Zim reports drop in manufacturing capacity utilisation

(iStock)
(iStock)

Harare - Zimbabwean manufacturing companies are now operating at a lower capacity utilisation than they were last year, the latest Confederation of Zimbabwe Industry manufacturing sector survey has shown.

According to the survey released on Wednesday morning, the weighted capacity utilisation for Zimbabwean manufacturers has gone down by 2.3 percentage points to 45.1% from 47.4% in the prior comparative year.

The survey results, which were presented by CZI chief economist Dephine Mazambani, also showed that most companies are struggling in accessing foreign currency (forex).

On how the country can improve the forex situation, most of the respondents said they would like policies and measures that support exports.

A total of 40% said they believe the forex situation can be improved by supporting exporters. This response is in line with measures that have already been implemented by government through the Reserve Bank of Zimbabwe. According to these, exporters are receiving monetary incentives as well as first priority in terms of accessing foreign currency to pay for raw materials and machinery.

The Bankers Association of Zimbabwe (BAZ) recently said banks are currently prioritising exporters for cash withdrawals and foreign currency allocation over individual account holders, due to the prevailing cash shortages.

BAZ president Dr Charity Jinya was quoted in the media as saying that the likelihood of people who are not exporters getting cash from banks are slim, in the current situation.

"That is why we are encouraging the use of plastic money when we receive cash; we have to think if we should give it to individuals or companies that will generate more cash and foreign currency."

Nineteen percent of survey respondents felt that if the productive sector is given forex, the situation would improve.

However, 16% of respondents said the forex situation can be improved by reviewing policies to attract foreign direct investment. Newly-appointed Finance Minister Ignatius Chombo has already pointed out the need to put in measures that boost FDIs.

The minister said low FDI levels recorded in the past few years make it difficult to achieve targeted economic growth rates.

"The low foreign direct investment levels cannot sustain the envisaged average growth rates of 7%, enunciated in the Zim-Asset, hence the need to put in place attractive policies for investors," the minister said.

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