Industry rallies behind local content policy

CAPTAINS of industry have thrown their full weight behind Government plans to aggressively implement the local content policy as a strategy to cut on imports and grow capacity utilisation within local firms.

This comes after Industry and Commerce Minister Sekai Nzenza, had earlier said the Government was working on a number of interventions to develop and grow the economy through its new blueprint, National Development Strategy (NDS1) 2021-25.

The minister said main focus will thus be on value chain development and structural transformation to strengthen the domestic value chains with the major strategy being promoting local content and thrust on import substitution.

Confederation of Zimbabwe Industries (CZI) past presidents Sifelani Jabangwe and Busisa Moyo, said the local content policy would drive demand for local products and reduce pressure on forex for imports.

Minister Nzenza, Mr Jabangwe and Mr Moyo were speaking during CZI’s 2020 manufacturing survey launch and virtual economic symposium.

Industrial capacity utilisation has remained largely subdued since the collapse of many firms’ production systems during the tumult of the decade to 2008.

CZI immediate past president Mr Jabangwe, said Covid-19 disruptions to global trade resulted in increased procurement and consumption of local products. This, coupled with a stable operating environment following the adoption of the auction market forex trading system, saw industrial capacity rising to 47 percent in 2090 from 36,4 percent in 2019.

Industry said if a number of key policy measures are put in place average industrial capacity utilisation would rise to a post dollarisation high of 61 percent by end of this year from the 57 achieved in 2011.

“As highlighted by the honourable minister, the Government is ready to support the private sector in developing the local content policy, and we must embrace this.

Mr Jabangwe said for things to move forward and desired policy thrust to happen private sector must participate in its development.

Mr Jabangwe

“What is required is members to put in recommendations and actually participate in the development of the policy and model that will ensure local enterprises benefit from business that is within,” he said.

Mr Jabangwe said the interventions must begin with support to farmers who produce inputs t range of manufactured goods, which would improve the local economy and save the country’s elusive hard currency.

Mr Moyo, a former CZI president, also threw his weight behind the drive towards the local content policy but stressed the need for the Government to lead the way.

“Government is the single biggest consumer in terms of products and if the Government is looking towards local, I think we will see a big change in capacity utilisation,” he said.

Mr Moyo, responding to Minister Nzenza’s remarks on value chain development, said there was need for structured approach in the form of a properly spelt out roadmap to develop value chains.

“Protectionism without structured development will always lead to challenges,” he said.

He also noted that there was need to take decisive measures to maintain prevailing stability through enhancing confidence in the foreign currency market so that more players participate. For instance, he said banks used to extend forex loans in between Reserve Bank of Zimbabwe weekly auctions, but had since stopped presumably on account of disparities between official and open markets rates.

Mr Moyo said something must be done to close the widening gap between the parallel market exchange rate and the official exchange rate from the auction market.

The United Refineries chief executive praised the Government for reining in excessive expenditure by cutting borrowing on the central bank overdraft, sticking to the budget and cutting on Treasury bill issuance, which increased money supply and upset economic stability.

Mr Moyo also called on the Government to assist with structured funding facilities tailor-made for industry long term capital and working capital requirements. -herald.cl.zw