Chido Chikuni Post Correspondent
DR Gift Mugano, a young renowned economist conducted an exciting survey on the 2016 State of the Manufacturing Sector. The study revealed that there was growth of the local manufacturing industry as a result of Statutory Instrument (SI 64) of 2016.
SI 64 of 2016 is a Government policy measure aimed at resuscitating local industry. The gazetting of SI 64 in June 2016 saw the removal of 43 products from the Open General Import License. Since then, SI 64 has been yielding positive results in the local industry.
SI 64 was strongly resisted by elements who wanted to see Zimbabweans in perpetual suffrage. These elements, who were motivated by nothing but politics, staged violent demonstrations in Beitbridge, Harare and other parts of the country, destroying properties worthy millions of dollars. Now that the instrument has borne fruits, detractors now have egg on their faces. The SI 64 has become the biblical stone that builders rejected, but eventually became the cornerstone.
Dr Mugano’s survey titled: ‘The Impact and Shortfall of SI 64 and Defining the Local Content Alternative: from SI64 to Local Content’, revealed that there was an increase in capacity utilisation by 13 percent, that is from 34.3 percent to 47.3 percent.
In simpler terms, capacity utilisation can be defined as a measure of extent to which the productive capacity of a business is being used. This could also mean that the actual level output will be compared to the maximum possible output.
According to the survey, some sections of the local industry that confirmed growth include the furniture, detergent and pharmaceutical sector.
This year, Industry and Commerce Minister, Dr Mike Bimha toured Hanawa Super Foods, which is one of the direct beneficiaries of SI 64. Hanawa Super Foods is located in Ardbennie, Harare and specialises in the production of potato crisps.
According to Hanawa’s management, manufacturing of their product increased after the introduction of SI 64.
According to the Confederation of Zimbabwe Industries Capacity Utilisation Survey for 2016 report, Schweppes, a manufacturer and distributor of non-carbonated still beverages, acquired 100 percent of Beitbridge Juicing in 2014.
In addition, Schweppes supplies orange concentrate, orange oil, orange essence oil, mineral water and grapefruit juice also recorded a 15 percent increase in its sales.
The report also highlighted that Datlabs, a local pharmaceutical company recorded a 60 percent increase in sales while KDV, a local manufacturer of mattresses and beds, increased its capacity to 85 percent.It is, therefore, essential for Government to protect the local industry in order to keep it viable for economic growth. In that regard, Zimbabweans should be encouraged to buy local products in order to prop up growth of the manufacturing sector.
Besides protecting the local industry, SI 64 also seeks to reduce the import bill. In addition, SI 64 has a potential to increase the local revenue collection. Thus, increased sales from local companies contribute significantly to Value Added Tax (VAT).
Pleasing to note is that some brands that had been missing on the local market are now available. There were many local brands that offered quality products ranging from cooking oil, snacks, petroleum jelly and detergents. For instance, local brands such as Elegance, Cashel Valley and Willards had vanished from the local market for quite some time. Most shelves were dominated by South African products such as Delight cooking oil, Simba and Lays potato chips.
Before the illegal economic sanctions were imposed on the nation, Zimbabwe used to be the second highly industrialised country after South Africa in the southern region. However, the illegal sanctions weakened the local industry to an extent that production output of giant companies like Olivine grossly dwindled and eventually petered out.
Buy Zimbabwe campaign which buttresses SI 64, promotes the production and consumption of local goods and services. The main thrust of SI 64 together with Buy Zimbabwe Campaign is to unlock the country’s economic potential through propping up the local industry.
Promoting local industry encourages employment creation. When more local firms are functional, it means more jobs will be created for the indigenous people, which is in line with the objectives of the economic blue print, Zim-Asset.