No revival for dead Byo firms, minister

via No revival for dead Byo firms, minister 01 October 2014

SOME of the companies that closed down in Zimbabwe’s former manufacturing hub of Bulawayo in recent times will not be revived due to capital constraints, industry minister, Mike Bimha said on Wednesday.

More than 100 companies are estimated to have closed or relocated from Bulawayo in the past three years, leaving nearly 20,000 employees out of work while over 10 Bulawayo companies were either liquidated or placed under judicial management between January and June this year.

“It’s government’s objective to resuscitate industry in this country not only in Bulawayo but in so doing we can’t resuscitate everybody,” Bimha told a World Bank Doing Business meeting.

“There are others who have died who should probably remain dead and there some which we should resuscitate first. That is the challenge that government and the private sector have to face.”

In January, the Bulawayo City Council announced a cocktail of incentives to ease the burden on the city’s struggling industries, among them a once-off 50 percent discount on amounts owed if the arrears were settled before June 30, saving the industry $1,2 million.

It also relaxed its intensive water rationing schedule – seen as the most detrimental to investment –  and waived penalties and interest rates on accounts owing.

Bimha also said that the manufacturing sector could also be operating at lower than 30 percent of capacity due to shortages of capital, echoing Confederation of Zimbabwe Industries (CZI) estimates in June.

“Ladies and gentlemen, key to note in our discussions is the low capacity utilisation and productivity level, estimated at 30 percent in June by CZI, and this could be worse than the reported levels,” Bimha said.

He said Zimbabwe should implement more reforms to attract increased foreign direct investment (FDI). Official figures show that the country received $67 million in FDI in the first six months of the year compared to $165 million over the same period last year.

“We need to be attractive, we need to have those features that make us attractive. I realise that a lot of work has been done in this area but we don’t seem to get our act together and I think that is the challenge that we have.”

COMMENTS

WORDPRESS: 12
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    We need to be attractive, we need to have those features that make us attractive. I realise that a lot of work has been done in this area but we don’t seem to get our act together and I think that is the challenge that we have.”
    How can that happen when the old man shouts at the people we need for investment.

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      tapiwa 8 years ago

      I beg to differ Doctor do little, as I believe a lot of work has been done to destroy Zimbabwe as a destination of investment and I agree with you that getting our act into the right direction is now has moved beyond being necessary to being mandatory

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    farai 8 years ago

    To those that control world financial markets, Zimbabwe is a less attractive investment destination than Liberia, Afghanistan and even Libya.

    I get worried when I hear high ranking officials from the ruling party start to talk about “making ourselves more attractive to FDI” They sound too much like members of the right wing opposition parties! The truth is we are very attractive, ask all these investors coming to invest in the country now. The CEO of a SA retail chain once remarked, “we intend to invest more in Zim, its the only country we can achieve margins above 30%” If that is not a reflection of our attractiveness then nothing else is.

    I sense that there are some within the ruling party who have bought into the lie that FDI will flock into the country once we fix our politics. This cannot be further from the truth, they demanded free and fair elections to remove sanctions, we had and still sanctions remained. And now the naive amongst us believe the long fairytake that FDI is attracted by anything else other than a good return, fibs! Bimha if u change winning policies u will destroy the Party .

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    farai 8 years ago

    Smith was never considered attractive but he attracted FDI. All because he controlled access to the most priced asset, the market. Currently Its more attractive for MNE’S to service Zimbabwe from SA, it makes economic sense. All you need to do Mr Minister is to make it more attractive for businesses to manufacture locally than export into the market. They will open the closed industries and capacitate them. Be strategic sir, think like Smith.

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    Be strategic sir, think like Smith. That’s one of the best statements I’ve heard from you Farai, that is if you mean put the best people on the farms, let those that want to invest invest with tax breaks for a few years to attract them. Repair the infrastructure. Get the public services going. Sort out the water problem country wide. Prosecute the corrupt people. Sort out the transport sector. That is how Ian Smith would think SIR.

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    farai 8 years ago

    By best I hope you mean BEST and not the previous defination that equated white to best. My own take is that the best are a function of education, training, exposure and an enabling policy regime. When the current land reform process has run its course, it will create this generation’s best.

    My apparent admiration of Smith is an acceptance of the fact that he adopted economic policies that suited his context primarily sanctions bursting and import substitution. And ensuring a life of privilege for even the most challanged of his kind. Albeit at the expense of the black majority. He however exposed the limits of his intellect by assuming that that model was sustainable. Measured by developmental indices Robert is a far better leader than Smith ever was but in terms of creating an economy that advanced his political objectives, Smith was craftier.

    That’s what I refer to as economics driven by political objectives.
    We should forget trying to attract FDi by sacrificing foundational principles, FDI wants what we have, a market with resources and sufficiently sophisticated to create demand for various goods and services. Lets control access to that market and it will force FDI to come. Smith did it, why cant we “did it too! ”
    We have some of the best investment incentives around but we can never beat SA for factor endowments but we can play ‘to our strengths. And access to our market is one of them.

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    When I say the best I mean the best. I have never been one to feel inferior or superior because of my race,however I believe some wrongs are beyond correction and I do believe that Mugabe went a bit too far with his policies which are not what he had promised at Independence.I believe his policies were designed to target his enemies rather than serve the nation. I believe that because some people supported the opposition and he took it out on all the people of that group. I believe he done the same with another tribe. Because of all this hatred to this day his judgement has been impaired thus he cut off his left leg (Bulawayo) because he was right legged and disliked his left leg. Now he has to stumble on one leg where as if Bulawayo was alive it would benefit not only Harare but the whole country. I don’t think I can refer to him as a far better leader because his leadership has caused a lot of suffering to a lot of people. What I can say is that there is no better in giving speeches than him. The problem is that his speeches don’t tend to go the direction of his actions. For a leader he does too many U turns and is prone to change his mind at the drop of a hat. I believe he has given himself too much power which he fails to control.I believe he rules like a king and he does not behave like a public servant but sees us as his subjects.

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    That about sums it up.

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    farai 8 years ago

    Many people dont understand Robert assuming he is a racist and a tribalist. He is neither, actually he is a moderate appeaser.

    I recall in his independence speech him saying, “we offer our hand in reconciliation but if that hand is spurned it will turn into a fist.”‘ It was and it did. I also recall him saying in one of his birthday interviews saying ” I feel more comfortable walking along Oxford Street. I cant walk along First Street because my security does not allow it” He also once said, “I have a lot of respect and admiration for the Queen and the Conservatives, but Blair and the Labour party, well….” That to me indicates a chronic Anglophile with aristocratic tendencies.

    I dont bellieve Robert ever had a plan for land reform, he actually supported, encouraged and valued white farming expertise but two events forced his hand. One was Hunzvi, the architect of land invasions and the reaction of white farmers (turning themselves into political agents by mobilising for the opposition) Robert at that time never reacted but the then VP Joseph Musika called on the police to deal with the invaders. That didn’t happen because war vets refused to go against war vets.

    As for Matebeleland, there was a provocation and a reaction and people got killed. in my view we have never been told about the causal issues but to reduce it to tribalism is lazy uninformed analysis. One key player called ‘it a “moment of madness”RGM another said “bad things were done by both sides” Dabengwa. I suspect radicals o’n both sides had war-time scores to settle and innocent people got killed, on both sides. I also believe that 20 000 figure is folklore designed with a specific end objective in mind.

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    farai 8 years ago

    Doctor, we hv digressed and we are now talking about personalities. The focus should be reviving Byo industries. Liberalisation policies introduced during ESAP, exposed the inefficiencies of the Smith economy we adopted at independence. it worked then because Smith tightly controlled the market. it failed to thrive in an open market. Blame it on Mugabe? No ways.

    I remember a raft of measures like special initial allowance and retention schemes that were introduced to assist industry to retool in anticipation of an increased competitive environment. Instead of retooling, industry took this as an opportunity to externalise retained earnings and dividends. Local industry thus lost the market. Blame who now?

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    Farai I don’t agree, but I respect your opinion because you have not been insulting or rude. There is nothing wrong with your opinion. I only hope that you will respect other opinions whether you think they are right or wrong. I have said that I as who I am will not hate. I will always listen. I have listened to my black and white brothers on this forum. I have listened to my Ndebele mixed race and Shona brothers on this forum. On this forum we have not liked what those that lead this country have made us become. If you like it Farai then rapour is no longer necessary. Just go for it and support the Goverment that at the moment are worrying about their positions rather than the suffering masses.

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    farai 8 years ago

    Doctor. I am not advancing personal opinion but undisputable historical fact without any emotional entanglements.

    Industry in Byo and the whole country died because it failed to react to changes in the local operating environment namely, liberalization and South African independence.

    To blame it all on Mugabe is rather rich. if we change the government will that result in Lever Bros changing its decision to rationalise its global manufacturing operations? I think not. All MNC rationalised their operations because opening up of markets made it possible. Blame it on Mugabe? I think not. I would rather we are analytical about these things, only then can we find solutions. Do u realise we no longer have industrialists in this country in the mould of the Schofields, the Waldens and the Carters. We have replaced these with a bunch of sCattered Accountants masquerading as industrialist. They understand cost cutting but know nothing about research and development, market development and product and process reengineering. They are not trained for that. We blame Mugabe, I think not.
    Having said all this the question still stands, how do we revive Byo Industries? My simple response is control the market and access to it and play to our strengths. And the other stuff you referred to like water, infrastructure and power is also crucial . This blame Mugabe for everything hobby does not provide solutions.