Mangaliso Ndlovu
He told captains of industry and commerce at a meeting that drought, Cyclone Idai, foreign currency and power shortages were among major challenges curtailing industry performance, state news agency New Ziana reported.
“As long as our capacity utilization is less than 60 percent, it shows that there are inefficiencies that we have and that we are pushing a lot of overheads into pricing, which makes our products non-competitive,” he said.
In the past five years, capacity utilization in the manufacturing sector has failed to breach the 50 percent mark, peaking at 48.27 percent in 2018.
This year’s drought has impacted negatively on the agriculture sector, a key supplier of raw materials for the manufacturing industry.
The situation has been compounded by the shortage of foreign currency for imports of key inputs.
Power shortages, exchange rate instability as well as high inflation now at around 175 percent, were also weighing down the industry.
“We are monitoring the prices of 14 products which have gone so high in the past few months,” he said. “The price increases were mostly influenced by an exchange rate which was rising at an exponential rate,” he said.
However, Ndlovu lauded the return of the Zimbabwean dollar, saying the move would improve competitiveness of local goods on the export market.
“I have no doubt a local currency was what we needed now, particularly as we venture into the export market,” he said.
Post published in: Featured