Zim can increase ICT manufacturing capacity

Zimbabwe has potential to establish and successfully run ICT hardware manufacturing plants to curb tech-related import bill, local telecommunications companies have said.

The country continues to be a net importer of ICT hardware ballooning its import bill, when it has the potential to assemble or manufacture some of these gadgets.

There is a growing need to localise the sector’s value chain for improved economic gains from the ICT sector.

This will come in handy to the Zimbabwean economy, contributing to the import substitution drive which seeks to curb the growing import bill for devices that can be made locally.

Local manufacturing hubs can help reduce the cost of ICT hardware, making technology more accessible to a broader population segment.

However, developing ICT value chains is part of the government’s long-term plans tapping into the increasing transformative impact and influence of ICTs.

According to the World Bank collection of development indicators, the country imported ICT gadgets worth about 2,15 percent of the country’s total import bill.

However, local ICT-related companies see potential in this booming sector, which has become central to the administration of many other sectors of the economy.

They say the sector remains an “undiscovered rare blue diamond” that has an immense return on investment if the right energy is directed towards developing the sector.

Benefits are not limited to fulfilling local demand but exports into regional countries.

State-owned, TelOne has made strides in this regard, having set up the Zimbabwe Information Technology Company (ZITCO) in 2021.

Albeit being at an inconsequential scale, the company has been assembling and supplying laptops and desktops locally, particularly to arms of the government.

However, funding remains the major barrier to the realisation of its full potential.

Adequate investment in the sector may catapult production levels significantly to curb the menacing import bill.

Speaking at the Zim–US business forum held during the week, Dandemutande chief executive Never Ncube, said there remains a gap in the ICT hardware manufacturing in the country.

He said the growing use and demand of information technology services under the Fourth Industrial Revolution (4IR) presented a massive opportunity for the manufacturing of ICT gadgets locally.

“We have technology-related opportunities here in Zimbabwe, the government’s vision 2030, envisions the establishment of ICT zones, where we are expecting to have manufacturing and assembly plants for ICT gadgets.

“From the country’s vision, we have identified ICT infrastructure development as a lucrative area of investment or partnership with foreign investors,” said Ncube.

The government is pursuing the e-government drive, where it is pushing for a digital economy that places emphasis on universal access to the internet, building up last mile infrastructure, systems and platform integration, digital banking, data centres, cloud, and cybersecurity.

However, infrastructure maintenance and expansion have not kept pace with the technological revolution due to various economic reasons that include shortage of foreign currency, hyperinflation, access, and cost of capital.

TelOne chief executive officer, Engineer Lawrence Nkala, in an interview said funding to operate optimally remains the major stumbling block to operate optimally.

He said ZITCO, which is one of the major centres assembling laptops and desktops, requires at least US$5 million to buy completely knocked-down kits for assembling at the Msasa factory plant.

“Inability to raise funding to procure the kits for assembling devices like laptops, desktop computers, and even other gadgets like mobile devices has been our challenge.

“There’s a lot of money required, but we can take any amount that can come in tranches. If we get about US$5 million that would be reasonable, to buy a sizeable quantity of kits so that the production level is optimal and to reduce unit costs,” said Nkala.

Asked if his company would be able to compete with established brands that are currently flourishing on the local market, he said; “Volume is the key issue in the economies of scale in any production situation so if we get a bigger consignment of raw materials, we would be able to reduce our price significantly. It would be comparable. Scale economies lead to a reduction in unit prices.”

Nkala showed his zeal to have fully established manufacturing hubs locally as it creates employment while at the same time building capacity to manufacture own local gadgets.

The establishment of local manufacturing hubs can provide opportunities for small and medium enterprises to participate in the ICT value chain, fostering entrepreneurship and business growth.

By producing ICT hardware locally, countries can reduce their reliance on imported goods, leading to a more self-sufficient and resilient economy.-ebusinessweekly