‘Dearth of economic statistics retarding growth’

THE absence of statistics has resulted in government and companies failing to make long-term plans which could speed economic recovery, says CBZ Bank MD John Mangudya.

Speaking at the 2010 Manufacturing Sector Survey carried out by the Confederation of Zimbabwe Industries (CZI) and launched on Wednesday, Mangudya said statistics provide tools that are needed to react intelligently, read the situation and make informed decisions and policies.
“Statistics in Zimbabwe leave a lot to be desired,” he said. “Without them one cannot make meaningful decisions. You cannot run a country or company without them.”
Mangudya said the country should take a cue from countries such as China that have statistics on all sectors as recent as a week or two ago.
Mangudya said governments and companies use statistics to measure key economic indicators that affect business and industry.
He said keeping track of the Gross Domestic Product (GDP) enables government to determine whether expenditures in business and various industries is increasing or decreasing per given period.
“We just hear that tourism has grown, but by how much no one knows. It is only tobacco where statistics are readily available and we are constantly updated. Statistics help the government determine if there is an impending recession on the horizon; or if economic conditions are improving,” Mangudya said.
“It appears as a country we do not know the importance of making policies based on correct statistics. I for one am a person who does not entertain serious corporate matters with someone who cannot furnish me with figures.”
He said accurate and up-to-date statistics help banks to channel funds to sectors that government priorities.
“Once you have been advanced the loan, please re-pay on the agreed time. Zimbabweans have developed a culture of not paying loans,” he said. “What is worrying is that some people have the ability and resources to pay but just do not want to pay.”
He said the results of the 2010 manufacturing survey were an examination of the industry that should help policy formulation.
Mangudya said confidence building was important in the country to attract lines of credit and long-term investments to increase capacity utilisation in companies.
According to the 2010 manufacturing survey, CZI said capacity utilisation has remained a key challenge within the manufacturing sector.
The survey said although a few firms were producing to their full capacity or close to 100%, the majority claim under utilisation.
“From the survey, average capacity utilisation has continued to improve, albeit, at a much slower rate than expected. Average capacity utilisation as at the end of the first half of 2010, stood at 43,7%, compared to 32,3% at the end of the first half of 2009,” said the CZI.
The CZI said this has been largely due to the stable environment which has allowed companies to plan and budget.
“The manufacturing sector is yet to experience the big leap to high sustainable growth that had been projected by government. On interrogation, it was observed that the major constraints to capacity remain largely unchanged with government having failed to address the fundamentals required to attract the much needed investment,” said CZI.
The three major capacity constraints have been attributed to lack of working capital; antiquated plant machinery, which has resulted in loss of time due to machinery breakdowns or plant and machinery refurbishment; and low demand.
“Levels of exports remain depressed; in terms of export markets Zambia continues to be the leading export destination. Interesting to note is the drop in market share of South Africa, and a considerable increase in market share to Mozambique, from 5% in 2009 to 11% in 2010,” the CZI said.

 

Paul Nyakazeya

Top