CZI pushes for internal devaluation

Source: CZI pushes for internal devaluation | The Herald August 2, 2016

Conrad Mwanawashe : Business Reporter

Industrialists will, within the week approach Government with proposals on internal devaluation mechanisms, push for active participation in the SADC Industrialisation Agenda, and lobby for the urgent adoption of the South African rand as the transacting currency. This came out as part of resolutions after industrialists under the Confederation of Zimbabwe Industries gathered in Bulawayo for the annual three-day congress which ended Friday.The resolutions include following up on value chains, implementing the United Nations Industrial Development Organisation value chains model as a tool for achieving competitiveness, and calling on Government to resuscitate lead companies such as the National Railways of Zimbabwe, the Grain Marketing Board which are critical to the value chains, among others.

“We have identified specific areas that we need to work on. We realise that the economy is facing challenges and we believe as CZI we need to make certain tough decisions and the resultant pain must be shared among all stakeholders,” said CZI vice president Ms Tracy Mutaviri while presenting draft resolutions at the close of the congress.

“The first area is value chains and industrialisation; we are saying that as CZI we will follow up with the Ministry of Industry and Commerce on the need for our involvement and participation on the SADC Industrialisation agenda. I am glad that the Minister in his address said he’s expecting private sector to take an active participative role. So we are saying we want to be part of that,” said Mrs Mutaviri.

Also on that, the industrialists decided to cause a meeting of minds on the work at SADC level as well as local industrialisation.

“The basis for that comment is that we do not want to be innocent by-standers as SADC implements a regional industrialisation and we note there seems to be a gap between SADC private sector initiative and country industrialisation. So there has to be some kind of link between Zimbabwe private sector and SADC private sector desk so that we work together,” she said.

On value chains, the industrialists agreed to implement the UNIDO value chain model as a tool for achieving competitiveness.

Value chains were the major point of discussion at the congress forming the theme “Strengthening Value Chains for Sustainable  Industrialisation and Economic Development”.

The CZI has already identified 18 value chains which include cotton-to-clothing value chain, beef-to-leather value chain, juice-to-can, horticultural farm-to-juice value chain, fish-to-fork value chain, asbestos-roofing-construction, gold and diamond-jewellery-ornaments, chrome ore-chromium-chrome plated goods, tobacco-cigarette manufacture, among others.

Ms Mutaviri said the business representative body will identify about four from the 18 to focus on in line with the UNIDO model.

“We need to prioritise value chains following a framework with certain preconditions which include but not limited to, competitiveness, job creation and exports among others. We need to prioritise and also for the UNIDO programme where UNIDO is clearly a potential existing funding partner they indicated that they are only going to focus on four, so we need to have our act together in terms of the prioritisation which four we are going to put forward,” said Ms Mutaviri.

Addressing the same indaba, World Bank country representative Ms Camille Nuamah said it would be best to focus on value chains that shift down to jobs, consumers and small suppliers.

As part of stabilising and transforming the economy, the industrialists were resolute in their push for the adoption of the SA rand as the transacting currency while the US$ is retained as the reserve currency.

They said the use of the US$ has left them uncompetitive against regional competitors who are using the weaker SA rand.

Other industrialists as far as recommending to lobby the SA to formally invite Zimbabwe to join the rand union.

However, Reserve Bank of Zimbabwe governor Dr John Mangudya said on Thursday Government will not be hurried into adopting the SA rand as the transacting currency.

CZI said it would work recommend to Government rebasing mechanisms for internal devaluation.

“On stabilising and transforming the economy, to work with Government on rebasing the economy through a blanket wide internal devaluation. In other words we are saying as a nation we need to come to a decision which affects everyone. Its no point saying the private sector will devalue when other sectors are not internally devaluing. It has to be everyone in all sectors of the economy. And basically internal devaluation is about cost reduction; what approach are we going to be using. CZI to recommend internal devaluation mechanisms within a week. We had already started working on this,” said Ms Mutaviri.

Other resolutions include being visible on calling for the buy local campaign.

“This has been a response to the clarion call that we are not visible especially following SI 64 which we lobbied for and which is in the interest of recapacitating industry and reindustrialisation. We seem to be back-benchers as far as that campaign is concerned. You have people saying there is no industry to protect anywhere so we want to say as industry lets come out and demonstrate the capacity that is out there that needs to be preserved,” said Ms Mutaviri.