The downside, yet to be restored, of the economic reforms of the 1990s and the hyperinflation era in the 2000s was the near destruction of Zimbabwe’s primary industry, the production of raw materials and inputs for the rest of the industrial sector.
Secondary industry and the service sector has not only recovered, but has expanded and diversified, as can be seen by any visitor to the industrial sites where factory space is at a premium, despite a fair amount of new building and conversions by property owners and by developers as well as by the actual production companies.
Primary industry has not been totally neglected.
Two new cement factories and the upgrade and modernisation of the previous three shine out, along with some serious reinvestment into the chrome and nickel refineries.
There is finally investment, by two Chinese companies, back into the steel industry and the fertiliser industry has plans.
But to a very large extent Zimbabwe is still an exporter of basic raw materials, minerals and tobacco, and a major importer of the raw materials needed for secondary and service industries. The bit in between tends to be not quite a missing link but certainly less important than it should be and is an identifiable weakness in our economy.
Some of the weakness and the need for imported raw materials came from weaknesses in the agricultural sector. Land reform was seen as a political and social process, rather than an economic necessity that could lead to higher output as more arable land came into production, and the fruits of the harvest being better spread so that a large rural middle class came into existence as a serious market for all that secondary industry we were building.
While the tobacco industry took an early lead in rebuilding the sector better through a complete revamp of production and marketing chains through the contract farming system, a revamp that has seen record harvests in recent years, it was not until the Second Republic that there were serious efforts to apply the systems that small-scale growers need to produce required harvests.
Even so there are now attempts to keep what might not be needed any more. For example tobacco auction floors have launched a major public relations campaign to partly reverse the switch from their old monopoly of tobacco marketing to their present six percent. They have a bit of a case but we need to avoid the temptation to keep something old because it is there.
There must have been some problems in the second decade of last century when Harare’s major industrial sector, the manufacture, repair and maintenance of ox waggons and mule carts, totally collapsed as businesses run by people like Mr Duly, Mr Puzzey and Mr Payne systematically destroyed it with the introduction of imported motor vehicles.
On the other hand the openings that this switch provided took time to be exploited with local assembly and some local manufacture, which we really only saw in the 1960s. And even a lot of that was wiped out by the economic reforms of the late 1990s onwards coupled with some very unimaginative management and a determination by so many to drive the top-end imported vehicles, many made in South Africa as the result of a far more adventurous industrialisation policy.
But the major effort to fix agricultural production, and take advantage of land reform, bedevilled in part near the start by a degree of cheating and the need for a learning curve, is now on course with grain production now at the minimum levels for local requirements or very close to this. Oil seed production is rising fast, but imports are still required, and half our milk and dairy products come from foreign cows, yet we have some of the finest cattle ranges around.
So we need to continue that process at high levels of acceleration. But there is still the problem of lack of primary inputs. Almost all the fertiliser used is either imported or has a lot of imported components in the mix. So we are back to primary industry, in particular the chemical industry, which is not large enough to feed the next stage, making the fertiliser, which is needed for the next stage, growing the raw materials for agro-industry. When we talk about primary industry we are talking about the serious basic level.
The need for far more investment in these primary sectors has been highlighted by the recent troubles in South Africa, which provides 73 percent of the imported raw materials used across our industrial base.
That has led to debate on continuing to diversify out sources of imported materials, but also on looking at how we can revamp our own production at this level. Even the move from importing maize to importing fertiliser raw materials is a major advance, and creates the market where investment in the next stage down in the production chains suddenly becomes viable.
Even at the upper levels of primary industry there are gaps. To take one major example, textiles. We used to process a large chunk of our cotton lint into good fabrics, and there was a growing export businesses. That died. Some of the decline was due to the need in modern markets to have fibre mixes, some was just plain rotten management with old machines and equipment run into the ground with little or no attempt to replace them.
There is a still a fairly decent next level, the manufacture of clothing, that is now back in business but too much of the fabric is imported in large rolls, rather than coming from local mills. The raw materials gap needs to be filled less by trying to resurrect what might well be not just dead but the wrong technology, and start figuring out how to the build a new and better industry, using local raw materials that come from farmers and seeing how local chemical companies can start supplying the artificial fibres needed to add to the mixes.
This harping on reopening industries that use antiquated technologies bedevilled the resurgence of the steel industry before the Second Republic. Everyone kept thinking Zisco, yet the batch-making of steel was an obsolete technology and while Zisco was closed the world switched to continuous processes.
Our two Chinese investors now starting the resurrection of the industry are starting from greenfield sites and while using Zimbabwean raw materials, since just about everything they need can be dug out of the ground near these new sites, they were not interested in the “ox-wagon” remnants of Zisco.
Zisco still has some assets, like infrastructure, mining rights and skilled workers, but anyone taking it over will not be reopening or repairing what was there but rather starting from scratch and building a modern steel plant next door.
The motor assembly industry is another example. When we had a controlled economy it had a monopoly but never really grasped the nettle of upgrading production technology and figuring out how to fill major market niches with the right products. With the growth of freer trade in Africa it might well need to start looking at filling a regional niche for a couple of first-class products, rather than being all things to all people, and use economies of scale.
With skilled workers, even those skilled in older technologies, you can move forward fast so long as those workers are smart and have a good basic and industrial education. The printing industry is an example. It was built on letterpress, a 500-year-old technology. It switched to offset litho, computer-to-plate and computer guided presses. When Zimpapers made the switch the staff in place grasped the technologies, and while the bulk of printing staff now only know of the old technologies through books, they were taught by the workers who made the jump.
Our education systems and our technical education are continuously been upgraded and expanded, with an emphasis these days on producing people who can think creatively and can cope with major changes in the technologies they use over their working lives, learning all the time. So we have the crucial base in manpower to couple with our crucial base in stuff we mine and grow. We now need to put the two together better.