'Closure of firms is nationwide,' says Eric Block

Published: 10 June 2013

DE-INDUSTRIALISATION is affecting the whole country despite the misconception that Bulawayo is the only city being affected by the closure and relocation of firms to other towns, an official has said.

Speaking at the Confederation of Zimbabwe Industries Matabeleland chamber's annual general meeting, economic commentator Dr Eric Bloch said a research conducted by CZI in September last year showed that all major cities had been affected by de-industrialisation.

"People throughout the country including Bulawayo residents have the belief that Bulawayo is the only city affected by the closure and relocation of firms to other towns.

"Last year we conducted a survey which proved that the closure of firms is a nationwide phenomenon but the Bulawayo situation seems severe because the city was once the industrial hub of the country," he said.

He said companies in Mutare, Gweru and Harare among others were facing a similar fate as the manufacturing sector in Bulawayo.

Erratic power supplies, shortage of working capital and antiquated equipment were the major fundamentals stifling productivity in the manufacturing sector.

The country requires 2 200 Megawatts but at the moment the power utility was presently producing about 1 600 megawatts.

In addition, the entire manufacturing industry needs an estimated $2 billion to operate at competitive levels.

And because of the operational constraints in the manufacturing sector, capacity utilisation was at 44,2 percent, according to a manufacturing survey report released by the CZI in 2012.

Dr Bloch said Government and policy makers had failed to realise the essentials to the sustained survival of the industrial sector.

"Our industrial sector needs infrastructural upport which includes constant supply of energy and water in order for firms to recover and achieve growth.

"Most firms are affected by erratic telecommunications networks which make it difficult for local firms to stay in contact with their suppliers and customers,"

He said the country had numerous economic policies that diminish consumer spending noting that an estimated 87 percent of the population was surviving below the Poverty Datum Line.

"Most families are struggling to obtain basic needs including balanced diet rendering 56 percent of the population to be subjected to starvation hence diminishing the market for industry.

"The situation is compounded by uncompetitive taxation laws as well as massive inflow of foreign manufactured goods especially from China and India," he said.
- TC