Industry invests US$147m in new capacity

12 May, 2022 - 00:05 0 Views
Industry invests US$147m in new capacity Capacity utilisation still highest since 2012. — Graph by CZI

The Chronicle

Harare Bureau
THE country’s manufacturing sector capacity utilisation increased to 56,52 percent in 2021 from 47 percent in 2020 largely driven by increased investments in the sector.

According to the Confederation of Zimbabwe Industries (CZI) 2021 manufacturing sector survey report launched in Harare yesterday, surveyed firms invested US$147 million towards new capacity, with the funds largely coming from the Reserve Bank of Zimbabwe (RBZ)’s foreign currency auction system.

“37,8 percent of the manufacturing sector undertook investments to increase their production capacity in 2021 and this resulted in additional capacity of 25,6 percent,” Dr Cornelius Dube, CZI chief economist, said while presenting the survey report.

Dr Cornelius Dube, CZI chief economist

He said about 57 percent of the manufacturing sector firms registered an increase in sales with the drinks and tobacco subsector recording an 82 percent in output and had the highest percentage of firms registering an increase in sales.

Industry and Commerce Minister, Dr Sekai Nzenza, in her remarks, said growth in capacity was in response to an enabling business environment and the ease of doing business reforms prioritised by the Second Republic.

“Testimonial to this, the manufacturing sector has realised a 5,5 percent increase in exports from US$383 million in 2020 to US$404 million in 2021,” she said.

“In addition, we welcome the Zimbabwe National Statistics Agency (Zimstat) timely figures on provincial GDP with Harare having $294 billion out of $1,157 billion in 2020, thus contributing 24,4 percent to national GDP.”

Minister Nzenza noted that the survey comes soon after the holding of a successful ZITF in Bulawayo last month, which showcased the country’s local products, attesting to the fact that 75 percent of shelf space occupancy in the retail sector is coming from local manufacturers.

She said the 2021 annual manufacturing sector survey report showed positive signs of sustained growth of the manufacturing sector with the average increase in output being 30 percent.

“In addition, in response to the enabling business environment, about 38 percent of companies in the manufacturing sector undertook investments to increase their production capacity in 2021 and these investments created additional capacity of 25,6 percent,” said Dr Nzenza.

Industry and Commerce Minister, Dr Sekai Nzenza

Minister Nzenza said Government was pleased that CZI conducted the survey in collaboration with the University of Zimbabwe, Midlands State University, Solusi University and Africa University for data collection, which involved physical visits to identified manufacturing sector firms.

She said this closely aligns with President Mnangagwa’s approach, which also sees universities and businesses innovating towards the 4th industrial revolution.

With respect to employment creation, the Minister noted that most firms at 53,5 percent created new jobs in 2021, with the new jobs constituting about 19 percent of total employment.

She added that 16 percent were retrenched while the rest maintained their employment levels.

“This strong manufacturing sector performance in 2021 can be attributed to the favourable Government policy of allowing foreign currency access to industry, which had been one of the key constraints in previous years,” she said.

“In addition, the Government recently announced measures to curtail runaway inflation and stabilise the foreign exchange market.

We trust that business will continue to support Government policies as we remain focused on our long-term growth trajectory,” said Minister Nzenza.

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