HomeBusiness DigestIndustry Must Innovate to Survive –– CZI

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ZIMBABWE’S industries should be innovative in the production of goods, so that they are able to compete with not only neighbouring countries, but also globally as the era of trade liberalisation and global competitiveness has arrived, business leaders have warned.

The business leaders were speaking at an export management training workshop in Bulawayo on Wednesday.

Confederation of Zimbabwe Industries (CZI), vice president of the Joseph Kanyekanye told business leaders that the local industry should embrace good practices that would enhance their businesses.

“Global competitiveness is important and local industry should make sure that their businesses are attractive globally. There are no more borders in the world that we live in and as business we should be looking for partnerships that will enhance our businesses competitiveness in the global world,” Kanyekanye said.

Over the past five years, the country’s industries have been operating at less than 50% capacity, making it difficult for the production of competitive goods. This situation has seen the country importing basically everything from neighbouring countries.

Kanyekanye said various measures were to be put in place to assist the local industry in producing competitive products.

“Government should put up deliberate assistance for industry, such as supporting low interest rate loans which businesses can borrow and be able to be competitive. Industry should also be assisted on how they can export their goods as most of them are not aware of the procedure,” he said.

He added that there was a need for attitude change on the part of both industry and government to ensure that the local industry thrives in the global economy.

Zimbabwe is a signatory to the Economic Partnership Agreement (EPA) with the Eastern and Southern Africa (ESA) regional groupings, together with Mauritius, Seychelles and Madagascar.

Imports from the countries that signed the interim EPA have received duty and quota free access to the European Union (EU) since January 2008.

As a result of the new agreement, these countries must now liberalise their markets to EU imports over the next 15 years, gradually removing tariffs on between 80 and 98% of imports from the EU depending on the country.

CZI chief economist, Lorraine Chikanya said the country stands to benefit a lot from the EPA, hence a need to improve the quality of our products.

“In the EPA, Zimbabwe will have cumulative and progressive market liberalisation, where it is looking at a situation that by 2013, 45% of EU imports will be coming into the country for free and will increase to 80% by 2022. This means that our products will now be competitive in the EU markets as there will be no duty charged,” she said.

Chikanya however indicated that this trade liberalisation would mean that local industries will need to pull up their socks so that their goods are attractive to other countries.

“Opening up of the market for EU products would provide for stiff competition for the local industry, as Zimbabwe is already importing most products from South Africa and Botswana.

These neighbouring countries are already competing for space with our local products, what more EU products? It is therefore important for the local industry to be extremely innovative in their production.”

Chikanya also said in preparation for 2013, business needs to think about strategies to increase competitiveness, at national, regional and international levels.

“We need enterprises that allow other players to come in and be partners. We need to change our mentality of exporting raw materials into exporting value-added products, recognising of course the challenges facing the companies,”

“The industry needs to know that there is no going back on liberalisation. It needs to be inventive and come up with ways on how to utilise the policy environment they are subjected to.

“In a nutshell, the private sector needs to rethink their strategies and revise their business models,” she said.

 

Fortune Dlamini-Moyo

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