Zimbabwe’s manufacturing sector, once a significant contributor to the nation’s economy, has seen a steady decline over the past few decades. A recent report by the Confederation of Zimbabwe Industries revealed that the sector’s contribution has dropped from 23% in 1980 to just 9% in 2023. This sharp decline has prompted the government to take urgent action to revive the country’s industrial capacity.
The decline in Zimbabwe’s manufacturing sector has been driven by several factors. These include volatile currency and exchange rates, the influx of cheap imports, insufficient value addition to raw materials, frequent power cuts, outdated technology, inconsistent policies, and rising production costs. All these challenges have made it difficult for the sector to thrive.
In response, the government is now focusing on addressing these issues through a comprehensive industrialization policy. Speaking at a recent event organized by the Zimbabwe Economic Society and Friedrich-Ebert Stiftung in Harare, Finance, Economic Development, and Investment Promotion Permanent Secretary George Guvamatanga emphasized the need for the country to move beyond just producing raw materials.
“We need to focus on value addition and beneficiation because until then, we remain just producers of primary raw products, which doesn’t help our industrialization efforts,” Guvamatanga said. He acknowledged that while the government is working on an industrialization policy, other fundamental challenges must be addressed first, such as improving the country’s power supply and rail infrastructure.
One of the biggest obstacles to Zimbabwe’s industrial growth has been the unreliable power supply. Daily power cuts, sometimes lasting for hours, have severely impacted production, forcing manufacturers to rely on costly generators or solar power. Guvamatanga highlighted the government’s plans to refurbish the Hwange thermal power station, one of the country’s primary power sources, to boost electricity generation.
“Currently, our power generation capacity is heavily affected by climatic shocks, especially since we still get 30% of our power from hydro-based sources like Kariba Dam,” he explained. During droughts, the water levels in Kariba Dam drop significantly, reducing the power generation capacity and leading to widespread power shortages.
In addition to power challenges, the lack of a modern rail infrastructure has been a significant bottleneck for the country’s industrialization efforts. Zimbabwe’s rail system, once a critical component of the nation’s industrial framework, has deteriorated over the years. The Southern Africa Railways Association estimated in 2018 that upgrading the rail infrastructure would cost about $1.7 billion.
Guvamatanga revealed that a delegation from the Mutapa Investment Fund, which now oversees the National Railways of Zimbabwe (NRZ), is currently seeking funding to revitalize the rail system. “There’s a delegation out of the country right now, working on finalizing a structure to get our rail system back on track,” he said.
The government’s plans to tackle these infrastructure issues are part of a broader strategy to industrialize the country and shift from exporting raw materials to producing high-value commodities that can compete on regional and international markets. Guvamatanga stressed that a complete structural adjustment is necessary to achieve this goal.
“The only way forward for Zimbabwe is a complete structural adjustment on how we industrialize and convert primary products, which we have in abundance, into usable and sellable high-value commodities,” he said. This approach, he believes, will not only revive the manufacturing sector but also strengthen the overall economy.
As Zimbabwe moves forward with these plans, the hope is that addressing the critical issues of power and rail infrastructure will lay a solid foundation for the country’s industrial revival. By focusing on value addition and modernizing essential infrastructure, the government aims to reverse the decline in manufacturing and drive economic growth.
While challenges remain, these efforts signal a renewed commitment to industrialization, which could pave the way for a more prosperous and self-sufficient Zimbabwe. The coming years will be crucial in determining whether these initiatives will successfully restore the manufacturing sector to its former glory and help the nation achieve long-term economic stability.
Source: Newsday
