Manufacturing sector on the rebound

LOCALLY manufactured goods now account for over 65 percent of products being sold by retailers, while export receipts jumped by 49 percent to US$1,8 billion during the first three months of the year.

Latest data from the Ministry of Industry and Commerce shows that the shelf space taken up by local products has increased significantly, while export earnings soared despite headwinds caused by the coronavirus.

Access to foreign currency from the Reserve Bank of Zimbabwe (RBZ)’s weekly foreign currency auction, closure of land borders and increased power supplies were some of the factors that caused the rebound.

Industry and Commerce Permanent Secretary Dr Mavis Sibanda told The Sunday Mail that local manufacturers had become increasingly innovative.

“The country has made notable achievements in different sectors, which has a positive effect on the social and economic effect on the standards of living of Zimbabwean citizens,” she said.

“Clothing and textile, food sector, non-metallic mineral sector (bricks and cement), pharmaceutical, paper and printing and publishing sectors witnessed major growth for the past three years. The advent of the Covid-19 has resulted in companies ramping up production due to closure of the borders, which affected the regional value chains and importation of lots of products. In this regard, the shelf occupancy for local manufactured products increased to 65 percent. Further, the pharmaceuticals and personal protective equipment (PPE) sectors registered an increase in capacity utilisation from 5 percent to 45 percent.”

Between 2018 and 2020, the manufacturing sector witnessed increased production in the clothing, textile, food, non-metallic mineral (bricks and cement), pharmaceutical, and paper, printing and publishing sub-sectors.

A snap survey conducted by The Sunday Mail last week showed that local brands dominated shelf space for flour and edible oil products. It was also the same pattern for rice and pasta brands, including teas, washing powder, bathing soap, biscuits, breakfast cereals, tissues and juices.

“There has been some great innovation in the manufacturing sector, witnessed in the production of PPEs and pharmaceuticals in response to the Covid-19,” said Dr Sibanda.

“Companies, tertiary institutions and SMEs were heavily involved in the production of washable and medical face masks, hand sanitisers, sanitising booths, disinfectant tunnels, disposable gowns, surgical isolation gowns and swabs. According to ZimTrade outlook of January-March 2021, the country’s exports stood at US$1,8 billion, which is a 49 percent increase.

“These covered manufactured products such as cotton (1 percent), tea (2 percent) and unmanufactured tobacco (8 percent).

“Clothing, footwear and textiles exports went up from US$9,2 million in 2020 to US$13,6 million in 2021, representing a 50 percent increase in the sector’s exports. The increase was attributed to manufactured cigarette exports, which recorded a 2 percent increase from US$11,6 million to US$11,9 million in 2021. Household furniture exports also increased by 2 percent from US$4 million in 2020 to US$4,1 million in 2021.”

The Reserve Bank of Zimbabwe (RBZ), she added, had allocated over US$900 million to local manufactures over the first three months of 2021, with the bulk of the funds going towards procurement of raw materials.

This has helped local companies ramp up production over the last few months.

“Confirmation from the RBZ is that US$536 million was allocated for raw materials, while machinery and equipment were allocated US$216 million and US$98 million to the retail sector. The other sectors include the pharmaceuticals and medicines, which were allocated US$74 million, paper and packaging were allocated US$25 million. This has assisted companies to ramp up production.”

According to the Confederation of Zimbabwe Industries (CZI) Manufacturing Survey Report of 2020, there was increased demand for local products due to economic stability.

“Industry captains indicated that they hope that local demand will increase due to inflation deceleration, import restrictions, new supply chains with local industries especially in the mining sector and they expect to sustain the industrial linkages going forward,” reads the report in part.

In his recent State of the Nation Address, President Mnangagwa said productivity was set to increase during the second half of the year.