The Confederation of Zimbabwe Industries (CZI) says capacity utilisation will nearly double to 65% by 2017 on the back of stakeholder partnerships.
BY TATIRA ZWINOIRA
Capacity utilisation has been on the decline, reaching 34,3% this year from a peak of 57,2% in 2011 and this has been attributed to the declining economy.
CZI believes that to reverse the trend, partnerships with its members, value chain stakeholders, development partners, experts, government and policy makers are key to improving capacity utilisation. According to the industry’s State of the Manufacturing Sector magazine released last week, CZI will employ several strategies to achieve this.
“CZI intends to work with its members, value chain stakeholders, development partners, experts, government and policy makers to raise industrial capacity utilisation to 65% capacity in 24 months and this would be on three critical things,” CZI president Busisa Moyo said.
“[There would be] entrepreneurial leadership, rapid confrontation on issues around the cost and ease of doing business and the re-engagement of trade and investment partners outside our borders where our exports end up and where foreign direct investment comes from.”
The three issues are enablers towards increasing capacity utilisation.
Entrepreneurial leadership is constrained by the high cost of doing business and coupled with the recent weakening of regional currencies, companies have suffered losses as trading and importing is a large part of doing business, CZI said.
Analysts say the slow implementation of reforms to improve the ease of doing business and an unfavourable indigenisation policy had created an inability to attract investment.
Estimates show that about 20 to 25% of companies that were operational in 1995 are still operational today and that over 4 000 had closed in that 20-year period.
Companies that have reopened after closing include Archer Clothing, Cairns Foods and Blue Ribbon Foods.
Moyo said raising capacity utilisation above 65% would have to be achieved by October 2017 to help facilitate growth.
“In raising capacity utilisation by October 2017, firstly, we intend to intensify our rapport with policy makers, working closely with our line ministry and other economically essential ministries like the ministries of Finance, Agriculture and Labour to address constraints that are inhibiting growth of the industrial sector,” Moyo said.
“Secondly, we need to be a catalyst for entrepreneurial activity along value chains so that new businesses can be created and thirdly to partner with companies in upgrading our industrial practices and products to catch up with the rest of the world.”
He said CZI was also seeking to collaborate with the local consumers who spent an average of $7 billion annually importing products.