Diversify output to build business resilience: Minister

THE Minister of Industry and Commerce, Dr Sekai Nzenza, has called upon the manufacturing sector to invest more towards diversifying their output through embracing value addition and beneficiation so as to enhance business resilience and help the country in substituting imports.

While the country’s industry is on a positive trajectory with capacity utilisation projected at 60 percent by the end of the year from 47 percent last year, according to the Confederation of Zimbabwe Industries (CZI), dependency on raw material imports and exportation of raw commodities continue to weigh down on gains achieved so far.

Guided by the National Development Strategy (NDS1:2021-2025) the Second Republic led by President Mnangagwa has identified industry revival as a top priority, among other steps being implemented towards attainment of Vision 2030.

This has seen the Government working closely with the private sector to fine tune the ease of doing business environment and to incentivise domestic and foreign direct investment into the economy.

Supported by deliberate fiscal incentives and the economic diplomacy focus, measures are being implemented to drive value addition and beneficiation, in particular, as a longterm strategy creating a modern industrialised economy, said the minister.

“The need for diversification to ensure the building of economic resilience against these commodity price shocks, and the need for structural transformation to ensure we escape the commodity dependency entrapment has never been more critical,” she said.

“By implementing these ambitious reforms, and strategies, aimed at boosting inclusive and sustainable industrial development, and rapid economic growth, the country looks towards attaining an upper middle-income status as envisioned in our national Vision 2030.”

Dr Nzenza, who was addressing a recent 19th Session of the United Nations Industrial Development Organisation (UNIDO) General Conference, said Zimbabwe’s industrial sector must reclaim its largest share traditional contribution to the Gross Domestic Product (GDP), formal employment, and foreign exchange earnings through exports.

She noted how in the past two decades, illegal sanctions imposed on the country by a few western countries have led to massive de-industrialisation, which has left the economy heavily dependent on imports.

“The recent fall in global commodity prices couldn’t have come at a worse time given our over-dependency on commodities,” she said.

“The recently launched economic development blueprint, the Zimbabwe National Development Strategy 1 (2021-2025) aims to reverse this trend and to usher the country on a strong growth trajectory through structural transformation.

“Further, the comprehensive reforms that are being championed by the Government of Zimbabwe, that extend to ease of doing business and a massive infrastructure rehabilitation drive, are all but aimed at laying a firm foundation for attracting more FDI and private sector led economic growth.”

Economic experts have, however, noted that implementation of the Zimbabwe National industrial Development Policy, particularly focusing on agro-processing and mineral beneficiation, requires access to affordable financing for retooling.

This has prompted Treasury, in its 2022 Budget outline to propose establishment of a revolving fund to be administered through commercial banks to support retooling and capitalisation of the local industry.

The fund will be established using part of the proceeds awarded to the country from the International Monetary Fund (IMF) US$961 million Special Drawing Rights (SDRs).

“Modalities for accessing the funds are still being worked out in consultation with relevant stakeholders,” said Finance and Economic Development Minister, Professor Mthuli Ncube.

He projected that in 2022, manufacturing growth will remain positive and firm at 5,5 percent, underpinned by continued macro-economic stability and improved access to foreign currency on the formal market.

Citing the disruptive impact of Covid-19 on the global economy, Dr Nzenza urged UNIDO to expand its technical cooperation under the Covid-19 Response Framework to help developing countries, including Zimbabwe, to build capacity in the area of vaccines, essential materials, equipment and drugs, required in the fight against the pandemic.
“This will also assist in fostering resilience against possible future pandemics and other public health emergencies,” she said.

Meanwhile, the minister has paid tribute to UNIDO for its continued partnership with the Government in assisting industry and promoting inclusive and sustainable industrial development despite the most difficult times.-The Chronicle