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Industry feels coronavirus pinch

25 Mar, 2020 - 00:03 0 Views
Industry feels coronavirus pinch CZI carried a snap survey to evaluate the impact of the global pandemic on Zimbabwean businesses and the economy. The figures above show the impact of the global pandemic on the local manufacturing sector

The Herald

Ishemunyoro Chingwere Business Reporter

The local manufacturing sector has suffered a staggering 46 percent disruptions in supply chains due to the ravaging global health pandemic — Covid-19, a mini survey by the Confederations of Zimbabwe Industries (CZI) on the impact of the pandemic has shown.

The 2020 Fiscal Policy had projected Zimbabwe’s GDP to register a 3 percent growth, but the economy was already facing headwinds on this front due to other challenges chief among them the shortage of foreign currency and power outages.

The situation is expected to be further exacerbated by the new threat of Covid -19 also known as Coronavirus, which has hit most countries across the globe and has had a negative impact on the manufacturing and movement of goods within and across nations.

Some countries have prohibited people from unnecessary travel and movement. Factories have also been affected threatening the availability of goods and services.

Reports from Asian countries say key segments of the manufacturing sector have shut down in response to the lockdown orders issued by governments and the suspension of public transport services in many places.

Such developments will have a negative impact on the supply of cargo — both finished and raw materials.

Zimbabwe’s import bill averages US$6 billion per year and any disruption in supplies will be felt across the economy.

Among the countries that have been the worst affected is China — one of Zimbabwe’s biggest trade partners, South Korea, Italy, Spain and Iran.

In its mini survey initial results, CZI says some sectors of the economy have already been affected and more are set to feel the pinch.

“The local manufacturing sector will obviously suffer the effects of the pandemic since China is the largest source of raw materials and equipment for local firms,” reads the CZI findings.

“A mini survey by CZI on the impact of the pandemic on local industry has shown that 46 percent of local firms have already suffered disruptions in supply chains.

“Zimbabwe will experience major dislocations in exports and imports as the virus spreads and countries adopt restrictive responses that curb manufacturing activities,” said the representative body.

It also goes on to quote the United Nations Economic Commission for Africa (ECA) which projects Africa’s economic growth rate for 2020 to fall from a previous forecast of 3,2 percent to 1,8 percent with the Central African sub region being one of the most highly affected area.

The report also notes that with South Africa, the country’s biggest trade partner, having announced a lockdown and closed more than half of its 72 borders over and above a raft of restrictive measures, Zimbabwe will have a huge impact.

On Monday, South African president Cyril Ramaphosa announced a package of extraordinary measures some of which might result in a slowdown in the movement of cargo. Zimbabwean manufacturers import at least 36 percent of their raw material requirements from South Africa.

At least 28 percent of Zimbabwe’s exports go to the southern African country.

There are also fears that Zimbabwe will feel the impact of a commodity price decline as it is heavily reliant on gold, chrome and platinum.

The foreign currency situation could be further affected by disturbances in the marketing of tobacco where China is one of the biggest buyers of locally produced tobacco.

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