ZIMBABWE’S industrial sector needs investment in new equipment and machinery to the tune of $7 billion for value-added production in order to be competitive on the international trading front, an industrial lobby group has said.
KUDZAI CHIMHANGWA BUSINESS REPORTER
This comes at a time when countries at the World Trade Organisation (WTO), of which Zimbabwe is a member has reached consensus on a trade facilitation agreement aimed at eliminating trade barriers and adding impetus to industrialisation.
The Trade Facilitation Agreement will support regional integration and offer good scope for African firms to diversify production and achieve greater value-addition.
However, Confederation of Zimbabwe Industries national vice-president Henry Nemaire said although the country was embarking on a value-addition programme for minerals, a lot more needed to be done in this regard for accelerated industrial development.
“There is need for value addition in many facets of our industry. There is need to capacitate industries in as far as value addition is concerned,” he said, adding that $7 billion would suffice for the country’s industry.
Nemaire said there was need for investment in equipment and new machinery.
“Those industries which have invested in new machinery have become more competitive and are not only producing for domestic markets but also for the global market,” he said, citing Delta Corporation, Nestle and Schweppes as examples.
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Zimbabwe once had a major and thriving timber producing sector, primarily located in Matabeleland North and Eastern Highlands, but the timber was exported without any substantial value-addition.
Experts argue that value-addition can bring about significant opportunities for growth in employment opportunities as well as more revenue inflows to the fiscus and significant downstream economic benefits for value-addition businesses.
Earlier this month, WTO director-general Roberto Azevêdo told the African Union Forum on Industrialisation and Inclusive Development in Africa that for the first time in WTO history, implementation of an agreement was now directly linked to the capacity of the country to do so.
Under the Trade Facilitation Agreement, not only was a country required to have the capacity before implementing the provisions, but technical assistance and support must be provided to help them achieve that capacity.
However, most African economies play a marginal role in the global market primarily due to narrow reliance on the production and export of unprocessed agricultural products, minerals and crude oil.
Economist John Robertson said regionally, most countries produced the same goods for export to developed countries and it would be a difficult task to reach regional agreements for production of certain commodities by certain countries.
Such fragmentation has been cited by the WTO as a key impediment to regional trade.
“We can’t sell nickel to Malawi for instance, or gold to South Africa expecting substantial trade volumes. With regard to Zimbabwe, the only regional agreements we really need right now are those aimed at bringing capital into the country. We need regional money coming into our industries,” he said.
Some preconditions of success in regional trade are universal political stability, a business friendly environment, bureaucratic capacity in decision-making and in designing, implementing and revising policies, and the coherence of these policies with other trade and development policies.
