The Sunday News
Roberta Katunga, Senior Business Reporter
THE Confederation of Zimbabwe Industries (CZI) has come out in defence of its industrial survey which indicates a 13,1 percent increase in capacity utilisation in the manufacturing sector amid questions over the authenticity of the findings by a section of economic analysts.
The economists argue that the recorded increase was only a reflection of individual companies that have benefited from Government protection through various Statutory Instruments.
The manufacturing sector capacity utilisation increased from 34,3 percent last year to 47,4 percent this year, a development that others argue is a distortion as on the ground, a number of companies have closed shop.
CZI president Mr Busisa Moyo said output has increased in general and despite company closures, new ones have opened.
“We believe that output has increased in general and while companies have closed, new companies have opened and so the losses and gains in industrial firms somewhat cancel out,” said Mr Moyo.
He said promulgation of Statutory Instrument 64 of 2016 by Government has assisted this growth to a large extent. The SI restricted the importation of at least 43 products.
In separate interviews, economists said SI 64 which is not the only instrument promulgated by Government to protect industry but the most recent, had paid dividends to individual companies.
Dr Bongani Ngwenya disputed the increase in utilisation reported saying it was not a true reflection of an improvement of the general economy as the country’s import bill is still high with domestic demand exceeding supply.
“The increase that is being talked is still marginal because over the same period we are seeing imports increasing. This simply means that our challenges of trade deficit are still there hence industry in totality has not reached a level of being able to meet domestic demand of goods,” said Dr Ngwenya.
Dr Ngwenya said the 13 percent increase might not be fictitious but it only reflects growth in individual companies that have benefited from Government protection.
He said as long as the country’s capacity utilisation has not gone to the level that is reversing the trade imbalance trend that exists then there is still an unhealthy situation.
“The economic situation in Zimbabwe needs bold structural economic reforms that will address trade imbalances,” he said.
However Buy Zimbabwe chief economist Mr Kipson Gundani said people have to take into cognisance that Government introduced a number of measures to improve production including statutory instruments on pharmaceuticals, cooking oil and milk and milk products among others.
Mr Gundani said an assimilation of these protective measures significantly contributed to the increase in capacity utilisation.
“This is a fair representation of what is happening on the manufacturing sector in terms of capacity utilisation development.
CZI statistics are a scientific measure of output and an average is generated from the survey.
‘‘Although utilisation will differ according to companies that have received Government protection and those that have not, the 13.1 percent increase is justifiable,” he said.
According to the survey results, capacity utilisation of companies in Harare averaged 48,3 percent, Bulawayo averages 44,3 percent and Manicaland and Midlands 43 percent and 33,3 percent respectively.
