via ‘70% of export firms closed’ April 14, 2014 NewsDay
OVER 70% of exporting companies in the country shut down in the past decade, a ZimTrade’s Export Manufacturing Capacity Survey for 2013 released recently has revealed.
Addressing stakeholders at the official launch of the survey results in Bulawayo, key researcher and Africa Corporate Advisors managing director, Mike Nyamazana bemoaned the fact that local companies were failing to venture into the export market.
“About 71,4% of companies that used to export five to 10 years ago have stopped exporting,” said Nyamazana. “The major reasons for not exporting are hassles of the exporting process and producing for export, the quality of product has fallen, lack of skilled manpower and dollarisation eroded the price.”
He said most of the firms that are still exporting constituted a small percentage of the company’s total production.
“Of the companies surveyed, 40% are currently exporting whilst 60% of the firms surveyed are not exporting,” said Nyamazana. “During the same period, the country experienced a surge in imports owing to falling capacity utilisation in industry which fell to 10% in 2008, leading to a widening trade imbalance.”
He, however, said firms indicated that once the government comes up with export supporting or enhancing policies, most of them would be able to increase their levels of exports as they have the capacity and potential to do so.
Nyamazana said South Africa was the single leading export destination for Zimbabwean manufactured products.
Other export destinations in Sadc include Zambia, Mozambique and Botswana as well as Comesa countries such as Kenya and Malawi.
He said there was a need continue the on-going fight to eradicate corruption at border posts and consistent implementation of policies. He added that the indigenisation policy should be flexible enough to facilitate industrialisation and also ensure the availability of lower cost utilities.
COMMENTS
And what have Zimtrade done to assist companies who are not exporting due to “hassles of the exporting process and producing for export”? We are tired of talkers & desperately need some doers! Probably just another of those overpaid hanger-ons.
Labour laws and indigenization killed most of these businesses as was predicted in advance. There is no surprise we are where we are now. We live with the predictable outcome of ZANU policies. The gnu was a brief reprieve. The truly sad bit is that a lot of Zimbabweans still think in terms of the ZANU paradigm and cannot see the errors that have been made.
When you steal other people’s property thing do not always go well for you and this is as it should be
Any fool with half a brain could told these zanupf idiots that would happen you win the election but are going to lose the country not that anyone cares all they are doing is lining their pockets as fast as they can
The solution is to lure foreign investment that would in turn bring in new technology, which would in turn make production cheaper and internationally competitive.
A lot of companies could still operate if they had Electricity, water and roads to transport their goods.
We still have the labour all be it unused and a lot untrained, Investment would also be nice, but with out the where with all to make machines turn there is no point in even trying to open a business. Local or International companies.
Currently in Zimbabwe iIt is expensive to produce products at competitive cost so as to export. Reasons:
a. corruption and red tape
b. obsolete manufacturing equipment and techniques
c. expensive labour
d. dishonest business practices
e. lack of incentives from central government and financial institutions (financiers think that aiding Zim businesses is very risky)
To run a business in Zim it is stiflingly difficult. We have to pay a Factory Licence, Shop Licence, Rates, EMA fees, Standards development levy,NSSA, Trade Union, NEC, Manpower Development, Indiigenisation licence. This all before we have earned a cent or paid a single salary.
Labour Laws are punitive and self defeating. It is alsmost impossible to lay off permanent workers when times get tough. Ths results in us ONLY hiring temporary staff. The laws relating to employing women mean that it is to a disadvantage to employ a young girl as when she has kids it means she can earn full salary for mionths on end.
If we as businesses were simply taxed once and also given incentives to export manufactured goods and import raw materials duty free we would be able to increase employment.
Well said johnny k.Maybe the informal sector can export tomatoes and firewood!!!!!
companies closing and 70% fo export firms closing down WELL DONE KEEP IT UP!! WELCOME TO THE BREADBASKET OF AFRICA!!!
What do you expect from a country that has a dictatorship.And it’s best friends are the Russians ,Chinese and Iranians!