CZI forecasts manufacturing slump
Harare,(New Ziana) – The country’s big business representative body, the Confederation of Zimbabwe Industries (CZI), said on Friday capacity utilisation in the manufacturing sector this year was forecast to drop to 27 percent, down from 36 percent last year if a myriad of bottlenecks facing the economy are not addressed.
Chief among the bottlenecks, it said in a review of the industry, was the prevailing acute shortage of foreign currency.
The forecast drop in capacity utilisation would be the second in a roll,
having also declined by 12 percentage points last year.
Presenting results of the manufacturing sector survey, CZI chief economist Tafadzwa Bandama said the industry has forecast production to further slump to 27 percent this year if all factors that hit on its performance last year were not addressed.
“The manufacturing sector has been consistently operating below 50 percent (in the past decade) save for the year 2011 when it was 57.2 percent,” she said.
The survey covered the period from last year when government re-introduced the Zimbabwe dollar as a mono currency, outlawing multi-currencies that had been in use for the past decade.
The major constraints faced by the industry ranged from power shortages to
failure to import raw materials due to foreign currency shortages in the
The survey revealed that about 88 percent of companies were struggling to access foreign currency on the official market, with 53 percent of them saying they only got less than 10 percent of their requirements, often three months after applying.
Low demand for goods also complicated matters for local manufacturers as consumers struggled to make ends meet.
Industry players said policy consistency, which they said was lacking,
could be one of the key ways to unlock industry productivity.
Failure by industry to boost production had multi-pronged effects on the economy, including jobs losses as industries scale down operations while government will lose out on tax income.
Industry and Commerce Minister, Dr Sekai Nzenza (pictured) said government had focused its energies on productivity and would do all it can to assist
industry regain its foothold.
“There is absolutely no doubt that we are going through a bumpy period,” she said, expressing optimism that the economy would get over the rough patch.
Dr Nzenza said government would work with industry, academia and consumers to ensure policy consistency and come up with guidelines that will make industry prosper.
“I certainly believe that if we embrace local content, import substitution and working together, we can get out of this trap,” she said.