BERNARD MPOFU
THE manufacturing sector’s contribution to the Zimbabwean economy drastically dropped to 9% in 2023 from an all-time peak of nearly 25% as the southern African nation’s industry becomes less competitive regionally, The NewsHawks has established.
Once regarded as one of the most diversified economies on the continent, Zimbabwe’s manufacturing has since the turn of the millennium suffered massive de-industrialisation as most businesses failed to retool due to costly borrowing, among other factors.
Experts say 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.
Busisa Moyo, chairperson of Confederation of Zimbabwe Industries membership committee, recently told delegates that the country requires policy which stimulates growth of the manufacturing sector, promotes growth and reverses de-industrialisation.
“The manufacturing contribution to GDP has fallen from 23% in the 1980-1989 period to 9% in 2023. How do we begin the journey back to 25% or US$10 billion?” Moyo asked.
He said the sector is facing competitiveness challenges due to the cost of doing business, limited (unstructured and unprogrammed) linkages with mining and agriculture and so many build-ups in “competitiveness”.
World Bank country chief economist Victor Steenbergen said despite facing several structural challenges, the country’s manufacturing sector is set to be one of the major beneficiaries of the African Continental Free Trade Area (AfCFTA).
“Zimbabwe public debt in LIEs [lower income economies] has risen and vulnerabilities remain high in one of the biggest potential beneficiaries of AfCFTA with +14.8% to GDP growth,” he said.
AfCFTA benefits for Zimbabwe, he added, arise mostly from trade facilitation and foreign direct investments.
The AfCFTA will link 54 countries with 1.3 billion people and a combined potential GDP of US$3.4 trillion into one market.
Tariffs are cut progressively giving least developed countries (LDCs) more time to meet targets than non-LDC countries. LDCs will achieve full liberalisation by 2034, while non-LDC countries will meet their target by 2031.
According to the World Bank, in the early 2000s, Zimbabwe used to introduce 600 new products in the export basket.
The rate of discovery (exports of previously un-exported products), however, has been declining and in 2019 it dropped to just five.
