The government says getting the Zimbabwe Iron and Steel Company (Ziscosteel) back on line is critical, as it can generate $1 billion in annual export revenue.
BY TATIRA ZWINOIRA
In August, the government said it had secured a $1 billion investment for Zisco from the Chinese company R&F Properties.
Responding to questions over the state of the Ziscosteel project at the sixth edition of the ZimTrade Annual Exporters’ Conference yesterday in Harare, Industry and Commerce minister Mike Bimha said the manufacturing and services sector contributes less than 10% to exports.
He said getting Ziscosteel operational would go a long way in ensuring that the contribution from the manufacturing and services sector increases.
“The point I just wanted to mention is that when Ziscosteel was on stream it was the single biggest contributor in terms of exports, therefore, it also stresses the point that we should ensure that we get Ziscosteel back on line. At the moment, in terms of foreign currency, we need about $350 million a year for imported steel products. As such, we can save $350 million if Ziscosteel gets back on line,” he said.
“But more importantly, once you get Ziscosteel back on line the production exceeds our own demand, therefore, over and above the $350 million, it will generate another
$1 billion in terms of exports, so it is very critical that Ziscosteel gets back on line.”
He said they were finalising the arrangement with the R&F Properties.
The investment from R&F Properties is expected to, reportedly, result in one million tonnes of steel being produced in the next 18 months with a potential for the investment to rise to $2 billion upon completion of implementation stages.
The potential $1 billion in exports, should Ziscosteel become operational, is on the back drop of exports contributing 60% of the foreign currency earnings.
However, of those exports, minerals and tobacco contribute over 80% of those total export earnings, while manufactured products and services contribute less than 10%.
Bimha said government’s drive to re-capacitate the manufacturing sector would be boosted if Ziscosteel became operational.
The once steel giant has attracted a number of suitors, but none has been able to inject money into the company.
In 2011, Indian firm, Essar, got into a similar arrangement to invest about $750 million in Ziscosteel, but later pulled out of the in mid-2015 due to squabbles including mineral rights and other technicalities.