Manufacturing capacity utilisation seen falling to 30pct by year end, Dimaf 2 on the cards

Manufacturing capacity utilisation seen falling to 30pct by year end, Dimaf 2 on the cards

BULAWAYO, April 30 (The Source) – Zimbabwe’s manufacturing sector is seen falling to 30 percent of capacity by the end of the year on the back of continued challenges that have forced most companies to either downsize operations or completely closing shop, an official has said.

Deputy Minister of Industry and Commerce Chiratidzo Mabuwa told participants at International Business Conference at the Zimbabwe International Trade in Bulawayo on Wednesday that the sector was operating at 36 percent but continued to face a number of challenges that would see productivity decreasing.

She said due to the proliferation of imported goods since the country started using foreign currency, most local companies have failed to compete resulting in reduced capacity.

“The capacity utilisation is projected to drop by a further six percent to an overall industry average low of 30 percent by end of 2015,” she said.

Mabuwa added non competitiveness among local companies was due to high cost of production, high utility tariffs, and high finance charges.

‘In addition the continued appreciation of the US dollar against the country’s major trading partners’ currencies has rendered imports to be cheaper making local goods uncompetitive.”

She said attracting foreign direct investment was also curtailed by lack of improvement in the easy of doing business.

“Zimbabwe has not yet improved its ranking on the World Bank Easy of Doing Business Index from 2013 to 2014.”

She said Government as a way of improving the easy of doing business was rebranding the National Incomes and Prices Commission into the National Competitiveness Commission which will specifically target at improving competitiveness of the local products.

To mitigate problems faced by local companies, she said government was working to mobilize financial resources to support industry.

The Ministry, she added, was also on finalizing a framework for the re launch of the second phase of the Distressed and Marginalized Fund (Dimaf 2).

“This facility is expected to unlock strategic value chains in the economy and improve business linkages among the various clusters.”

She said Dimaf 2 will also address corporate governance challenges that were observed to have contributed to the non-performing of industries or loans extended to companies in the past.

  • Mauya

    The sad part is that the deputy minister seems to be either pretending or is embarassingly ignorant of the happenings in her ministry’s purview. ” She said Government as a way of improving the easy(e) of doing business was rebranding the National Incomes
    and Prices Commission into the National Competitiveness Commission
    which will specifically target at improving competitiveness of the local
    products.To mitigate problems faced by local companies, she said government
    was working to mobilize financial resources to support industry.”

    I do not know what effect renaming one USELESS commission into another USELESS one has on improving manufacturing capacity. Why is it that imports are landing cheaper in Zimbabwe than the cost of manufacturing the equivalent product in Zim.
    And which institution are you going to raid now for Dimaf money?

    As long as we do not solve the underlying problem we will continue to massage the real issues and solve the useless short term, probably, political problems.