Zimbabwe’s leading business executives will next week lay out proposals aimed at reshaping industry to create an economy open to new industries in line with Government’s agenda of transforming the nation into a middle income state.
Currency and fiscal reforms as well as implementation models—all critical ingredients to reboot Zimbabwe’s economy—are among major issues that will come under discussions at the Confederation of Zimbabwe Industries congress in Bulawayo next week, Sifelani Jabangwe, the president of industry lobby group said.
The CZI congress is the first after the victory of President Mnangagwa and his Zanu-PF party in the July presidential and parliamentary elections. The newly elected president has already pledged sweeping reforms to revive the economy following years of stagnation.
The CZI meeting also come at a time the manufacturing industry-one of the sectors expected to drive the economy-has shown solid performance since the beginning of the year.
The growth has been mainly driven by increased consumer demand and import restriction measures put in place by the Government to protect the local companies. However, the greatest setback has remained foreign currency shortages, which have seen many companies struggling to secure raw materials to operate at optimal levels.
Huge impact companies
“We are going to have discussions centred on how Zimbabwe can rapidly industrialise so that we can be a middle income economy by 2030,” Jabangwe told Business Weekly.
“The focus will be on industrialisation agenda that enables creation of new companies with potential of making huge impact; value chains, issues relating to parastatal reforms, currency and fiscal issues and looking at implementation models used by countries that have rapidly industrialised in recent years.”
Jabangwe said the CZI annual meetings would find a formula that would drive the country’s industrialisation agenda to deliver a middle income economy by 2030.
While it was important that struggling companies be revived, focus should now shift towards creation of new industries with huge potential of creating employment.
Former Botswana president Ian Khama, will be among delegates invited for the congress, said Jabangwe, and would share his experience on how Zimbabwe’s western neighbour leveraged its diamonds for the stability and growth of its economy. The cornerstone of Botswana’s success has been one commodity, the diamonds.
The congress will also be attended by representatives from international business organisations from Turkey, Botswana, Japan and India. “These countries have done well in terms of industrialisation and we would like to learn from them,” said Jabangwe.
“And as we focus on industrialisation, we also believe these are good source markets for equipment.”
Last year, the manufacturing sector grew by 1,2 percent and is projected to expand by 2,1 percent this year. Output, a key measure of performance of the industry, grew by 5,5 percent.
The Government had projected the economy would expand 4,5 percent this year, but is optimistic that growth could be as much as 6 percent, underpinned by manufacturing, mining and construction and agriculture. CZI, the country’s largest industry body expects output growth for 2018 to expand beyond last year’s 5,5 percent while capacity would go beyond 50 percent from 45 percent last year.
According to CZI said, local manufacturers have registered solid performance during the first six months of the year, in term of exports, revenues and volumes.
The improved industrial performance is putting more pressure on foreign currency demand for importation of raw materials, electricity and fuel. While the country recorded a 44 percent trade deficit during the first six months of the year, the makeup of the deficit shows a significant shift from consumptive to productive imports, according to the Reserve Bank of Zimbabwe.
Raw materials and machinery imports were up 34 and 14 percent for the period between February and June respectively.
Consumer goods imports declined 34 percent to $401 million between January and July 6, from $610 million as domestic consumption of locally produced goods surged.
“This means production is slowly becoming a central theme,” Busisa Moyo, the past president of CZI and chief executive of United Refineries, a Bulawayo-based fast moving consumer moving goods company tweeted on Tuesday.
“We shouldn’t import for consumption but for production; that what clever countries do,” he added.