‘Localise value chains’

THE private sector should play a leading role in localising key industrial value chains to enhance the country’s resilience from external shocks such as the Russia-Ukraine conflict and Covid-19, which have disrupted global value chains.

Industry and Commerce Minister, Dr Sekai Nzenza, said this on Friday as she challenged businesses to take advantage of the positive gains made in the economy and leveraging on the Government support measures.

Speaking during a webinar organised by First Capital Bank, the minister said embracing value addition and beneficiation was strategic for Zimbabwe, and opportunities are immense in processing minerals and agriculture produce into finished goods.

First Capital Bank
Dr Nzenza said the prevailing global supply chain disruption was an opportunity for local industry leaders to scale up their capacity and fill the supply gaps. For instance, she said the country was importing fertiliser from Russia and Ukraine and this was the time to substitute these imports.

“I want to challenge members of the private sector to leverage on the positive gains already made by the Second Republic. Challenges do exist and I’m aware of them, some of them are issues to do with logistics and fuel, which affect the ease of doing business,” said Dr Nzenza.
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“All that affects product prices and affect the consumer, but my ministry is focusing on the Local Content Policy and in order for us to produce locally and reduce the effect of pricing to the consumer, we need to take seriously the private sector-led growth,” she said.

The minister said despite Covid-19, Zimbabwe was on track towards revitalising its industry and that Government was ready to support local producers in different ways.

She expressed excitement over the manufacturing sector performance reports, which, according to the Confederation of Zimbabwe Industries (CZI) 2021 survey, revealed that local capacity utilisation had jumped to 56,52 percent in 2021 from 47 percent in 2020 largely driven by increased investments in the industry.

Dr Nzenza, however, said importation of clothes and shoes remains a concern saying that the country produces cotton and leather but lacks value addition.

“We need to relook and re-examine our cotton to clothing strategy and that requires a whole Government approach where by my ministry and ministry of agriculture come together and see how best can we reverse this trajectory as 95 percent of the cotton we produce is being exported, and what does that mean in terms of value edition?” she said.

“We are also spending close to US$1 billion in importing steel products. I want to admit that we are importing a lot but I am pleased to say we are now at the right time because we have got NDS1 where we are looking at the productive sector in Zimbabwe, which is now undergoing structural transformation.
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“We are increasing investment, retooling and refurbishment, which will ultimately see the regeneration of the Zimbabwean economy and we have experienced an increased investment by multinational companies in Zimbabwe and we are targeting private sector led growth,” said the minister.

United Refineries Limited chief executive officer, Mr Busisa Moyo, who also attended the webinar said there was a need to expand backward value chains like agriculture and enhance technology absorption.
He said capacity utilisation in 2021 was the highest for the past 10 years, which signifies achievement that captains of industries must preserve.

Mr Busisa Moyo
“There is need to advance technology with a view to improve yields and output as some of the equipment we have is more than 60 years old,” he said.

First Capital Bank managing director Ciaran McSherry said their bank was supporting the manufacturing sector and creating partnerships with businesses to find solutions, which will work for both the bank and the business community.

He also urged the Government to have policies that promote growth of the manufacturing sector.

First Capital Bank managing director Ciaran McSherry
“We need to learn and work together with the Government in terms of policies, for example import duty for raw material will increase the cost of doing business,” he said.

“Therefore, making it expensive for the manufacturers and duty-free import of finished goods also cripple the country’s manufacturing sector.” — The Chronicle