Local industry could not keep pace with changes in technology at a time when there was an economic decline and it is estimated that it lags behind by close to a decade when compared to regional competitors.
As such, efficiency of the local manufacturers is by far lower than regional averages, making local products less competitive on the international market.
In some instances, the country relies heavily on exporting raw materials.
Finance minister Tendai Biti, when presenting the 2011 budget last week, said the manufacturing industry should avoid the “entrapment of dependency on the production and export of raw materials”.
“Hence, it will be necessary that we propose measures in support of increased value addition of the country’s minerals and agricultural commodities, which is also a central tenet of our re-industrialisation strategy,” said Biti.
Industrialists and businesspeople said in the absence of a clear industrialisation strategy, the local manufacturers would continue to grapple in the dark.
Luxon Zembe, former president of the Zimbabwe National Chamber of Commerce, said the country did not have an economic development framework which would give directions as to where the country was going.
“We do not have an industrialisation strategy which spells out our key areas,” said Zembe. “This strategy would spell out how we can compete with the rest of the world and build our base on. The budget and the
monetary policies would only be used as instruments of achieving this.”
Zembe said since Zimbabwe had an agro-driven economy, the Economic Planning and Development ministry was supposed to develop a strategy on how agriculture, accounting for 60% of the raw materials manufacturing inputs, would boost the economy.
Kumbirai Katsande, the immediate past president of the Confederation of Zimbabwe Industries, said the industrialisation strategy was supposed to bring to the fore linkages in the economy.
“Is it possible to have an industrial policy without an agricultural policy?” asked Katsande who is also the managing director for Nestlé Zimbabwe. “If you take the dairy industry for example, we are utilising 10% of capacity, we have the industry but not the raw materials.”
Katsande said it was important that the successes in the tobacco industry be incorporated into the future strategies.
“There was minimum interference in the tobacco industry and they did not need government intervention,” said Katsande. “With liberalisation, they got out of the woods.”
Katsande said prior to liberalisation, the focus was on what he called “big picture issues” such as the economy, the currency and the politics.
“We were worried about getting things back on the shelves,” he said. “Things were grinding to a halt especially in the productive sector. There were challenges faced by all sectors and it is now important to look at the way each sector has been coming out of the blocks.”
Katsande said there was certain resilience shown by all the sectors, adding it was important to build on the strengths.
It is expected that the manufacturing industry would expand 2,7% this year as it was affected by erratic power supply and absence of medium to long term capital.
Zembe said recapitalisation of industry could only be done effectively when it is underpinned by a clear strategy which quantifies the needs of each of the sectors.