28 January 2013

Zimbabwe: CZI to Host Economic Symposium

THE Confederation of Zimbabwe Industries is this week expected to host its annual economic outlook symposium hoping to unpack missing links critical for faster and sustainable economic growth and development in Zimbabwe.

CZI said this year's economic outlook series will be held on Thursday at the Meikles Hotel in Harare under the theme "2013: Year for Decisive Action", underlining the urgent need to return the economy to a firm growth and development trajectory.

According to a statement released by CZI last week, the cast of main speakers at the economic seminar includes Finance Minister Tendai Biti, Professor Tony Hawkins of the University of Zimbabwe, renowned agriculture economist Professor Mandivamba Rukuni and human resources specialist Mr Memory Nguwi.

Professor Hawkins will present on loopholes in Zimbabwe's policy provision, co-ordination and implementation, Professor Rukuni will speak on dynamics between linkages in agriculture and manufacturing to achieve competiveness while Mr Nguwi is expected to speak on productivity-based remuneration as the panacea for job creation and stability.

Zimbabwe is expected to register slower economic growth this year due to a number of factors chief among them the impact of sanctions imposed by Western countries, limited foreign investment, expensive short-term funding, tight liquidity, shortage and high cost of electricity and utilities among other challenges.

Economic growth shot up to 7 percent in 2009, 10 percent in 2010 and 9,3 percent in 2011 before slowing to about 5,4 percent last year, but has potential to register double-digit growth if challenges such as sanctions are removed and erratic power supplies addressed. Minister Biti revised economic growth forecasts to 4,4 percent from the initial 9,4 percent last year.

Presenting the 2013 National Budget, Minister Biti projected the economy to grow by 5,5 percent this year underpinned by growth in mining and agriculture (assuming farmers get enough support and that there are good rains).

CZI president Mr Kumbirayi Katsande said most of the challenges that rocked manufacturing industry last year would continue to militate against industry this year.

"Fundamentally, for the manufacturing industry, the challenges that we faced last year will continue into the current year.

"With the issues of funding, electricity and liquidity, I'm am not quite sure that industry will be able to take advantage of the available opportunities.

"Basically, the challenges that dogged industry last year will persist this year.

"How the economy will perform this year will depend largely on the performance of the agriculture sector.

"It will be very critical that the sector performs well. If the agriculture sector performs then the economy might do well this year.

"I believe how the sector performs is going to be key and if it does, that will keep the economy going (as has been happening since the formation of the inclusive Government) assuming mining will continue growing as before.

"As we talk about the growth of the economy, we have to look at the number of graduates coming from universities and colleges. Employment creation will be key.

"Where are all the graduates who finish studies going? Often we talk about it, but little is done to address the problem (of unemployment). Surely, we have to talk about the numbers (with regards to employment creation) and do something about it.

"Generally, I think it is going to be a difficult year. What measures have been put in place for industry to cope with the challenges? If nothing (or little) has been done, then until we deal with these issues the economy will not do well."

Industry requires an estimated US$2,5 billion just to replace old equipment and machinery to enhance efficiency, according to Industry and Commerce Minister Welshman Ncube.

The 2012 CZI State of the Manufacturing Sector Survey pointed to a stagnant performance, with the average manufacturing output growing below 2 percent and therefore reaffirming CZI's call that the country is in a serious economic crisis which needs urgent attention.

The survey shows that capacity utilisation in the manufacturing sector has declined from 57,2 percent in 2011 to 44,2 percent with the worst performing manufacturing sub-sector - the leather and allied products - operating as low as 27,5 percent.

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