Region continues to witness steady growth Dr Utete Wushe

Over the last 10 years, the SADC region has put more emphasis on industrialising, as it is the catalyst of any country’s development. As the bloc’s summit draws nearer, The Herald Reporter, Wallace Ruzvidzo (WR), spoke to Industry and Commerce Permanent Secretary, Dr Thomas Utete Wushe (TUW), where he highlighted some of the milestones reached in terms of the region’s industrialisation agenda formerly launched in 2014.

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WR: The SADC Summit theme speaks of the importance of industrialisation. How far has the region gone in industrialising, especially considering the agenda was launched in 2014?

TUW: Thank you for giving me this opportunity.

Let me start by highlighting that indeed, the SADC Industrialisation Agenda was launched in 2014, within the broader context of the SADC Industrialisation Strategy and Roadmap (2015-2063). When Zimbabwe took over the bloc’s chairmanship in 2014, it was quite instrumental in front loading the industrialisation pillar and this led to the high-level adoption of the Strategy by the Heads of State. Basically, the strategy seeks to promote structural transformation of regional economies.

We are set to assume the SADC chairmanship this year again and at the margins, we have a specific event on industrialisation, and this is going to be the seventh event since its inception, the SADC Industrialisation Week.

This is coming under the theme: “Promoting Innovation to Unlock Opportunities for Sustainable Economic Growth and Development towards an Industrialised SADC.”

I am pleased to say that SADC region has made significant progress in industrialisation. We have witnessed a strong focus on value chains development across key sectors such as agro-processing, pharmaceutical, mineral beneficiation, consumer goods, capital goods, financial and infrastructure sectors. Within these, there has been a growing emphasis on innovation and regional collaboration. Here in Zimbabwe, we are excited to host the upcoming 7th SADC Industrialisation Week, which will be a great platform to showcase these achievements and discuss the exciting opportunities ahead for a truly industrialised region.

The region continues to witness a steady growth in terms of these areas:

  • Manufacturing contribution to GDP: Of course this varies across countries and the largest by value-added are food products, other non-metallic mineral products and beverages. The region has developed a Regional Model Policy Framework to support the growth and development of the regional leather value chain;
  • Employment: Several member States showed positive manufacturing employment growth.
  • Manufactured Exports: These have been on the rise and manufactured goods remained the largest export category.
  • Manufacturing Trade: Manufacturing trade value in the SADC region has also been increasing. This underscores the continued significance of intra-regional trade and industrial collaboration for economic growth.

WR: How important is industrialisation to Zimbabwe and the region at large?

TUW:  Industrialisation in Zimbabwe has been a central focus of the Government’s economic development agenda and is a key pillar of Vision 2030. The country has a long history of industrialisation, with a diverse industrial base that includes manufacturing, mining, agriculture, and services sectors. Industrialisation is a crucial driver of economic growth, export diversification, value addition, technology transfer, job creation, and poverty reduction in Zimbabwe and the region Industrialisation is important for:

  • Economic growth: Industrialisation plays a crucial role in driving economic growth by creating new industries, generating employment opportunities, and increasing productivity. By expanding the industrial sector, Zimbabwe can diversify its economy, reduce reliance on agriculture, and stimulate overall economic development.
  • Export diversification: This allows us to produce a wider range of goods and services for export, thereby diversifying our export base. This reduces dependence on a few primary commodities and provides opportunities for increased trade with global markets for instance through the African Continental Free Trade Area (AfCFTA)
  • Value addition: It enables us to add value to their raw materials and agricultural products, leading to higher profit margins and increased competitiveness in the international market. By processing raw materials locally, Zimbabwe can develop a more resilient and sustainable economy.
  • Technology transfer and innovation: Industrialisation fosters technological advancements and innovation, which can drive productivity gains and improve competitiveness.
  • Job creation and poverty reduction: Industrialisation creates job opportunities in the manufacturing sector and its related industries, leading to higher incomes and improved living standards for the population.

WR: How have efforts been going in the industrialisation of Zimbabwe as the President continues to emphasise its need?

TUW:  When His Excellency the President, Cde Dr ED Mnangagwa assumed office in 2017, he embarked on a visionary path, to revive the local industry and commerce and to grow the economy into an upper middle-income society by 2030.

In line with the NDS1 thrust, he mandated the Ministry to promote a robust industrialisation and commercial sector agenda, by championing the thematic area of “Moving the Economy up the Value Chain and Structural Transformation”.

Through the Whole of Government approach, we have been able to spearhead a number of programmes and initiatives:

  • Value addition and beneficiation
  • Rural industrialisation;
  • Promotion of standards and quality assurance,
  • Economic empowerment initiatives
  • Consumer protection,
  • Export development,
  • Resuscitation of strategic and anchor companies across value chains,
  • Facilitated the expansions of existing and creation of new firms.

Following a robust engagement with the private sector, in 2018, we came up with the Industrial and Commercial Sector Roadmap (2018-2023). The roadmap targeted to increase the growth of the sector to an US$8 billion industry by the year 2023, from a US$6 billion industry.

I am pleased to say that, we successfully achieved and surpassed our target.

I will not hesitant to say that we will continue to witness significant growth in these sectors due to the new investments, improved value addition and beneficiation by firms, the opening of new companies, resuscitation of closed ones, and expansion by existing firms.

WR: Which sectors contributed to the growth?

TUW:  The major contributors to the manufacturing and commercial sector GDP growth were the food, drink, tobacco, textiles cotton, leather, wood, timber, and furniture sectors.

Other sectors were chemicals, pharmaceuticals, paper, packaging; metals and electricals. The motor industry and the retail and wholesale trade sectors also contributed to the growth.

The manufacturing sector’s capacity utilisation has been on an upward trend over the past years and is currently at 53,2 percent.

Manufacturing sector employment: — The labour force survey shows that manufacturing sector employment so far is contributing about 272 000 jobs.

The increase in local capacity utilisation is also evidenced by the shelf space occupancy of domestic products. Statistics have shown that this has improved from 53 percent in 2018 to 80 percent in 2023 to date, thus representing a 45 percent, marginal increase.

The manufacturing sector’s contribution to GDP cumulatively increased by 44,9 percent from US$15,54 billion (2009 – 2017) to US$22,51 billion (2018 – 2022).

The increase in local manufacturing sector productivity contributed to the huge leap in manufactured exports from US$207,35 million in 2020 to US$448,7 million in 2023, and the major leading sectors are processed food, manufactured tobacco and packaging.

Regarding upgrading and new establishments, firms in the manufacturing sector continue to undertake new investments and expansions of existing plants.

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