Govt develops strategies for manufacturing sub-sectors

Government is developing strategies for various sub-sectors of the manufacturing industry as it looks at boosting production, lower imports and create jobs.

In an interview with Business Weekly yesterday, Industry and Commerce Minister Dr Sekai Nzenza, said significant strides have been made towards developing sector specific strategies meant to attract investors and boost domestic production.

“We are looking at strategies for value chains in leather, cotton, dairy, pharmaceuticals, steel, minerals and various other sectors,” said Minister Nzenza.

“In each sector, we would want to identify low hanging fruits and we will then build on that. The ultimate goal is to have a vibrant industry that creates jobs. For instance, we are already finalising the National Steel Strategy meant to revive steel sector.”

Renowned economist Professor Gift Mugano, said sector specific strategy would limit the risk of lack of clarity and generalised policies for specific sub manufacturing sectors.

“We definitely need sector specific strategies as opposed to global strategy approach. An industrial policy should only set the tone of what needs to be done. What is important now is to use approaches to support respective strategies including strengthening the value chains,” said Prof Mugano.

Zimbabwe’s manufactures are facing several challenges including subdued demand due to lower disposable incomes, foreign currency and water shortages among others. This has also been worsened by challenges related to coronavirus pandemic.

Closed borders affected imports and exports while lockdown restrictions including the curfew affected companies in terms of operating hours, which consequently affect the level of industrial production.

Subdued production has seen Zimbabwe spending billions of US dollars in importing various goods, some which can be produced locally.

Last year, industry’s capacity utilisation contracted to 36,4 percent in 2019, according to a survey by the manufacturing sector survey of the Confederation of Zimbabwe Industries (CZI).

Capacity utilisation measures the level at which a company is operating at, or the level at which it is using the installed capacity of its plant and equipment.  In its quest to become an upper middle income nation by 2030, the Government is pursuing various strategies to grow the economy and create employment.  For instance, last year, the Government launched the mining roadmap expected to grow mineral earnings from exports to $12 billion in the next three years.

Under the US$12 billion mining industry target, gold is expected to contribute US$4 billion, platinum US$3 billion, while chrome, iron, steel diamonds and coal will contribute US$1 billion.

Lithium is expected to contribute US$500 million while other minerals will contribute US$1,5 billion.

Already, a number of new mining projects are at various stages of implementation, while expansion of existing operations is underway. The Government is optimistic that the target is achievable given various projects already underway.

“While the mining industry is expected to anchor the revival of the economy, the role of sectors such as the manufacturing industry cannot be overlooked and it is critical that the government prioritise strategies that grow the industry and cut dependency on imports while at the same time grow exports,” an analyst with a local research firm said. -Herald