Mirrors Rapid Deindustrialisation
As the Southern African Development Community (Sadc) Industrialisation Week unfolds in Harare, the irony in the background is Zimbabwe itself – how the country has been rapidly de-industrialising, plunging the economy into turmoil and millions into poverty.
No country has been able to lift millions out of poverty without industrialisation, according to the United Nations Economic Commission for Africa.
The current event is the largest public-private platform and consultative body for industrialisation in the Sadc region.
The Sadc secretariat in partnership with Zimbabwe, the Sadc Business Council and the Confederation of Zimbabwe Industries are hosting the 7th Annual SADC Industrialisation Week from 28 July to2 August 2024 in Harare The event is being held at the Harare International Conference Centre under the theme “Promoting Innovation to Unlock Opportunities for Sustainable Economic Growth and Development Towards an Industrialised Sadc.”
The Sadc Industrialisation Week provides a platform on an annual basis for Sadc member states, the private sector, international partners, policymakers, researchers, SMEs, financial institutions, and civil society to share experiences on driving industrialisation and economic transformation in the region.
The week-long event is features seminars, meetings, workshops, a gala dinner, exhibitions, and site visits to some selected manufacturing facilities and industrial hubs in Zimbabwe.
The key focus areas include mineral beneficiation, agro-processing, pharmaceuticals, infrastructure development, women and youth entrepreneurship, and African Continental Free Trade Area enterprises.
It aims to intensify multi-stakeholder engagement in implementing the Sadc Industrialisation Strategy and Roadmap 2015-2063 with a key focus on reviewing progress and challenges in executing the region’s industrialisation strategy, as well as sharing success stories and solutions for developing robust regional value chains across priority sectors within Sadc.
The conference comes at a time when Zimbabwe has been undergoing dramatic closure of companies and deindustrialisation.
Thousands of companies have been closed in Zimbabwe since 2000. Some of the big names which have closed or left Zimbabwe include local, regional and multinationals, as well as family-owned businesses such as Anglo American plc, Lonmin Plc, HJ Heinze, BP, Shell, Harven Manufacturing, Rio Tinto, David Whitehead, airlines such as British Airways, Lufthansa, Qantas, and many others, banks like Barclays and Standard Chartered, and now top global accounting firms like Deloitte and PwC.
These left or closed due to the harsh operating environment, policy contradictions and inconsistencies, including land reform and indigenisation, and mismanagement and corruption.
From being the second most industrialised country in Sub-Saharan Africa after South Africa at independence in 1980, Zimbabwe’s economy has declined rapidly to a point where the country ranks among the poorest economic performers in the region.
The country has now become a case study of how not to run an economy.
The three pillars which had underpinned Zimbabwe’s once-vibrant economy, namely, agriculture, mining and manufacturing, have suffered greatly from poor government policy choices, resulting in the near collapse of each of the sectors and massive unemployment.
As a result, an estimated 90% of the Zimbabwean population is unemployed and is forced to eke out a living in the informal sector, mostly through vending of second-hand clothes and other basic items.
Millions have fled the country to neighbouring countries like Botswana and South Africa, and overseas to the United Kingdom, Australia, Canada and the United States.
With regard to manufacturing specifically, the sector had all but collapsed by 2015, as companies either folded or relocated to escape the country’s harsh economic climate.
The decline of the Zimbabwean manufacturing sector started in the 1990s and continues unabated.
Bulawayo, for instance, which used to the industrial hub of the nation in the 1940s, hence its nickname “Kontuthuziyathunqa” (place where smoke billows out of industries) has now been reduced to economic rubble due to deindustrialisation.
The Belmont industrial area, for instance, is now full of churches and other non-manufacturing activities.
Industrialisation is arguably the most certain route to rapid, sustained, and sustainable economic development, for economies with large populations.
“No country has lifted millions of people out of poverty without industrialising,” the UN Economic Commission for Africa says.
“Successful industrialisation is the missing link for the structural transformation and sustained economic growth that countries in Southern Africa so greatly desire.
“The contribution of manufacturing value added to gross domestic product (GDP) in the subregion of Southern Africa is very low.
“The average ratio of manufacturing value added to GDP in the subregion in 2018 was 11.8 per cent, with country ratios ranging from 4.8 per cent in Angola to 32 per cent in Eswatini. Highskill, technology-intensive manufactured goods constitute less than 30 per cent of exports from the subregion, with most economies still highly undiversified and dependent on a few primary commodities for revenue.
“Immense opportunities exist for industrialisation in Southern Africa through value addition to commodities, beneficiation, and subregional integration. For Southern Africa to industrialise successfully, it is critical for the subregion to upgrade its productive capacity, promote investment in modern industries, develop and strengthen value chains, and deepen opportunities for subregional integration and trade.
” For this industrialisation to be successful, the commission says, inclusive, and sustainable, the necessary conditions will need to be created for the numerous industrial policies and strategies to take off.
These include addressing the infrastructure deficit and infrastructure bottlenecks; adopting sound macroeconomic policies including on taxation and expenditure, governance, education, competition, trade, and investment; promoting technological learning and capabilities; and utilising surpluses from traditional revenue streams to build an export oriented manufacturing sector.
