Bimha has failed

via Bimha has failed – DailyNews Live  25 MARCH 2014

Industry and Commerce minister Mike Bimha knew exactly what he was getting himself into when he was appointed to the portfolio last year.
Bimha had his job cut out for him, well before he took office.

Deteriorating economic conditions in the country since the hyperinflationary period and the influx of cheap commodities during the last five years, made sure that he was set up for failure.

To his credit, the politician hit the ground running and promised to have New Zimsteel (formerly Ziscosteel) back on track by end of December last year.

After the political bickering that engulfed the inclusive government, it was assumed that with a new government in place, Zanu PF would deliver. But alas, as history has proved, he has failed to deliver.

It is now almost seven months since Bimha took office, yet the 3 000-strong Ziscosteel workers continue to wallow in poverty.

They last had a payout in 2012. Not even a plume of smoke has been seen at the Kwekwe-based plant.

As long as Ziscosteel remains in the doldrums, there is no way our industry can be revived.

A mere glance in the country’s industrial sites reveals a sad story. There is no manufacturing sector to talk about. The steel industry has been completely wiped out.

And all the hope Bimha had brought to millions of Zimbabweans who have been thrown onto the streets is slowly fading.

To cover up for his weaknesses, the minister is quick to point to businesses that “we are in this together and if we fail, we fail together”.

No minister! Stop comforting yourself. You have failed not only yourself, but the constituency you represent.

It was not industry that was appointed to Cabinet. It was you who took an oath of office. So blame lies squarely  with you.

It is not too late to admit that you have failed to revive industry and pave way for someone who is equal to the challenge.

The time for excuses is over. We strongly believe that President Robert Mugabe, if he cares about this country should immediately sack Bimha because he has failed in his task.

Industry is operating below 40 percent of capacity utilisation and this is expected to slump further as the year progresses due to lack of cheap capital to retool companies.

Mugabe rightly pointed out that time to blame sanctions is over.

What is needed at the moment are bright ideas to turn around fortunes of struggling industry.

Implementing policies that protect the local industry from an influx of cheap goods does not require funding.

Raising taxes for the importation of cheap raw materials, does not need money but may bring more money to Treasury.

It does not require rocket scientists to craft policies that help to address the porousness of our borders.

Only brilliant ideas can help revive this economy and clearly Bimha has proved that he lacks that.

Since last year, more than 75 companies have closed shop, thus rendering over 9 000 workers jobless.

Indications are that more companies will follow suit this year. Bimha has remained quiet, if not clueless.

Bulawayo is quickly becoming a ghost city; Gweru, Mutare, Masvingo are also losing companies at alarming rates.

Very soon, if nothing concrete is done, the few industries that are left will also follow suit.

The minister must put in place capacity utilisation and retooling loan facilities to encourage industries to increase productivity and boost their efficiency and competitiveness in preparation for the reduction and removal of tariffs in some cases.

An industrial bank mooted in the 2012-2016 industrial policy documents should become a reality.

The industrial bank objectives inter-alia include the provision of long-term finance to industry at concessionary rates for retooling.

This will enable the country to build industrial capacity and produce for export. Alternatively, government may consider setting up a Sovereign Wealth Fund.

The country is mainly concentrating on exporting primary products which are vulnerable to physical factors such as droughts and international prices volatility.

It, therefore, becomes necessary for Bimha to encourage a diversified export basket through value addition and production of high-technology goods.

In order to save inefficient industry from total collapse due to displacement of local products by efficient foreign firms, there is need to pull up a list of products so that they can be exempted from trade liberalisation.

However, the protection must be tactical rather than absolute.

Tactical protection entails the pursuit of a protection strategy that targets those industries where the country has an unquestionable comparative advantage and where we can produce cheaply under the circumstances.

Absolute protection would definitely have unintended consequences such as product shortages and price hikes.

Adopting these products on the sensitive list for saving de-industrialisation will save not only the industry from collapse, but also has a multiplier effect of increased revenue generation as the saved industry will generate and sustain employment which will create more fiscal space from improvements in Pay As You Earn, Value Added Tax, excise duties and corporate tax.