FOR many years, many hurdles have buffeted Zimbabwe’s manufacturing industry. The list of their concerns is long. But they include challenges faced by foreign investors to remit dividends through banks, liquidity constraints, exchange control regulations that pose exchange risks, negative destination perception, heavy taxes, a grinding power crisis and, as the Confederation of Zimbabwe Industries (CZI) said last week, a complex business environment.
It is worrying that these concerns have been brought to authorities’ attention but it appears the government and the ruling Zanu PF party are not in any hurry to address these concerns.
Also shocking is the fact that within its ranks, Zanu PF has created an army of oligarchs that today control a huge network of thriving enterprises with interests spanning from oil to farming and mining.
It is a surprise that bigwigs have not scrambled to protect their own interests.
That is unlike Zimbabwe’s ruling elite — they have demonstrated that where their own interests are threatened, they are quick to flex their muscles. The temptation to speculate that there could be a dual policy regime for firms operated by politically-connected oligarchs and for the rest of businesses is high.
In any case, some of today’s fastest growing business empires include those controlled by those who ingratiate themselves with those at the centre of power. However, lack of political will to solve industries’ concerns has come at a heavy cost to Zimbabwe.
Zanu PF itself acknowledged this in its 2013 election manifesto when it said hard hitting sanctions triggered by harsh agrarian policies cost Zimbabwe US$42 billion in potential economic opportunities from 2000.
Crucial foreign investment inflows have been withheld by sceptical investors because they are concerned by the attitude of the regime in Zimbabwe towards business.
The list of Zimbabwean investors opting to invest offshore is testimony to the fact that even home-grown investors have lost faith in their leaders’ willingness to work with investors.
So, they are trooping off in big numbers as defiant authorities maintain their toxic nationalistic stance. This is why, as the CZI said again last week, it has taken about four years for the manufacturing sector to raise US$2 billion in fresh capital to reposition their operations in line with an extremely complex and unpredictable global climate, whose complexity has been compounded by Covid-19.
There is nowhere the long-awaited economic rebound can be achieved under these circumstances and the ambition to transform Zimbabwe into an upper middle income status by 2030 is under threat, if not off track. To their credit, manufacturing firms invested a combined US$25 million during the first quarter of this year to keep their operations afloat. The sad thing is, at this rate, they will be injecting about US$100 million a year and could work for up to 20 years to reach the US$2 billion needed to produce at full capacity.
This is too long a period to redeem a country that has been buffeted by job losses.