via Zimbabwe manufacturing in ‘dire’ state: industry | Fox News October 02, 2013 AFP
Zimbabwe’s manufacturing sector is in a dire state due to poor infrastructure as well as shortages of capital, electricity and water, an industry association said Wednesday.
Most companies are operating at under 40 percent of their capacity, the Confederation of Zimbabwe Industries (CZI) said in a report.
“It is a very dire situation in industry,” said CZI president Charles Msipa.
“Capacity utilisation is reducing, in some accounts by alarming margins, pointing to downstream effects such as underemployment, retrenchments, and reduced activity of the domestic economy.”
A decade of economic downturn amid political turmoil saw many companies pulling down the shutters, downsizing or relocating to neighbouring countries.
Unemployment skyrocketed and the nation became increasingly dependent on imports mainly from neighbouring South Africa and China.
At the height of the crisis annual inflation peaked at 231 million percent, forcing authorities to discard the local currency which had been rendered worthless.
The economy slowly started recovering after Mugabe shared power with his rival Morgan Tsvangirai following violent disputed polls in 2008.
But despite the subsequent stability, electricity and water supply remains erratic and is one of the main brakes to manufacturing according to the CZI.
Companies also lack working capital and decry the bad conditions of roads and railways.
“Since 2009 industry has continued to be plagued by the same factors, and the situation is now dire and in need of urgent redress,” according to the federation.
Mugabe, who was re-elected on July 31, deplored declining production levels in a speech to parliament last month.
But he also vowed to continue with a policy to take over majority stakes in foreign-owned firms.
He has already forced foreign-owned mines to cede 51 percent shares to black Zimbabweans.
The finance ministry in July reduced the country’s growth forecast for this year from 9.4 percent to 5.6 percent.
The July poll extended Mugabe’s 33-year-rule and ended the unity government, but local and international observers denounced it as unfair.
COMMENTS
Why do people who should know better keep saying that inflation reached 231 million percent…that is what it was when last officially recorded…it continued to rise and reached much higher levels until becoming virtually impossible to calculate and the Zim dollar became unacceptable as currency, no matter how big the denominations, no matter how much was printed and how many zeros were knocked off. Another record achievement by ZANU PF. While people say that the inflation is the second highest ever, hyperinflation in the record holder Hungary only lasted a year.Some economists have calculated Zimbabwe’s inflation as being 89.7 sextillion percent (89,700,000,000,000,000,000,000%) in mid-November 2008…or about 100% per day.
I agree Ivor, you cannot have a 100 trillion dollar note within a year and 231 million % year-on-year inflation! 2008 was a horror year and already in the report, there are signs that it might happen all over again, with ZPF in “power”!!
I was in the country recently, slept at a hotel where there was no water at night and in the morning there was no electricity in the whole town, businesses were at a standstill, government offices closed, nothing was happening! Those lucky few who could afford generators had some business going, otherwise everything else was at a complete standstill. How can you run down a country like this and still expect the people to respect you? Incidentally, the situation has gotten much worse just after the elections…
So Greyhora, most of the time you talk from hearsay. You’ve been in the country recently and who do you want to please with your story when most of us are always here??????????
Keep your dramatized story to yourself.
The tail is wagging the dog !