Private sector to invest US$2 billion

HARARE – Zimbabwe’s manufacturing and commercial sectors are regaining momentum with private investments worth over US$2 billion expected in the next two years, Industry and Commerce Minister, Dr Sekai Nzenza, has said.

Cabinet approved the roadmap on Tuesday, which outlines the plan to raise the manufacturing sector contribution to gross domestic product (GDP) from the current US$7,16 billion to US$8 billion by 2023.

The commercial sector is expected to grow into a US$5,2 billion sector compared to the current US$4,1 billion, on the backdrop of increased branch networks by the major wholesale and retail outlets.

The roadmap is in line with the Government’s development agenda of transforming Zimbabwe’s into an upper middle income economy by 2030 to be anchored on National Development Strategy 1 and 2.

The NDS1 runs from January 2021 to December 2025.

In an interview yesterday, Dr Nzenza, said a study by her ministry confirmed substantial planned investments by local corporates such Lafarge, Bata, Delta, Varum Beverages among others in the next two years.

“We looked at what the companies are planning in terms of expansion and most of them are excited about the future,” said Dr Nzenza.

“As such, there are a number of investments that are in the pipeline — US$2 billion — and these should enable us to grow the manufacturing sectors to US$8 billion industry by 2023.”

Twenty-three planned investments include US$545 million in the food, drink and tobacco sub sectors; US$32 million in the textiles, clothing and leather sub sectors; and a total of eight projects with an investment value of US$1,5 billion in the metals and electrical sub-sectors.

The Industrial Development Corporation of Zimbabwe (IDCZ), will play a pivotal role in the achievement of the Roadmap through availing loans to bankable new and existing industrial projects.

The planned Kanyemba and Tugwi-Mukosi agricultural projects, will also give the impetus to rural industrialisation and complement the National Devolution agenda.

Kanyemba has already been granted town status as it is set to house a major commercial hub to be created after the construction of a Y bridge at the mighty Zambezi River linking Zimbabwe, Zambia and Mozambique.

To enhance productivity, key enablers shall be put in place, including the provision of water supply and the relevant infrastructure, investment in the development and manufacture of information communication technology products.

“The enablers are quite critical if the Government is to realise the objectives,” economist Doug Forichi said.

“It’s good that the government has outlined what it is expecting but the only way these planned capital projects can be implemented is by making operating environment conducive.”

Last year, Zimbabwe industry’s capacity utilisation contracted to 36,4 percent, according to the Confederation of Zimbabwe Industries (CZI), largely weighed down by power and foreign currency shortages.

Capacity utilisation measures the level at which a company is operating at, or the level at which it is using its plant and equipment. The availability of foreign currency has since improved since the introduction of foreign currency auction system in June this year.

The majority of companies both large and small have been able to secure foreign currency through the Reserve Bank of Zimbabwe managed foreign currency auction system. – Business Weekly