HARARE - Export market competitiveness by local industries has dramatically declined owing to high production costs that have been accelerated by high utility charges, an economist revealed. (Pictured: Cheap products from countries such as China have flooded the local
Dr Erich Bloch said the cost of production by local companies is the highest in the region. “Industrial productivity fell sharply, particularly due to erratic and irregular energy supplies, and partially due to the inadequacies of working capital,” he said.
The economist said that for companies to remain afloat the Government needs to be effective in reviewing customs and allied duties to ensure a level playing field between locally produced and imported products.
The local market is flooded with cheap goods from other countries, this has resulted in many companies getting an unfair competition. Dr Bloch said there was need for the government to be stringent in containing smuggling and circumvention of liability to duties. He said almost all businesses were grossly under-capitalised as their working capital was eroded by losses sustained during the pronounced 2008 hyperinflation era.
This was further massively reduced by the currency demonetisation in February 2009 and against this background Dr Bloch said for them revive the Government needed to genuinely reconcile with the international community and show credible assurances of security of investments.
He added that it should endeavour to woo investors by introducing meaningful investment incentives.
Post published in: Agriculture