THE Confederation of Zimbabwe Industries (CZI) is currently assessing the state of the manufacturing industry amid indications that capacity utilisation will shrink further this year as the sector is in dire straits.
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The manufacturing sector is currently dogged by challenges, chief among them the influx of cheap imported finished goods that have made local products uncompetitive.
CZI president, Charles Msipa told Standardbusiness that while the assessment was currently underway, indications pointed to a decline in capacity utilisation from the 44,2% recorded in 2012.
The harsh business environment facing the manufacturing sector was up for discussion at CZI’s national council meeting on Tuesday.
“It was noted that the manufacturing industry is in a very dire state. Companies continue to close down; and those that are still operating find it difficult to pay creditors,” Msipa said.
As a measure to provide relief to companies, the council called for a moratorium on the increase in both direct and indirect taxes. It also proposed duty on imports and finished goods, and on raw materials.
The growth in Zimbabwe’s manufacturing sector is weighed down by antiquated equipment that has increased the cost of production and ultimately the cost of the products when compared to imports.
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Power outages and the absence of long term financing have delivered blows on the revival of the sector.
Although the capacity utilisation has been improving since the use of multiple currencies until last year, it had failed to reach the 60% mark.
From 32,2% in 2009, capacity utilisation rose to 57,2% in 2011 before slipping down to 44,2% last year.
