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Chronicle Reporter
Zimbabwe’s manufacturing sector has been hard hit by an influx of cheap imports and is now operating at an average of 36 percent capacity utilisation, the deputy minister of Industry and Commerce, Chiratidzo Mabuwa has said.Addressing guests at the Zimbabwe International Trade Fair Business Conference yesterday, Mabuwa said capacity utilisation is projected to drop by a further 30 percent by year end as a number of companies in the sector are either closing, downsizing or retrenching.

The most affected sectors, she said, included food, pharmaceuticals, leather, construction, clothing and textiles, to mention a few.

“At at the peak of industry in 2000, Zimbabwe used to produce 7,000 high quality products for its domestic and export market. However, for the past four years, that is the new multi-currency era, there has been a proliferation of imported goods and commodities on the local economy which has had a direct effect on the declining capacity utilisation within industry. The capacity utilisation is now projected to drop by a further 6 percent to an overall low of 30 percent by end of 2015,” said Mabuwa.

Zimbabwe was hit by biting illegally imposed economic sanctions by the West and the US following the implementation of the land reform programme. The sanctions were also meant to effect regime change through the opposition MDC-T.

The government has since engaged Bureau Veritas to carry out conformity assessments on selected imported products for the benefit of local industry and in order to protect consumers and help them get value for money.

Bureau Veritas is a company based in France that operates in more than 140 countries around the world.

Mabuwa’s topic of discussion was “Addressing Zimbabwe’s productivity and competitiveness for trade and stimulation”.

The deputy minister said the non-competitiveness of local companies was a result of high costs of production emanating from high mark-ups that are meant to sustain overheads.

She said the overheads were epitomised by high utility tariffs, finance charges as well as wages and salaries which were higher than those obtaining in neighbouring countries and beyond.

“In addition to this, the continued appreciation of the US dollar against the country’s major trading partners’ currencies has rendered imports cheaper making local goods uncompetitive. The problem of low productivity is also attributable to a combination of poor work ethics and the use of antiquated plant and machinery within the domestic economy. This is caused by a lack of capital or financial resources to replace the old equipment.

“The combination of uncompetitive factors has continued to put pressure on the country’s balance of payments position as imports of finished goods have become the order of the day leading to company closures and job losses,” said Mabuwa.

She, however, said the situation was not all gloomy as there were some industries that were doing well and continue to expand and create employment.

“On Monday I toured a number of companies in Bulawayo and discovered that companies likes Ceratrex (meat processing), Ref-Air (refrigeration), Viva Marketing (clothing) and National Blankets, are performing well. The dairy sector has seen the expansion of Dendairy in Kwekwe in the last 12 months. Companies such as National Blankets, Blue Ribbon Foods, Star Africa and Lobels Biscuits that are under judicial management, are making a steady recovery. This is mainly attributed to careful nurturing and indeed the availed funding through DiMAF (Distressed Industries and Marginalised Areas Fund),” said Mabuwa.

The business conference was held under the theme: “Stimulating Exports, Seizing Opportunities to Accelerate Growth Under ZimAsset.”