Capacity utilisation surges Minister Mangaliso Ndlovu

Michael Tome, Harare Bureau
Zimbabwe’s manufacturing sector capacity utilisation grew 3,1 percentage points to 48,2 percent in the 12 months to August 2018, the Confederation of Zimbabwe Industries (CZI) manufacturing sector survey for 2018 revealed.

The survey, launched last Friday, was conducted in 10 industrial sectors including food stuffs, beverages, tobacco, clothing, footwear, furniture, paper (printing), chemicals, non-metallic minerals, transport and equipment.

By August 2018, average capacity utilisation of high performing industrial companies was 80 percent, with drinks, tobacco and beverages sub-sectors realising exceptional capacity utilisation levels as high as 93 percent.

Capacity utilisation for companies such as those involved in production of foodstuffs, beverages, tobacco, wood and furniture and other manufactured goods had average of above 50 percent.

Presenting the 2018 manufacturing sector survey report CZI chief economist, Tafadzwa Bandama, said the growth in capacity utilisation was driven by SI 64 of 2016 by the Government to prop up the local manufacturing sector.

“Capacity utilisation rose on account of import substitution and export promotion policies that were implemented starting from 2016,” said Mrs Bandama.

However, by November, capacity utilisation had slumped by 6 percent to 42 percent attributed mainly to suspension of SI 122, foreign currency deficiencies, fluctuating currency value and policy inconsistencies on part of the Government.

“Compared to August 2018 capacity utilisation in November 2018 declined by 6, 2 percentage points to 42 percent.

“The decline in capacity utilisation was mainly a result of, policy inconsistency (suspension of SI 122), shortage of foreign currency, waning confidence in the economy due to lack of a clear policy direction on currency issues,” she said.

Capacity utilisation is a key statistic derived from a survey as it informs about company and country’s industrial performance.

Average capacity utilisation is used for sub-sector statistics, which is actual output divided by potential output.

Weighing in on the 2018 companies performance, the Minister of Industry and Commerce Nqobizitha Ndlovu, encouraged firms to grow their production with a greater intent of maximising their potential in export market in order to grow the country’s export earnings and to avert the crippling foreign currency shortages being currently experienced in the country.

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