Harare (New Ziana) – The local manufacturing sector is expected to grow by 3.7 percent next year on the back of continued government support a as well as increased value addition and beneficiation, a Cabinet Minister said on Wednesday.
Industry and Commerce Minister Sekai Nzenza said this while officially opening the Confederation of Zimbabwe Industry (CZI) annual congress in the capital.
She said the government had put in place various measures to stabilize the economy to create a conducive business environment, which had resulted in improved capacity utilization in the manufacturing sector from 47 percent in 2020 to 56.25 percent last year.
“Cognizance of the prevailing macroeconomic environment, the manufacturing sector is projected to grow at an average of 3.7 percent during 2023, on the back of value addition and beneficiation activities in the mining and agricultural sectors,” she said.
“Zimbabwe’s Vision 2030 of being an Upper Middle-Income Country by 2030 is anchored on industrial transformation, as espoused in the economic structural transformation imperative of the NDS 1. Therefore, the manufacturing sector is key to the industrialization agenda. This is in line with improving our product and economic complexity for a higher value and better jobs.”
Government support measures included the introduction of gold coins to slow down inflation, minimizing the impact of international fuel increases, the foreign currency auction system and duty exemptions on the importation of capital equipment, she said.
“The operationalization of the RBZ Foreign Currency Auction Floor System has continued to support the productive sectors of the economy. As of July 2022, the RBZ allotted a total of US$ 3.5 billion to the auction system. Of this amount, 42 percent of the foreign currency allotment went towards financing raw materials with 22 percent going towards the purchasing of capital equipment,” she said.
Nzenza said the current infrastructure development programme being spearheaded by government would also spur growth in the local manufacturing sector.
She urged the local industry to also tap into the Africa Continental Free Trade Area and other market access opportunities in the SADC and COMESA regions, to increase capacity and enhance competitiveness in export markets.
“There has been significant growth in export proceeds as shown by an increase from US$ 2.3 billion in 2021 to US$ 3.5 billion as of June 2022,” she said.
“His Excellency, the President recently launched the US$300 million Beitbridge Border Post Modernization Project, which will benefit not only CZI members, but also SMEs who will use this port of entry to import and export goods.
“The excellent modernization of Beitbridge Border Post is in line with our commitment to facilitate ease of doing business and the movement of goods and services through the busiest mainland port in the Southern African region.”
She added; “Funding for the industrial sector is critical for the manufacturing sector to move away from primary production to high-income value addition and beneficiation. In this regard, the government has been availing concessionary funding of ZWL 750 million for retooling through the Industrial Development Corporation of Zimbabwe and has also set aside US$30 million from the IMF Special Drawing Rights funds for the retooling of the Leather, Clothing, Pharmaceutical, and Fertiliser Value Chains.”