Golden Sibanda
Senior Business Reporter
THE Confederation of Zimbabwe Industries says the manufacturing sector remains stuck in a deep crisis despite an average increase in capacity utilisation.

CZI president Mr Kumbirai Katsande said key stakeholders in the economy have not “behaved or reacted” in equal measure to the level of the industrial crisis.
He said this was because the local supermarkets were stocked to the brim with imported goods, despite capacity utilisation gradually rising to about 57 percent now from less than 20 percent in 2008.

“We need to have demonstrated acceptance that the manufacturing industry is in a crisis,” said Mr Katsande. “If we accept it means we are saying let’s do something about it,”

The CZI president, at the helm of Zimbabwe’s biggest and most influential industrial lobby since May, made the remarks before a Parliamentary Portfolio Committee on Industry and Commerce.

Mr Katsande said industrial capacity utilisation had improved to an average of 57 percent, but there still was a huge disparity between companies operating at optimum levels and those still struggling to raise output.

He said there was need to move away from the fixation on capacity utilisation at the expense of striving to ensure industrial competitiveness.
“Dollarisation has changed the rules of engagement. Agriculture needs to perform at international level. Business (also) needs to perform at international level. We are operating in a ruthless and unforgiving environment,” he said.

Lack of competitiveness, said Mr Katsande, was the reason why Zimbabwe imports 65-70 percent of its foodstuffs, which gobbles up billions of dollars per annum. Local industry slumped into a deep abyss brought about by almost a decade of economic instability that                             decimated about 50 percent of the Gross Domestic Product.

Manufacturing is one of the four main pillars of this economy (over 12 of GDP) together with mining, agriculture and tourism. It has close links with agriculture as it consumes and processes over 60 percent of its produce.

The majority of local firms without links to multinationals have found it close to impossible to raise funding to retool and ensure they produce at low cost.
Firms that fail to retool, said CZI, would be left behind while the country’s import bill would remain unreasonably high.
In its proposals to rescue the future of manufacturing in a fast globalising world, CZI says it wants strong measures to be  pursued to attract foreign direct investment.

But the industrial body said the country needed to quickly constitute an inter-ministerial taskforce to look at ways of improving the country’s Global Doing Business rankings as a way to ensure an appeal to foreign investors.

Such efforts would help improve industrial and agricultural competitiveness through acquisition of modern technology for efficient, low-cost optimum production.
Local industry, which requires US$2 billion (according to  the Ministry of Industry and Commerce) to retool, is also battling a cocktail of other economic challenges.

The constraints including shortage of electricity, the high cost of utility charges, transport as well as elusive and expensive short-term funding.
CZI expressed some concern at the (at times) selective inclusion of its input into policy formulation, as this defeated the purpose of consultations.