THE Confederation of Zimbabwe Industries (CZI) has said capacity utilisation is slightly lower than expected due to the current cash challenges, but will rise on the back of an increase in agricultural output.
BY TARISAI MANDIZHA
Capacity utilisation is a measure of industry’s use of installed productive potential.
Capacity utilisation was at 47,4% in 2016 from 34,3% in 2015, as the manufacturing sector increased output to plug the gap following import restrictions by government.
In July, the government promulgated Statutory Instrument (SI) 64 of 2016, which restricted imports on 43 products, that have local equivalents to boost local production.
In an interview with NewsDay, CZI president Busisa Moyo said the first quarter performance for the manufacturing sector was promising despite challenges.
“The performance for the manufacturing sector in the first quarter is promising but there are few challenges which the sector is facing due to cash, which are shortage of raw materials and depressed demand,” Moyo said.
Capacity utilisation in the post-dollarisation period peaked at 57,2% in 2011, before sliding to 44,2% in 2012, 39,6% in 2013 and 36,3% in 2014.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
The country is currently facing cash shortage which is crippling the performance of the economy.
The liquidity crunch has left companies unable to pay their workers in cash and foreign suppliers, driving many people out of business. Moyo said capacity utilisation was expected to improve on the back of improved agriculture season.
“The capacity utilisation is slightly lower than normal due to cash challenges but it is expected to improve on the back of improved agriculture production,” he said.
The country is expecting a bumper harvest this year following the introduction of command agriculture, a scheme which was introduced in August last year, to ease food shortages as well as stimulating production levels in industries.
The scheme is targeted to producing 2,2 million metric tonnes of maize.
