Govt challenges firms
DO not be obsessed with negativity but increase value addition and import substitution in order to survive during and after the Covid-19 crisis, a senior Government official has said.
The Covid-19 pandemic, first detected in China last December, has already placed a strain on global economies and many companies and organisations are in pain. Zimbabwe has not been spared by the pandemic as its negative effects are already being felt across sectors, among them being reduced output due to lockdown.
Sectors such as tourism, transport, sports, entertainment and catering have been severely affected by the pandemic with effects cascading to the overall economy.
However, it is not all doom and gloom for the country as sectors such as pharmaceuticals, chemicals and detergents, protective clothing, food and agriculture have an opportunity to grow and therefore require all the support they can get to enhance their value addition and import substitution initiatives.
Industry and Commerce Minister Dr Sekai Nzenza, said these sectors have an opportunity to increase production for both the local market and export, which will earn the country the much needed foreign currency.
Import substitution will be necessary to also cover the gap left by imports and boost demand for locally manufactured goods.
“This thing (Covid-19) has come and we can’t change it, so don’t be obsessed with focusing on the negative but let’s look at the positive side and reposition ourselves,” she said during the second phase of the economic outlook post Covid-19 conference hosted by Global Renaissance Investment (GRI).
Dr Nzenza was represented by her Ministry’s Permanent Secretary Dr Mavis Sibanda.
“Let’s change the way of doing business, let’s increase production, let’s do new things, there is an opportunity to cover the gap left by imports. Value addition is also a must for us to survive,” she said.
Local industry has for long relied on imports for essential raw materials while the Zimbabwean market has also been subjected to imported finished products. But global supply chains disruptions due to the pandemic have resulted in manufacturing industry failing to access some imports due to travel and trade restrictions. As such, this was an opportunity to boost local production and increase demand by taking advantage of the stimulus package recently announced to recapitalise industry.
She added that already there was notable increased demand for local goods in the pharmaceuticals, packaging, protective clothing and chemicals with new players also coming into the sector. Other companies outside manufacturing such as those in the telecoms sector were also enjoying good business as the market embraces e-commerce.
She said this was encouraging and Government was prepared to support such to boost production for domestic demand and eventually for the export market. This will also be in support of the implementation of the local content policy. Prior Covid-19 crisis, local manufacturing industry’s capacity utilisation had been low due to foreign currency shortages, erratic utilities supplies, limited access to financing for retooling with some of the machinery outdated and therefore weighing on production.
Speaking at the same conference, Zimbabwe Investment Development Agency (ZIDA) chairman and former CZI president Busisa Moyo, said there was need to re-industrialise, paying attention to the base of the hierarchy of needs and be self-sufficient in the event of crises like the current Covid-19.
Global economies are seen shrinking in 2020 due to the pandemic. The World Bank already sees the Sub Saharan Africa region’s economic growth slide into the negative due to reduced production especially in agriculture as well as depressed tourism as travel.
GRI chief executive officer Ngoni Dzirutwe concurred there was need to increase self-sufficiency as Zimbabwe and the entire region were still “overly reliant on trade deals and support from the developed world.”
Growing own economies, he said, would be crucial in positioning the country and Africa in general as an investment hub, while also improving skills to beneficiate local resources.