Sunday Mail Reporter
Industries in Bulawayo have grown in leaps and bounds over the past two years despite the negative impact of the Covid-19 pandemic, and there are indications the rebound is likely to continue.
Bulawayo used to be the country’s industrial heartland, boasting giant industrial operations such as the Cold Storage Company (CSC), engineering company ZECO Holdings, Treger Group of Companies, Archer Clothing, United Refineries Limited, Sheppco BMA Fasteners, Metal Founders, Datlabs, Kango Products, Zambezi Tanners, General Beltings, Arenel, Dunlop, among others.
Over the years, most of the companies’ operations had been choked by myriad challenges, including capital constraints and the effects of illegal sanctions imposed on Zimbabwe at the turn of the century.
Industry and Commerce Minister Dr Sekai Nzenza told The Sunday Mail that the Government was working to ensure the country’s second-biggest city regains its past status.
The Government’s policy interventions to stimulate industrial development were guided by the National Development Strategy 1 (NDS1), which encapsulates policies such as the Zimbabwe National Industrial Policy (ZNIDP) that target to create a conducive operating environment for the private sector businesses and trigger technologically advanced and diversified industrial operations.
Other policy interventions that have been introduced include the Leather Sector Strategy and the Local Content Strategy.
“One of the targeted areas of our intervention includes ensuring that Bulawayo returns to its former glory as the country’s industrial manufacturing hub, focusing on revitalising the key industries, guided by the value chain model,” said Dr Nzenza.
“It is evident that implementation of the NDS1, aided by fiscal and monetary policy support interventions by the Government, has seen a positive growth trajectory in the manufacturing sector, with Government assistance helping industry in their retooling exercise.”
As a result of the Government’s policy measures, capacity utilisation increased to 61 percent in 2021 from 47 percent recorded in 2020, surpassing the planned target of 50 percent.
Industry, on its part, is also embracing technology and modernisation in line with the Government’s thrust of accelerating the use of ICTs.
Bulawayo is the country’s logistics nerve centre, with railway lines connecting routes around the country and major ports in Mozambique, South Africa and Namibia.
The green shoots of the embryonic resurgence are beginning to show.
Many companies are reopening, while some are diversifying.
Others are already penetrating lucrative export markets.
For instance, Arenel, traditionally known for confectionery production, has diversified and is now producing non-alcoholic beverages.
Treger has ventured into production of solar equipment, including panels and accessories.
Scrap metal processors, textile and leather industries continue to show strong signs of rebound.
Ingwebu Breweries has re-introduced its “Shake It” opaque beer, which was suspended five years ago due to foreign currency shortages to import packaging materials.
The manufacturing industry has been the largest beneficiary of the Reserve Bank of Zimbabwe’s foreign currency auction system.
There is evidence of growth of small to medium enterprises (SMEs) in manufacturing, retail and service industrial sectors inclined towards food processing, leather and clothing value chains, mining supplies and engineering.
The Confederation of Zimbabwe Industries (CZI) said the rebound shows resilience of the economy.
“We are really encouraged . . . the recovery is quite strong and we want to applaud Government for its continued support,” said CZI president Mr Kurai Matsheza.
He said the measures taken by the Government to encourage the wider use of the Zimbabwe dollar would further support growth.
In terms of the new measures, miners are now required to pay 50 percent of royalties in local currency, while exporters will now be taxed 40 percent of export receipts in the domestic currency.
According to the Zimbabwe National Chamber of Commerce (ZNCC) State of Industry and Commerce Survey 2021, the manufacturing sector is among the five projected to lead the economic growth agenda by growing an average of 5 percent and above annually till 2025.
Last year, according to the survey, the manufacturing sector was projected to grow by 7 percent, before easing to 6,5 growth this year.
“A look at new business establishments and closures shows that the number of companies filing with the Registrar of Companies and ZIMRA has been steadily growing since 2018, despite a heavy Covid-19-induced slump in 2020,” reads the report.
“These figures are supported by a positive trend in the number of active members in the National Social Security Authority (NSSA) database.
“However, tax registration seems to consistently trail company registration, indicating that not all new entrants complete the formalisation process by registering for tax.
“This may point to incentive issues, among other challenges.
“Regarding sectoral capacity utilisation, there were wide variations ranging from 10 percent to 80 percent, the average being 47,5 percent.”
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