Zim’s GDP spiraled down to 12 percent (03-07-07)

By Khanye Bhebhe

ZIMBABWE'S manufacturing sector's contribution to the Gross Domestic Product (GDP) has spiraled down to below 12 percent as a result of the country's economic crunch that has severely hit the sector.

This is contained in a 2007

survey by the Confederations of Zimbabwe Industries (CZI) Manufacturing Sector that raises concern over the continuous decline in the sector’s contribution to GDP.

According to the CZI Manufacturing survey, the sector now falls behind agriculture in terms of contribution to GDP with capacity utilization.

“The manufacturing sector is estimated to have declined by 7 percent in the 2006. This compares with a growth of 3, 2 percent that had been registered a year earlier,” read in part the survey.

It added: “The highest level of capacity utilization registered by companies in the sample survey was 70-80 percent and only two companies were in that range.”

Industry has cited perpetual foreign currency shortages with 69 percent of the companies surveyed citing it as the major restraint while electricity outages, water cuts, brain drain and unsound macro economic policies were some of the major pull back factors.

The report advised that underpaying labour was not sustainable as that only served to kill demanded for the produced goods and “as such companies were urged to pay realistic prices for labour.”- CAJ News.

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