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Industrial base loss chokes economy

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ZIMBABWE’S economy recorded accelerated de-industrialisation in the past 30 years, blighting any prospects of making the country competitive in the region, as massive closure of major manufacturing companies relegated the country to an industrial wasteland.

While capacity utilisation of the few remaining manufacturing companies appears to be on a growth trajectory, studies show that several companies have closed shop in the country since 1992.

NYARADZO MUSHANYUKI

According to trade statistics, 90% of the country’s exports are currently concentrated in mainly unprocessed minerals and tobacco.

Albert Makochekanwa, a University of Zimbabwe economics professor and trade expert, told delegates attending a policy dialogue meeting organised by The NewsHawks and the Zimbabwe Institute for Strategic Thinking that the authorities should craft pro-business policies which promote re-industrialisation.

According to World Bank ease of doing business rankings, Zimbabwe is at number 140 out of 180 countries, making it difficult to do business with the country.

Makochekanwa said companies in Zimbabwe are facing challenges such as unavailability of adequate funding, unfavourable high taxation, and massive power outages which affect businesses.

“We export toothpicks instead of machinery for industries which produce productivity in our country. As a country, we are not manufacturing goods, even our shoes and watches we don’t manufacture. Those countries that are manufacturing are only benefitting from the AfCTA (African Continental Free Trade Area). Most products that are demanded by African countries are manufactured products,” Makochekanwa said.

“Twenty-eight years ago, our economy was diversified. Now there is no serious manufacturing. 83% of our exports are going to three countries and that is pathetic . . . So now when we go to the open market for AfCTA, no country in Africa wants these minerals (which Zimbabwe is exporting). Why? Because they themselves don’t want unprocessed gold but want gold necklaces. As for tobacco, they do not want the leaves but the sticks.”

Makochekwana revewied that in 2010 Zimbabwe had 18% manufactured products, in 2011 had 11%, which shows that we are not manufacturing.

“We can improve our businesses if our country manufactures goods. Our environment is not user friendly, it has to be improved, as companies are supposed to pay taxes. Even the machines which are being used by companies such as Hwange (Colliery) are old and if they want a part they pay for it and receive the part after 24 months because they are not manufacturing. For companies to invest, they need money which they borrow; retained profits are not enough,’’ Makochekanwa said.

From being the second most industrialised country in Africa at Independence in 1980, Zimbabwe’s economy has declined rapidly, with the country now ranking among the poorest economic performers. Agriculture, mining, and manufacturing have suffered from poor government policy choices, resulting in the collapse of each sector and massive unemployment.

As a result, most Zimbabweans are forced to eke out a living in the informal sector.
Bulawayo, a former industrial hub, has not seen serious manufacturing in the last decade, with countless companies collapsing.

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