The ManicaPost
Kudzanai Gerede: Business Correspondent
Manicaland province emerged with the highest number of operating business establishments (5 895) in the country, a feat that has reaffirmed its status as a leading economic hub with potential to steer the country’s economic recovery path, latest official figures have shown.However the results reflect a worrying development for Manicaland as it lags behind other provinces like Harare and Bulawayo with lesser business establishments in terms of employment, wages/salaries and turnover figures.
Contributing 14.8 percent of a total 39 757 business establishments noted countrywide, the country’s first ever Central Business Register (CBR) Inquiry Revised Report 2015 revealed that Manicaland topped Harare and Midlands provinces who had the second and third highest number of business enterprises with 5 450 (13.7 percent) and 5 042 (12.7 percent) respectively.
The CBR Inquiry Revised Report 2015, which was launched in Harare on Wednesday last week was undertaken by Zimbabwe National Statistics Agency (Zimstat) between 2012 and 2015 for statistical purposes that shall be used as a sampling frame for business censuses and surveys.
It covered all business establishments countrywide (outside agriculture) operating at fixed locations which were either registered or licensed by any arm of Government excluding Government ministries following International Standard Industrial Classification of all economic activities regardless of their employment or turnover sizes.
Economic activities under study were classified under mining and quarrying, manufacturing, transport and storage, construction, real estate activities, accommodation and food services activities, financial and insurance activities, information and communication, education and wholesale and retail trade, repair of motor vehicles and motorcycles.
The combined wholesale and retail trade; repair of motor vehicles and motorcycles industry constituted the major economic activity in Manicaland (63 percent of businesses) accounting for 3 716 out of 5 895 business establishments in the province above education and manufacturing sectors with 732 and 676 establishments respectively.
The study further highlighted the province’s economic resilience as Manicaland emerged with the highest number of business establishments that have continued to exist for the past 30 years and above (919) followed by Midlands with (727).
Manicaland also has most of the youngest business establishments that have operated for a year and less (979) which analysts noted as a positive development for the growth of the province’s economy.
However the study revealed a worrying development; despite the province harbouring the highest number of business establishments, Manicaland had little to show for its dominance as employment levels fell far below that of provinces with lesser establishments.
Overall national figures showed that 57 percent of all licensed or registered businesses in the country were run under the sole proprietorship system which spelt out that most business enterprises fell in the small and medium enterprises category hence the low employment figures.
Manicaland constituted 10.1 percent (32 043) of total employment trailing Bulawayo and Harare who had 17 percent (53 543) and 40,1 percent (126 636) respectively.
This was worsened by the fact that the province also came out with the highest number of dormant establishments, 63 companies, which constituted 16,5 percent of total non-productive entities in the country.
Dormant establishments are those companies whose daily transactions were limited to, for example, the payment of shares or fees to the registrar of companies, with no production taking place.
“As Manicaland we are resource rich, more so very economically active in the national economy and our province is very big in size and we believe that strongly supports the results in the study,” Confederation of Zimbabwe Industries (CZI) Manicaland president Mr Richard Chiwandire told Post Business in a telephone interview.
He noted that the high rate of dormant companies in the province attest to the massive deindustrialisation that has ravaged Manicaland particularly its provincial capital of Mutare which used to be an industrial hub.
The current moribund state of Nyakamete industrial area which used to boast of vibrant industries like Mutare Board and Paper Mills and Hunyani Papers among others and fed on raw materials coming from satellite communities across the province has inflicted negative downstream effects on most business establishments operating in Manicaland.
“Industries here have suffered owing to the general economic deterioration which has forced many companies to close shop, look at Mutare Board and Paper Mill or Karina, they have all gone. Our exporters are no longer competitive as we have high cost of production and a stronger currency.
“There is however optimism especially with the high number of dormant entities in the province whose executives still anticipate an economic upturn and they can’t shut operations because they are aware Manicaland is a potentially lucrative business destination,” said Mr Chiwandire.
Analysts have bemoaned lack of participation in more productive activities like manufacturing and mining development in the province which have a far much bigger returns on both the companies and local communities in terms of boosting employment and production output figures.
Statistics show that more productive activities have better returns and enhance employment figures compared to service activities such as wholesale and retail, repair of vehicles and motor cycles which dominated much of Manicaland’s economic activities.
On a national scale, services activities like wholesale and retail, repairs of vehicles and motor cycles constituted 57 percent of business establishments against 12.6 percent in manufacturing activities but in terms of employment volumes manufacturing emerged stronger accounting for 75 000 employees while the former employed 65 000 people.
This supports the argument why Manicaland establishments fared badly in the employment figures, salaries and wages and annual turnover against other regions despite having the most number of business enterprises.
The study suggests that Manicaland businesses issued US$ 137 500 181 (5 percent of national total) in salaries /wages and allowances behind Midlands US$ 184 659 654 (6.4 percent), Bulawayo US$ 868 651 745 (31.4 percent) and Harare US$ 1 250 535 416 (45.2 percent).
“We are looking at ways in which we can draw small economic players into the main stream manufacturing industry because we have a lot of timber, minerals, horticulture products and even the macadamia nuts in Chipinge as we realize the need to bring more players into manufacturing activities by adding value these raw materials,” said Zimbabwe National Chamber of Commerce (ZNCC) Mutare Chairman Mr Kenneth Saruchera.
“Our aim is to see that we promote manufacturing value chains in Manicaland and all these are raw materials that we earmark to value add and give us higher returns in terms of employment creation, turnover and total output.
“This is something we are working on and this was discussed in the recent visits by Vice President Emmerson Mnangagwa and minister of Industry and Commerce. Initiatives such as the opening of the new oil manufacturing plant are what we want to facilitate in the province as you can see it brought some life in our industry and many people have been employed,” said Mr Saruchera.
