at a global level we should take deliberate actions to lead towards refurbishing , and this can only be done after a certain level at which point the equipment should be decommissioned ,”said Mazambani.
Mazambani said that CZI had signed a memorandum of understanding with Turkey who is their supplier of equipment although the initiative is slow their machinery is available for industry at concessionary prices.
“Some of the equipment is actually 5years old if you compare it to 20 year old equipment it would be old to take but it’s probably new to our local manufacturers,”said Mazambani.
Results from the manufacturers survey show that companies using machinery which is 5 years or less are operating at an average capacity of 51,6 percent ,while companies using machinery older than 16 years are operating at an average capacity of 43,3 percent.
“47 percent turns out to be investment of which some of the investment is going into the replacement components expansion on capacity,”she said.
Companies using newer machinery are operating at a higher capacity than companies using older machinery. – Source