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A commitment to economic turnaround

It gives me great pleasure to address you on this auspicious occasion of the 11th International Business Conference being held on the sidelines of the 58th edition of the Zimbabwe International Trade Fair.

Our nation takes pride in this premier business conference that creates a business networking environment and provides decision-makers from multi-sectoral institutions in Zimbabwe with an opportunity to discuss pertinent business issues.

I would like to express my sincere gratitude to the National Economic Consultative Forum and the Zimbabwe International Trade Fair Company for jointly convening this important event on our business calendar, and for the honour accorded to me to make a few remarks at this conference, whose theme reads, “Harnessing Linkages for Industrial Development”.

This theme is most germane as it resonates well with us as a country where, in order to attain development, there is need to relook at how our value chains can best bring competitive advantage for us.

As contained in the country’s 2017 National Budget Statement theme, which reads; “Pushing Production Frontiers Across all Sectors of the Economy”, this year’s conference takes place at a time Government is already making concerted efforts to revitalise the economy.

Accordingly, Government has come up with a number of measures aimed at resuscitating industry, including the manufacturing sector, whose performance had been significantly affected by an influx of cheap imports.

The promulgation of Statutory Instrument 64 by Government offers companies an immense opportunity to retool and modernise, and be able to manufacture products that were previously imported.

I am happy to note that since the enactment of this Statutory Instrument, the country’s import bill has been coming down; with imports having declined from a high of US$6,3 billion in 2015 to US$5,2 billion in 2016; a realisation of some US$1,1 billion in import savings.

It is further encouraging to note that local manufacturing has responded positively to the measure as reported in the 2016 Confederation of Zimbabwe Industries Manufacturing Sector Survey Report, which indicated that the manufacturing sector’s capacity utilisation had risen from 34,3 percent in 2015 to 47,4 percent in 2016.

Government expects this trend to continue as efforts are being made to develop more business-supportive strategies.

Through such measures, therefore, the number of people employed in industry is expected to increase.

It, however, has to be noted that the temporary relief provided to manufacturers by SI 64 of 2016 should allow Zimbabwean companies to establish themselves, grow their domestic market share and gain economies of scale to be able to allow them to effectively compete with other players on the globe.

In that regard, Government is developing long term, more sustainable measures that are meant to recover the economy, including the development of a policy on local content.

In order to stimulate economic recovery, Government has also been actively working to promote business linkages in various sectors of the economy.

This has resulted in the development of partnerships such as the Arda-Trek Petroleum partnership, and that involving Anchor Yeast and Lesaffre (Pvt) Ltd to form Lesaffre Zimbabwe (Pvt) Ltd.

In March this year, the country witnessed yet another Government-initiated venture, which saw the formation of Beiqi Zimbabwe (Pvt) Ltd, a joint venture company between Willowvale Mazda Motor Industries; an automotive and spare parts dealer, Astol Motors, and Beijing Automobile International Corporation of China to assemble and market a wide range of light motor vehicles.

This linkage and development of a Motor Industry Development Policy will allow car assemblers and support-industries to recover.

Through such measures, therefore, more jobs are created.

In order to stimulate the economy, and earn the country the needed foreign currency, in November 2016, His Excellency, the President and Commander-in-Chief of the Zimbabwe Defence Forces, Cde RG Mugabe, signed the Special Economic Zones Bill into law, paving way for the creation of economic zones in the country.

In tandem with the above, Government has also passed the Judiciary Laws Amendment Bill and the State Procurement Bill, among others, to promote ease of doing business.

Since then, Government has been actively marketing the country, with significant investment enquiries received to date.

These SEZs are expected to attract joint venture projects between the multi-national/global corporations and local firms, including small and medium enterprises and farmer organisations.

Through cross-border linkages, these local value chains have a potential to develop into global value chains, benefiting the country.

Also, the SEZs will facilitate innovation and experimentation, leading to diffusion of knowledge and technology to the rest of country.

In order to improve competitiveness, Government is establishing a National Competitiveness Commission whose sole mandate will be to improve the country’s competitiveness and that of our goods and services.

The development of this Bill followed wide stakeholder consultations, including incorporation of input from the Nation Economic Consultative Forum.

The National Competitiveness Commission Bill has already passed through the National Assembly and will now be presented to Senate, after which it will be forwarded to the President for assenting into law.

This Commission, once established, will be responsible for, among other functions, developing, coordinating and ensuring implementation of key policy improvement processes, strategies, and initiatives that will enhance the country’s competitiveness. Our costs and prices will eventually come down, helping to resuscitate companies, while allowing new ones to set up.

This industrialisation strategy is in line with Government’s Zim-Asset blueprint objectives, and the African Union’s Agenda 2063, and the Sadc Industrialisation Strategy and Roadmap.

Following the positive outcome of the Presidential Inputs Support and Command Agriculture Schemes, coupled with the favourable rains, Zimbabwe is expecting a bumper harvest this year.

The country is thus assured of a readily available feedstock that will go into various agro-processing production lines that, all along, have largely relied on imports.

To minimise post-harvest grain losses, enough grain storage facilities have been made available by Government.

Also, in order for farmers to prepare for winter wheat farming in earnest and pay for goods and services and other necessities, Government will ensure farmers are paid on time for delivered grain.

Meanwhile, preparations for planting of the winter wheat crop are in full swing.

The success of the 2016/17 Specialised Maize Production Programme was largely hinged on the financier, input suppliers, and farmer-linkages.

Government is happy about this success and is grateful for the role that each of these parties played in the success of the programme.

For that reason, starting this year, Government is extending similar programmes to cover livestock, wheat, cotton, and soya beans production.

For sustained crop production and food security, Government intends to continue to exploit groundwater sources to achieve a minimum of 300 000 hectares of irrigation land as evidence from 31 sub-Saharan African countries is that average yields are 90 percent higher in irrigated than in rain-fed water farms (Africa Competitiveness Report, 2015).

An important lesson from the 2016/17 summer agricultural season is that we need to maximise on the distribution of inputs for the 2017/18 season so that by August 2017, all farmers participating in Command Agriculture, the Presidential Inputs Scheme and any other organised support programmes get their inputs in a timely manner.

Also, in order to increase agricultural productivity and maximise sector contribution, Government is mechanising farm operations, encouraging use of fertilisers, hybrid seeds, planting of high value crops for export such as flowers and fruits, and adopting ICT-aided farm management systems, among other initiatives.

Plans are in place to value-add and process agricultural commodities at source and to link small vegetable and fruit farmers and farming cooperatives to agro-processing plants.

Whilst we are happy about the good rains and the anticipated harvest this year, the resultant floods experienced during the 2016/17 agricultural season brought with them extensive damage to roads and other social infrastructure such as schools and hospitals, forcing communities in some affected areas to be displaced.

Resultantly, over US$200 million is required to rehabilitate flood-damaged infrastructure to bring it back into service.

From the aforesaid, Government, through the Office of the President and Cabinet, is undertaking the Road and Bridges Rehabilitation Programme, among other civil protection interventions in the flood-affected rural and urban areas of the country. Already, some US$45 million has been disbursed towards the rehabilitation of roads.

Furthermore, working through the Zimbabwe National Road Administration, Government is assisting local authorities to rehabilitate all trunk roads.

Such repairs to road infrastructure will thus facilitate the transportation of harvests from different farming areas of the country, to Grain Marketing Board depots and other agro-processing companies to support industry.

Equally important to the development of this economy, is the development of a policy and associated programmes to promote mining in the country.

Government recognises that small-scale mining of gold and chrome can significantly improve if this group of miners is supported.

As reiterated by His Excellency, the President and Commander-in-Chief of the Zimbabwe Defence Forces, Cde RG Mugabe, in his April 18, 2017 Independence speech, mining needs to play an important part in the development of the country.

In this respect, mining, particularly small-scale mining, has the potential to create substantial employment, supporting rural livelihoods, thus helping in the attainment of inclusive growth.

Government is, therefore, looking at ways that can increase the output of these minerals, including the assistance of miners with additional mining land, geological information and financial support to mechanise their operations.

Already, Government has made available some US$100 million for this purpose. Ways are being worked out to make this funding more accessible to miners.

In the same spirit, Government is calling on financial institutions, large-scale miners and mining equipment manufacturers to support this initiative.

Furthermore, Government is calling on the owners of closed mines and all those whose technologies are obsolete to use this platform to identify partners with capital to invest in those businesses.

The importance of services in the marketing of goods is well known as handling, delivery and selling goods involves some service.

Moreover, services such as banking and finance form an important part of our economies today.

In many cases, services are also used to augment or value-add most goods.

In Ethiopia, for example, 83 percent of the final price of roses that are exported to The Netherlands is attributable to services (Africa Competitiveness Report, 2015).

In order to facilitate movement of people and goods and to attract tourists into the country, Government is involved in infrastructural development, including roads, border posts, and airports.

Also, as business activity improves in the country, so will business visits, further promoting such services as transport, hotels, ICT and professional services, including tourism.

The expansion of Victoria Falls Airport has resulted in an increase in the number of planes that land in Victoria Falls and a resultant increase in tourist arrivals.

Furthermore, the sector is poised for growth, now that community-based tourism is being implemented.

It is for this reason that I call upon service-firms to play their part in the country’s development agenda by producing and exporting their products, which may include movies, music, ICTs or using services to differentiate offers.

Important to industrial productivity and economic development is the availability of uninterrupted power supply to business.

As such, Government is pursuing a number of short to long term power generation projects.

In the short term, Government is working on the resuscitation of existing small thermal power stations in Harare, Bulawayo and Munyati, as well as the licensing of independent power producers to complement existing capacity.

In the medium to long-term, Government is pursuing the 2 400MW Batoka Hydroelectricity Project to be shared equally between Zimbabwe and Zambia.

Processes leading to the implementation of the project are being finalised.

Furthermore, negotiations are at an advanced stage for the Hwange expansion project, which seeks to add 600MW of electricity into the national grid.

Through the Hwange Colliery Company and its mining contractor, Mota-Engil, Government will make sure that this increased coal demand at power stations is met.

As I close, I wish to reiterate that Government remains committed to the Ease of Doing Business reforms and to gaining global competitiveness.

Government calls on industry to retool, grow market share and to continue to innovate and value-add.

This can best be achieved by linking our value chains with those of our global counterparts.

We, therefore, need to take advantage of this conference to network for this purpose.

Government assures you of its commitment and support for dialogue on all issues intended at improving business performance.

I thank you. Tatenda. Ngiyabonga.


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