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Covid-19 exposes need for self-reliance

26 Mar, 2020 - 00:03 0 Views
Covid-19 exposes need for self-reliance Once the industrial sector is strong and producing enough goods for the local market, like cooking oil, worries on the movement of imports from countries like South Africa in times of tragedies like Covid-19 will vanish.— File picture

The Herald

Lovemore Chikova Development Dialogue

One of the most important lessons for Zimbabwe from the spread of the coronavirus that causes Covid-19 is the importance of self-reliance.

Of course, there are other important issues which include working on the surveillance systems and the health system in general to be able to cope with such diseases more efficiently.

While more resources need to be channelled to the health system, it is also important that the revival of industries is speeded up to ensure the country can rely on internal supply systems in times of such calamities.

So far, the best preventive measure for the spread of Covid-19 has been proved to be social distancing.

Social distancing also involves isolating oneself.

It will obviously be somehow difficult and rather painful for self-isolation when the country depends mainly on imports for various basic commodities.

Everyone needs to be out there to fend for their families, especially crossing borders to purchase the much-needed commodities.

In fact, the need for travelling will always arise as long as the local industry is not strong enough to support local retailers to stock the basic commodities.

This is where the main concern has been for Zimbabwe, with questions being asked if the country will be able to make it without importing goods from neighbouring countries in the event it institutes a complete lockdown.

The retail sector’s over-reliance on imported goods, especially from South Africa, has been badly exposed by the outbreak of Covid-19.

There is a possibility that South Africa can end up instituting measures that make it difficult for the continued movement of goods from that country if the virus infections go out of hand.

Zimbabwe should be fully prepared for such a scenario, which seems to be a reality, although heavily dependent on how the virus progresses.

What all this points to is the need for Zimbabwe to strengthen its own production systems and start focusing more on the revival of local industries.

Government has banned the movement of people out of Zimbabwe, and into Zimbabwe for foreigners, but if the virus’ effects escalate, more measures might be called for.

It is a fact that economies that heavily depend on others are bound to be affected when such a virus breaks out, due to the measures put in place to mitigate its spread.

What is important for Zimbabwe is to focus more on import substitution, as a way of becoming self-reliant in terms of the supply of goods to the local market.

Boosting the domestic manufacturing capacity, especially of basic goods, will in the future ensure no worries when economies of neighbouring countries are shut down for whatever reason.

Import substitution industrialisation will hedge the country against effects of such pandemics, but will also contribute to the economic development agenda.

This means that local industries should be capacitated to produce competitive goods and services that cut the heavy dependence on imports.

The rationale is to set up and empower local industries which provide manufactured goods for the domestic markets, thereby cancelling the need to use scarce foreign currency for imports.

The foreign currency saved can be directed to strengthening the health system so that when eventualities like Covid-19 occur they can be dealt with efficiently.

Import substitution industrialisation entails coming up with strategies that are inward-looking to develop local industries so that they are able to supply internal markets previously served by imports.

Although the concept has taken long to take root in developing countries since it was suggested in the 1940s, import substitution industrialisation is still being viewed as a better alternative.

It has the capacity to ensure countries become self-reliant and be able to easily mitigate against the effects of calamities that disrupt trade.

This industrial development concept brings with it a radical shift from the importation drive that has characterised Zimbabwe’s economy and those of many developing countries.

Attraction of new technologies can help fast-track the revival and establishment of new industries that can produce goods which are being imported.

It is crucial to note that the recent establishment of the Zimbabwe Investment and Development Agency (ZIDA) is one such move by Government towards being self-reliant.

ZIDA is expected to attract investment in areas that will result in the revival and establishment of industries that can make the country self-reliant.

The newly appointed ZIDA board led by Mr Douglas Munatsi should make its priority to attract investors who have an interest in setting up industries in the manufacturing sector.

This is because most the imports are dominated by goods that can be manufactured locally, provided there is a strong industrial base.

ZIDA should be able to offer appropriate incentives that attract the investors on a win-win basis, for the benefit of both the investors and the country.

Once the industrial sector is strong and producing enough goods for the local market, worries on the movement of imports from countries like South Africa in times of tragedies like Covid-19 will vanish.

People get apprehensive because they are fully aware of the country’s reliance on imports to sustain the local market.

A complete shutdown of South Africa, for example, will cause problems for Zimbabwe because of the heavy dependence that exist, especially in the supply of essentials.

With import industrialisation substitution, there should be addressing of fundamental structural constraints which include lack of economic diversification, low productive activities and poor infrastructure.

Any investor, especially in the manufacturing sector, is attracted by the availability of human capital, a strong infrastructural base, including factory shells, roads and ports.

These issues give confidence to the potential investors that they can be able to do business and reap their profits.

Of course, Government has been working tirelessly to revive local industries and strengthen the country’s industrial base, but the advent of Covid-19 and its attendant effects should further spur the efforts.

The desire for Zimbabwe to build its industries has always been there and these efforts have been feeding into the Southern Africa Development Community’s Industrialisation Strategy and Roadmap 2015-2063.

This desire by the Zimbabwean Government has been manifested in a number of efforts aimed consolidation the country’s industrial progress.

The Zimbabwe National Industrial Development Policy (2019-2023) is one such blueprint that can be effectively used to enhance the country’s manufacturing sector.

The policy’s broad aim is to make Zimbabwe self-reliant when it comes to the production of goods and services that are required on a daily basis.

The Industrial Development Policy is premised on efforts to open the country for business, modernise, industrialise and promote investment.

What is important is also to develop linkages across key sectors of the economy such as agriculture, mining, manufacturing and services.

The industrial sector is already anchored on the above sectors, which also have sub-sectors that can play an important role in import industrialisation substitution.

The key anchors of the Zimbabwe National Industrial Development Policy are clearly biased towards investment and innovation.

It aims at developing and strengthening of industrial value chains, agro-based industrialisation, mineral beneficiation, export-led industrialisation, commercialising of intellectual property and heritage/natural advantage-based industrialisation.

Other areas of concern include information communication technology-led industrialisation, emerging industries and start-ups, backward linkages with small and medium enterprises, anchor industries and industrial clusters and industrial parks and innovation hubs.

There is need for more work to be done on the revival of the industries considering the challenges that confront the country because of the downturn in the economy witnessed in the past two decades.

Most industries now have antiquated machinery and equipment, there is lack of affordable and long-term funding for industry and there are foreign exchange bottlenecks to procure raw materials.

Robust policies that support the industrial development policies are needed to enhance high utility costs and competitiveness.

But there are still vast opportunities available for the country to exploit in its quest to develop local industries, and these include a highly-skilled labour force and a number of mineral resources that can be used for the development of industry.

Ultimately, and in light of Covid-19, domestic resource mobilisation is needed to fund local industrialisation in an effort to produce quality goods that can be worth substitutes for imports.

Covid-19 is obviously expected to change the face of doing business in the world, and Zimbabwe cannot be an exception.

There is no choice but to develop and strengthen local systems to be able to mitigate the effects of Covid-19 and any other calamity that may strike the world in future.

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