Dickson Mangena, Business Reporter
THE country’s manufacturing sector has the potential of absorbing 200 000 workers if Government puts in place legislative framework aimed at improving industry’s competitiveness, an official said.
Confederation of Zimbabwe Industries president, Mr Busisa Moyo, said the manufacturing sector had the capacity to increase job opportunities by 66 percent if the requisite policies to improve productivity and competitiveness are enacted.
“The manufacturing sector is employing about 88 000 people at the moment, as per our survey. We believe the sector can reach 200 000 with the right support,” said Mr Moyo.
He said employment figures in the manufacturing sector have remained stagnant over the last two years.
“The figure is flat and is not changing much over the last 12 to 24 months for medium to large scale manufacturing sector. The small scale manufacturing sector is not accounted for in this figure due to challenges with collection of statistics,” said Mr Moyo.
He, however, said there was a need to address salaries’ disparities in line with the country’s economic performance.
“The biggest incentive for labour intensive machinery is low, flexible and production related wages in US dollar terms.
Expensive labour pushes companies to employ technologies that employ less people,” Mr Moyo said.
Import restrictions (statutory instrument 64 of 2016) drove capacity utilisation to 47,4 percent in 2016 from 2015’s 34,4 percent as the manufacturing sector increased output to plug the gap, according to a report by the CZI. Mr Busisa Moyo is on record saying the Manufacturing Sector Survey 2016 results were in line with CZI’s desired goal of 65 percent capacity utilisation by the end of 2017, but stressed more needed to be done.
Zimbabwe’s manufacturing sector is relatively large and well-diversified partly due to the import-substitution policies pursued before and after Independence in 1980. The sector possesses strong direct linkage with the agricultural sector. Major manufacturing industries include agro processing, clothing and textiles, metals, wood and furniture, fertiliser, cement, packaging, beverages, chemicals, among others.
Between 1980 and 1990 the manufacturing sector accounted for 15 percent of formal employment and contributing up to 25 percent to GDP. The performance of the sector declined by more than 50 percent between 2000 and 2008 due to foreign currency shortages, lack of funding for capitalisation purposes, price distortions arising from price controls and hyperinflation, influx of cheaper imported goods, unreliable utility and energy supplies (electricity, water, fuel, coal) and recurrent droughts.
Due to industrial capacity utilisation and supply-side challenges, the economy has been absorbing disproportionately large amounts of imports of finished goods, further threatening the survival of the local industry.