By Melody Chikono
Zimbabwe is losing in excess of US$2 billion annually through the use of antiquated machinery while half-a-billion dollars is required for the industry’s retooling, businessdigest has learnt.
Manufacturing industry capacity utilisation dropped 45,1% in 2017 from 47,4% weighed down by rising costs of production, foreign currency shortages, and expensive debt among other challenges.
A Confederation of Zimbabwe Industries (CZI) manufacturing industry report shows that companies with older machinery and equipment did not record growth last year, indicating the need for new investment in machinery.
Between January and November 2017, Zimbabwe’s imports totalled US$4,9 billion reflecting a trade deficit of US$1,4 billion.
Zimstat trade figures also indicate that during the period under review, goods worth US$2,2 billion were exported to South Africa while imports from the neighbouring country amounted to US$2 billion.
CZI president Sifelani Jabangwe last week told businessdigest that most imports coming into the country are products the country could be producing on its own should there be re-investment.
“It’s difficult to measure the loss through use of antiquated machinery, but we can use the amount of imports into the country and we currently we are averaging US$5 billion,” he said.
“It’s worth noting that most of the imports we could be making them ourselves. We could look and say half of those goods are a measure of how we are losing certainly above US$1 billion to US$2,5 billion because we could not invest in the machinery,” he said.
Jabangwe said the industry would need to invest US$500 million in retooling to make the industry vibrant and competitive as obsolete machinery continue to weigh down performance.
“Anything above half a billion (dollars) will be adequate because most of the equipment will be around US$100 000 unless one is looking at the whole plant. We are not looking at that. A half a billion facility will go a long way,” he said.
This comes as the CZI is making headway in engaging foreign investors in an effort to retool industry.
Today, the CZI will conclude a meeting with an Italian industrialist which will pave way for potential investment in machinery in the country.
Local industrialists have been invited to Italian trade mission which began on Wednesday and ends today in Rome and Milan.
“The purpose of the mission is to direct and discuss potential investment opportunities in the country. The sectors the Italian companies would like to meet are agriculture and mechanisation, infrastructure (which includes energy and both traditional and renewable energy inclusive of machinery and equipment in the mining sector), ” he said.
Jabangwe said the delegation will assess the appetite for investment that the Italians have for investment in the country.
He added that as it stands there is high interest in investing in the country and he was hopeful the meeting would be fruitful.
“Through this engagement we are going to get a feel of what their appetite for investment in Zimbabwe is like but again we believe in the range of US$500 million to US$1 billion thereabout in the scale of investments that they are looking at.
“A lot of their investment in Africa has been in north Africa but as Zimbabwe they will have to measure our capabilities and invest. As you are aware, they are the ones who constructed Tokwe-Mukosi Dam and Kariba Dam,” he said.