Renewed political will gives hope for economic revival

Renewed political will gives hope for economic revival
Published: 04 February 2018 (428 Views)
THE new political dispensation has brought with it a renewed sense of hope for a genuine national economic turnaround that is expected to better the lives of the country's citizenry with economic analysts saying sustenance of that hope is hinged on walking the talk where practical solutions to the economic fundamentals are quickly put in place.

The analysts said they were quite positive that the dialogue between Government and industry as well as many other initiatives being put in place were going to yield good economic results.

Responding to questions by the Sunday News, Confederation of Zimbabwe Industry (CZI) Matabeleland Chapter President Mr Joseph Gunda said as part of the economic revival fundamentals, urgent attention should be paid to the availability of forex for industry to import the necessary raw materials.

This, he says, is the major fundamental that the new political dispensation should address as a matter of urgency.

He said the shortage of foreign currency had contributed to the current distortions in pricing of commodities on the market as industry was struggling to supply local products consistently due to raw material shortages as companies were struggling to get forex through the normal means from the Central Bank (RBZ) resulting in some sourcing it from the parallel market, a situation which he said was unsustainable as they were failing to absorb the additional costs and end up passing them to the detriment of the consumer.

He said funding should be made available for re-tooling as most manufacturing firms were using antiquated equipment.

"We need to build competitiveness by introducing modern technologies that help us to manufacture high quality products at low cost and make our products competitive at regional and international level. The country also needs continued and full implementation of Statutory Instruments (SI 138, SI 126, SI 64, SI 122).

Our borders remain porous and the new Government must employ strict monitoring controls on issuance of import licences to eliminate dumping of cheap imports of goods so that we consolidate the gains of protection for complete revival of existing industries and those that are closed but remain low hanging fruits and potential subjects of quick resuscitation," said Mr Gunda.

He added that there is need for the speedy implementation of the Special Economic Zones (SEZs) and to be supported by all stakeholders.

He said industrial hubs such as Bulawayo are pinning its hopes on the implementation of the Bulawayo SEZ as the incentives associated with this initiative would fundamentally assist revival of existing firms, resuscitation of closed firms and attract new investment in Foreign Direct Investment (FDI).

The SEZ Board, Mr Gunda said, should be established fully with functional structures while the Bulawayo SEZ Technical Working Group (TWG) which had hit the ground running using the Rapid Results Initiative (RRI) should be supported financially, socially and morally. He called for a national economic vision where industry countrywide must speak with one voice focussing more on action than words.

The call for the transformation of words into action was echoed by economic analyst Mr Kipson Gundani. Mr Gundani said it was important to look back and find out why there was so much de-industrialisation in the country so that holistic solutions are sought going forward so as to avoid the same pitfalls.

He said the economy could not be discussed in isolation of the political developments that have aroused a lot of hope in the minds of the industrialists who became convinced that there was going to be a change in leadership style, investment and trade policies all of which forms part of the economic story.

"We should in the same vein admit that we have been overtaken by so many advances especially in the area of technology and as we focus on resuscitation we also need to close the gaps in technology, define our niche as well as engage in dialogue for a national shared economic vision.

"I am convinced that this is the opportune time to do that and not let the hope die. We need to fix the anomalies that were stalking our national economy creating opportunists in the economic value chain and causing distorted currency markets.

"There is need to create confidence in our economy not by catastrophic price controls but through dialogue," said Mr Gundani.

He said he was positive that engagement efforts led by President Emmerson Mnangagwa were going to bring results in increased investment and economic growth because there was assurance of political certainty which was crucial for investment.

The need to re-tool industry was also mentioned by Mr Gunda who said there was need for technologically efficient machinery in the country's industries.

"Funding for manufacturers to re-tool should be made available as a matter of urgency at low interest rates. RBZ has mentioned the availability of this funding but we are yet to see its availability and disbursement mechanisms.

The funding should be targeted at genuine manufacturers who demonstrate the need and whose operations have potential to benefit the wider downstream value chain and the disbursement should be transparent. Most of the equipment in industries is more than 20 years old and re-tooling is absolutely essential," said Mr Gunda.

He said the tour held at Dunlop by the Resident Minister of Bulawayo Metropolitan Angeline Masuku together with the Bulawayo Think Tank Group on Thursday buttressed the need for the funding. Like most other big companies which Bulawayo used to boast of such as Gold Star Sugars, United Refineries, David Whitehead Textiles, Archer Clothing, Merlin industries, Ascot Clothing, Datlabs and Kango, Dunlop, a previously known giant employer in Bulawayo is a now a pale shadow of itself after closing its production operations at the end of 2016.

The company requires US$12m to resuscitate while General Beltings opposite Dunlop, requires over US$3m to fully re-tool and exploit its full potential. Both companies that form the country's rubber sector which is key to Zimbabwe's mining and transport system, are low hanging fruits capable of creating employment for over 1 000 employees and contribute significantly to exports and the country's GDP.

These are just two examples among the so many Bulawayo companies that are in dire need of funding to resuscitate and revive and bring back the city's lost glory as one that never went to sleep.

Bulawayo was strategically positioned to supply much of its products to the regional markets through a vibrant rail and road transport, something that explains why NRZ is head-quartered in Bulawayo.

It being in the natural ecological region five where there is little rainfall for intensive crop production, Bulawayo and its surrounding environs are well known for cattle ranching and was a net exporter of the best grade of meat to the EU countries and even America, earning the country the much needed foreign currency and it further explains the state-of-the-art abattoir at the Cold Storage Commission (CSC) whose headquarters are in the city although they now look forgotten.

That, of course, was before the West conspired against Zimbabwe in the sanctions regime that further struck the country's economy into oblivion. But that is not the end of the Bulawayo story as the new political dispensation has already managed to charm some investors and more are even promising to come.

Fort Group Enterprises director Mr Ernest Marima said the political will shown so far was in getting the country's economy on track was encouraging.

He lauded the engagement efforts that were championed by President Mnangagwa saying they go a long way in projecting the country as investor friendly to the outside world. He added that the country could not afford to live in isolation as globalisation required that you co-operate or you remain behind.

"We have remained behind economically and technologically because we looked comfortable in our isolation. We are however, happy that the relaxation of some policies that were not favouring investment is going to attract a pool of investors to the country while the Government has committed itself to resuscitate companies such as NRZ and CSC which used to employ thousands through Public and Private Partnerships (PPPs) and recapitalisation loans," said Mr Marima.

He said although the food and beverage industry was performing better, the same could not be said of the clothing industry where there was a need for a paradigm shift to market needs as some of the clothing items such as napkins that were manufactured by Merlin were no longer marketable as people now depend on diapers.

His point was buttressed by Mr Gunda who said Zimbabwe was lagging behind on the technological front and customer tastes and preferences that have changed over the years resulting in some products becoming irrelevant to the market.

Mr Marima however, said the Government had shown its responsiveness to the concerns adding that it was encouraging to have a political leadership that was not divorced to the needs of the ordinary people.

"From the look of things there is enough political will and zeal to fix the economy. In fact the pressure is with Government to deliver what it promised and there are more than enough pointers to a bright economic future for the country.

The new Government has shown its commitment to provide a platform of engagement with businesses on how we can revive, revamp, renovate and revitalise our efforts and we noticed a serious political will and we applaud the efforts," said Mr Marima.

He said new ideas came up highlighting that it was during the tour where ideas came up about United Refineries not confining itself to cooking oil alone but to start making washing powder, more bar soaps and other products that were in line with its business.

He said if all the business ideas were implemented and supported by flexible funding mechanisms for recapitalisation more jobs were going to be created in the country and ease unemployment while at the same time getting the economy to tick.

- zimpapers

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