Market News

INDUSTRY and Commerce Minister, Dr Sekai Nzenza, says increased collaboration between productive sectors is critical for the country to boost domestic production and effectively substitute unnecessary yet costly imports.
As a result of subdued domestic production, which has seen manufacturing capacity utilization drop to 36,4 percent in 2019 from 48,2 percent in 2018, according to the Confederation of Zimbabwe Industries (CZI), Zimbabwe is heavily reliant on imports for both raw materials and essential consumer goods.
For instance, the country's merchandise imports clocked US$4,8 billion in 2019, compared to cumulative export estimate of US$4,5 billion, the Reserve Bank of Zimbabwe reported. The apex bank noted that exports were largely weighed down by lower agriculture and mineral exports, tobacco and gold in particular.
Sustained power outages, persistent fuel shortages, foreign currency challenges and high operational costs amid rising inflationary pressures, among other factors, adversely affected production in the mining sector and consequently mineral exports.
The trend persistently piles pressure on forex requirements at a time when foreign direct investment and diaspora remittances through formal channels are also minimal.
A combination of reduced local output, limited exports and prevailing exchange rate distortions, have compounded the situation, thereby frustrating viability of local producers and heightening the plight of consumers.
Due to shortages in supply of some basics, Government last November relaxed import regulations to allow individuals with free funds to buy basic goods from outside the country.
In an interview, Minister Nzenza admitted that this duty-free import window has created new complications in the form of sprouting of and thriving informal sector, which has stacked pressure on registered players.
She noted that in her engagement with industry stakeholders, big corporates have raised complaints over unregulated informal activities that are squeezing out their operations.
"I have spent the last three months consulting captains of industry and key stakeholders to hear their concerns and what is working well or not.
"I have met CZI, retailers, millers, small and medium enterprises and different private sector players.
"In 2020, we are saying industry's role is to promote growth. We went to Inyanga for a review of our strategy and we are working on promoting local production, which buttresses the thrust of import substitution," said Dr Nzenza.
Source: Allafrica.com