THE Confederation of Zimbabwe Industries (CZI) has said 2014 is a critical year for the industry to recover from an accelerated decline in recent years, its president has said.
Tarisai Mandizha,Business Reporter
According to the manufacturing sector survey, the industry’s capacity utilisation plunged to 39,6% in 2013 from 44% recorded in 2012.
The decline in capacity utilisation was attributed to erratic power supply, influx of cheap imported goods, antiquated machinery and high labour costs, among other things.
In an interview with NewsDay, CZI president Charles Msipa said the 2014 National Budget had set the tone for stimulating activity in the manufacturing sector although funding remained a challenge. Finance minister Patrick Chinamasa last month proposed a cocktail of measures to turnaround the sector, which at peak contributed a fifth of the economy.
Critics say the underperformance of local industries has resulted in Zimbabwe becoming a net importer.
“We need to point out, if there are areas which need critical attention for the revival of the local industry. The year 2014 is the critical year for us to start to at least arrest the decline experienced in 2013,” Msipa said.
Msipa said the Finance minister on December 19, 2013 presented a Budget which contained many position pronouncements for the industrial sector.
“One of the policies presented is the re-introduction of export incentives, but what exactly are the incentives and how do we operationalise?
“We need to put the details on how it should be implemented,” Msipa said.
He said the other policy which was critical to attract investment was the setting up of special economic zones which he said needed proper consultation and research to ensure success.
“The first order of business is to understand the positive policy in the Budget that needs to be attained to actually be able to understand them,” he said.
He, however, said the other critical area for the industry was the shortage of capital in the market.
Msipa said there was need to create an enabling environment to attract capital and the public and private sector should double their effort to attract capital on Zimbabwe.
“What is happening is the shortage of capital, ever since we adopted the multi-currency system. It is very important that the public and the private sector should double efforts to attract capital,” Msipa said.
Government has since the introduction of multiple currencies in 2009, put various initiatives aimed at reviving struggling companies.