Zim manufacturing output nose-dives

HARARE - Zimbabwe's manufacturing output declined at a much faster rate of 28 percent in 2007 than the 18 percent drop the previous year, highlighting President Robert Mugabe's inability to break a vicious recession ravaging his country's once brilliant economy.

The Confederation of Zimbabwe Industries (CZI) – considered the voice of business in the country – said on Wednesday that the latest sector survey showed several companies operating at close to zero percent of capacity owing to a plethora of difficulties including government price controls and shortages of foreign currency to import raw materials and machine spares.

Whereas 60 percent of the respondents (to the survey) reported capacity utilisation levels below 35 percent, there is a significant 13 percent of the respondents who reported capacity utilisation well below 15 percent, with some of these close to 0 percent capacity, the CZI said.

On average, manufacturing capacity utilisation plummeted to 18.9 percent last year compared to 33.8 percent in 2006.

The CZI said business confidence levels in 2007 dropped to a shocking two percent, in a way reflecting a bleak mood gripping Zimbabweans even as Mugabe’s ruling ZANU PF party this week began talks with the opposition to try to end the country’s long-running political and economic crisis.

“A summary of the business confidence levels over the years shows a drop in business confidence to two percent (down from five percent in 2006),” CZI said in its 2008 state of the manufacturing sector report.

The industrial body said employment numbers declined in 2007, which has been the trend that has been running for at least nine years now. And more worryingly, the CZI said of those workers lucky enough to be holding a formal job in Zimbabwe today many were earning less than the living wage.

However, further analysis shows that the workforce is not being paid a living wage. Transport costs in a number of instances were higher than the actual salaries earned by staff, the CZI said.

There was no immediate response to the CZI report from Industry Minister Obert Mpofu and the Zimbabwe Congress of Trade Unions.

Critics blame Zimbabwe’s crisis on political repression and wrong economic policies by Mugabe and say the crisis had worsened following the 84-year old President’s disputed and violent re-election in the June 27 presidential run-off which was boycotted by his challenger Morgan Tsvangirai.

Top officials from ZANU PF and Tsvangirai’s MDC party were expected to begin full-scale negotiations on Thursday aimed at forming a power-sharing government seen as the best way to end Zimbabwe’s crisis.

But political analysts remained wary that the talks in neighbouring South Africa could collapse over who will lead the new unity government. – ZimOnline

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