US$22,5m revolving fund for industry 

Ivan Zhakata–Herald Correspondent 

Industrialisation in Zimbabwe, to be viable and sustainable, has to largely be converting Zimbabwean raw materials to manufactured goods, with the additions of those imported raw materials, along with the associated industries that make parts and packaging the new industries need.

This needs new equipment and modernisation of existing equipment, and that means industrialists need access to affordable loans. 

So, now Government has availed US$22,5 million under the retooling for new equipment and replacement for the value chains revolving fund to support the development of value chains across the country.

This comes as Government has also put in place innovation hubs to nurture and develop local ideas and solutions to industrial challenges and to generate and create new industries using local materials.

Speaking during the validation of the report on the development of local content thresholds for the three selected sub sectors of fertiliser, pharmaceuticals and packaging, Minister of Industry and Commerce Dr Sekai Nzenza said they exhorted the private sector to partner institutes of higher learning, detail the challenges industries face, and then work to develop local solutions to the challenges.

“This exercise is one important aspect in the implementation of our local content strategy and comes at an opportune time as we accelerate our industrialisation agenda in line with Vision 2030’s aspirations of becoming an upper-middle-income society,” she said. 

“As you are aware, the National Development Strategy 1, through the moving the economy up the value chains and structural transformation national priority, calls for the development and strengthening of value chains as well as structurally transforming the country from being exporters of raw products to that of finished products. 

“This structural transformation can only be effectively achieved if we are to exploit more of our locally-generated resources.

“The process we are undertaking today also resonates well with our objectives under the national industrial development policy. The policy aims at developing import substitution strategies and one such strategy was the development of a local content strategy in 2019.”

Minister Nzenza said that strategy promoted the use of domestic resources as inputs along value chains, thereby achieving the objectives of increasing average local content levels, capacity utilisation, and manufactured exports in prioritised sectors.

The development of local content thresholds for the three sectors would go a long way in complementing other efforts that the Government has put in place to promote the use of local resources. 

“One such intervention has been the import management programme where products have been removed from open general import licence, placing them under import licences,” Minister Nzenza said. 

“This has had positive results where capacity utilisation increased from 36,4 percent in 2019 to 66 percent in 2022. Furthermore, shelf occupancy of locally manufactured products has been sustainably increasing from 70 percent in 2021 to 80 percent in 2022.”

“Other efforts being taken by Government to support this local content drive include concerted efforts being made to increase agricultural products to support agro-processing industries. Through the Agriculture Recovery Plan (2020-2023), the Government is ramping up the production of agricultural commodities to support agro-processing industries.”

Minister Nzenza said to date, the country had witnessed becoming self-sufficient in wheat supplies, while raw milk production had been increasing over the years to reach about 91 million litres in 2022.

In the mining sectors, Minister Nzenza said the country had been witnessing an increase in gold production and flagship investments in iron and steel through Dinson Iron and Steel Company in Manhize, near Mvuma.

“As Government, we are very much alive to the fact that technology is ever-evolving and this also applies to skill sets demanded by industries,” she said. 

“The Government will be strengthening its labour market information and skills needs anticipation system to ensure the right skills are produced to support local industries. This way, we will be able to minimise the need for expatriates.

“The small and medium enterprises sector is one of the critical sectors when we talk of local content. The sector is currently driving about 60 percent of economic activities in the country and in this regard, Government continues to call for close collaboration between large entities and SMEs.” 

Minister Nzenza urged industries to work together and nurture each other for increased local production.

The Covid-19 pandemic and tension in eastern Europe came as a wake-up call for Zimbabwe and other developing countries.

“During the pandemic, most developing countries were left begging for drugs as most developed countries prioritised their populations,” Minister Nzenza said. 

“Supply chains for critical raw materials and spare parts were also disrupted due to travel restrictions and lockdowns. In the same vein, tensions in eastern Europe affected supply chains for critical raw materials in fertiliser production. 

“This resulted in fertiliser shortages and astronomical price increases which undermined our food security efforts. These two events and many in the foreseeable future, call for increased local content efforts.” 

Minister Nzenza said with the coming of the African Continental Free Trade Area (AfCFTA), there will be increased access to markets for Zimbabwean products.

“This calls for increased use of locally generated inputs within our manufacturing processes so as to meet the agreed rule of origin thresholds and be able to trade at preferential duty rates,” she said.