Saturday, April 30, 2016

Call for Collective Efforts to Resuscitate Industry in Zimbabwe
April 29, 2016
Zimbabwe Herald

Local industrialists should “think outside the box” and complement Government efforts to re-tool industries and increase productivity, a senior Government official said yesterday.

Last year, industrial lobby group Confederation of Zimbabwe Industries said local manufacturing companies required at least $8 billion as working capital, of which $5 billion was for replacing obsolete equipment.

Speaking at a mechanisation and industrialisation workshop at the Zimbabwe International Trade Fair, Industry and Commerce Deputy Minister Chiratidzo Mabuwa said collective efforts were needed to resuscitate local industry.

“We need industry to think out of the box, to retool and supply the local and international market,” she said.

“We are also engaging with the Reserve Bank of Zimbabwe, asking the central bank to set aside funding for retooling.”

Industries in Zimbabwe have failed to regain their competitiveness after adoption of multiple foreign currencies due to various challenges chiefly obsolete equipment, high production costs, lack of lending and stiff competition from cheap imports.

On its part, the Government has adopted various measures to support resurrection of the local industry, including setting up the Distressed and Marginalised Areas Fund meant for struggling companies to access bail out financing.

Last year, the Reserve Bank of Zimbabwe (RBZ) announced that it had mobilised $210 million from development banks to support capital projects that boost production in industry.

The RBZ governor Dr John Mangudya said in his 2015 mid-term monetary policy statement that the funds had been mobilised from the African Export-Import Bank (AfreximBank) and the Development Bank of Belarus.

The RBZ also agreed with local banks that effective October 1 last year they would charge interest rates of between 6 and 18 percent per annum depending on the credit worthiness of the borrower.

“The downward review in bank charges and interest rates is envisaged to achieve the key objectives of stimulating aggregate demand, promote the resuscitation of industry, improve the cost of doing business and support sustained economic growth and development and thereby going beyond stabilisation,” said Dr Mangudya.

Industry capacity utilisation is hovering below 40 percent.

— New Ziana.

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