A DELEGATION of leading industrialists left the country at the weekend to engage European Union officials amid concerns that the first half of 2014 is expected to be tough for manufacturing sector.
By Business Reporter
CZI president Charles Msipa said the group would negotiate with officials from the Western bloc as the country seeks more foreign direct investments.
The 15-member delegation left the country at the weekend and will spend a week in Europe where they will visit Germany, Belgium and
other EU countries.
The EU imposed targeted sanctions against President Robert Mugabe and other government and Zanu PF officials.
“The situation was very tough for many in the last quarter of 2013 due to reduced demand on the domestic market due to liquidity problems and the influx of imported products. There is really no change between December and now. It will be similar for the first half of this year,” he said.
Msipa said although it would be tough this year, policy measures announced by Finance minister Patrick Chinamasa last month are expected to stimulate growth.
Chinamasa announced the 2014 national budget on December 19.
Msipa said the continued use of the multicurrency system would build confidence and the resumption of the lender of last resort function by the central bank enables banks to increase lending to the manufacturing sector.
The country has one of the lowest FDI inflows, below $500 million, with critics saying more reforms are required for it to become one of the leading investment destinations.
The sector requires $5 billion for working capital requirements and has not been able to attract much funding.
The sector’s challenges include working capital requirements, high competition from imports, power and water supply challenges as well as high labour costs.
The manufacturing sector is operating at a capacity that is below 40%, with 700 companies having closed shop, according to a report by the National Social Security Authority.
CZI will next month hold a workshop to discuss the new government’s economic blueprint Zimbabwe Agenda for Socio-Economic Transformation, which was crafted last October.