Zimpapers Logo

Victoria Ruzvidzo Business Focus
Zimbabwe is losing billions of dollars through the importation of basic goods and services which ordinarily we should be able to produce here.
This is a sad reality which needs to be expeditiously addressed.
The whole matrix towards positive national growth lies in ensuring that there is industrial activity within our borders to curb cash leakages from this economy through imports.

Indeed the greatest atrocity one can commit against our illegal sanctions-riddled economy is to engage in business activities that externalise the limited cash resources we are generating from internal revenue streams.

And for this reason, the Government needs to be applauded for its strategic foresight in green lighting the Chisumbanje ethanol project.
Only yesterday, the Minister of Power and Energy Development Dzikamayi Mavhaire said the project was saving the country US$9 million per month in fuel imports.

Imagine how much would be saved if the figure grew to 85 percent blending.
Fuel forms arguably the largest input cost of most industries and households, hence any saving in this regard would have far-reaching benefits.

If it could be done as a sanctions-busting strategy during the Unilateral Declaration of Independence, I see no reason why the same concept cannot apply now.

It is most unfortunate that some have made it their preoccupation to trash the project when the benefits are there for all to see.
Of course there is need to consider fears of creating a monopoly in Green Fuel but these fears were allayed this week by minister Mavhaire.
The sector is open to any player who would want to partner Government.

Projects such as the Chisumbanje ethanol needs our total support as a country.
The direct and indirect benefits will certainly impact the economy phenomenally.

When I browsed through Green Fuel’s investment blueprint that states the roadmap to 2018 recently, the statistics I came across were amazing. I found some of the project’s goals astounding. For instance they intend to achieve:
45 000 hectares of cane
450 million litres of ethanol per year
Creation 36 500 jobs
Generation of 120 megawatts of electricity
Construction of Condo Dam to beef up water supply from Save River to begin as early as this year
Massive set of corporate social responsibility anchored on empowerment projects for the community
This is obviously a very ambitious list of goals, but judging by the work currently being done at Chisumbanje, there is no doubt that with a relevant supportive policy climate, the Green Fuel team of engineers has the zeal and commitment to deliver.

Zimbabwe is famous or is it notorious for having a huge list of many projects which have been threatening to take off for years, particularly in the energy sector but they are yet to see the light of day. But now that the bureaucratic bottlenecks which threatened to strangle the project during the tenure of the inclusive Government have been dealt with through a decisive election outcome, our expectations are that this industry will soar to greater heights and deliver more dividends to the nation in the form of additional jobs and community agricultural infrastructure development.

On the part of Government, there has to be an action-oriented approach to policy formulation to encourage the growth of this sector and to maintain the country’s regional pole position in ethanol production.

A key priority is to open up the use of higher ethanol blends such as E85 throughout Zimbabwe so that local motorists are given priority in ethanol benefits ahead of foreigners.

South Africa, Mozambique, Malawi and Zambia are some of the examples of economies where ethanol is set to play a major role in the energy sectors and without ethanol plants of their own, it is quite clear they will soon be jostling for supplies from Zimbabwe.

In the case of South Africa, mandatory blending has been introduced in that country to encourage investors to set up shop. Furthermore, we cannot be blind to the fact that for a long time we have been an importing economy and projects such as Green Fuel challenge those among us who have been benefiting from the death of our local industries, through imports.

Indeed, some fuel barons will put up a spirited fight against this positive national development to protect their lofty positions in society.
Chisumbanje ethanol project is a game changer, not only in terms of the contribution to GDP but also in terms of giving this country the much needed confidence boost that tells us — as Zimbabweans- we can do it, we can steer our economy towards growth.

This project is a sustainable home grown solution towards energy security.
Beyond this, the infrastructural transformation in the form of cane plantations, the plant itself and social service facilities around Chisumbanje, speak volumes on the impact ethanol has and will have, on this country.

What is worth reflecting on as we ponder the way forward economically, is that this is hard cash that could have easily been exported through fuel imports to promote economic activity in other countries, but instead, the money has been retained in circulation within our borders to ensure that the community of farmers, plant engineers, plantation workers and small to medium enterprise operators in Chisumbanje remain economically active.

Statistic show that more than 5 000 people are currently in employment while over a thousand households have been successfully allocated horticultural plots, effectively transforming a previously commercially marginalised region into a hub of economic activity.
Checheche, the nearest growth point, has all the signs of a major commercial capital in the making.

A vibrant construction sector is in business contracted in housing development while food processing factories and social service centres are taking shape to cater for a growing consumer base with a steady monthly income.

Beyond the socio-economic impact generated through Chisumbanje ethanol is the reality of a widening revenue base for Government through PAYE volumes and other taxable avenues from the downstream industrial activity.

The ethanol project has a supplier list of over 800 companies for products ranging from agricultural inputs in commercial cane growing, industrial equipment maintenance and safety clothing.

Green Fuel’s investment blueprint highlights intentions to also create community-owned cottage industries whose viability will be connected to the supply needs of the ethanol project.

This aspect will lead to the formation of a self-sufficient micro economy through the spider-web effect by ensuring that cash introduced into this region as salaries and procurement finance is locked up in circulation, effectively uplifting the general living standards of this community.

The facts above point to one major undeniable development underlying a positive change of economic tides in 2014: Chisumbanje is an example of the economic success that can be achieved when public–private sector partnerships are structured in a smart manner which allows Government to play its oversight role without compromising the private sector’s capacity to deliver commercially.

However, as we navigate our way out of the woods, more policy formulation still need to be done to fully reap the rewards from the ethanol sector.

Each country needs a niche, a unique offer to perform favourably on the global economic stage and with ethanol, Zimbabwe has the potential to package a fuel solution desperately sort for by the Sadc region whose priority presently is immunity from international oil price increases.

So 2014 is about turning the tide and with projects such as Chisumbanje ethanol, yes we can.
Government’s foresight in identifying this investment as key in the operationalisation of Zim- Asset needs to be followed through with rigorous policy support measures to immunise the ethanol sector from any form of economic mischief especially by those hell bent on keeping us in biblical Egypt while Canaan is beckoning.

In God I Trust!

Feedback: [email protected]