Home > Business, Development, General, Zimbabwe > Government to launch Industrial Development Policy

Government to launch Industrial Development Policy

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Industry (Photo credit: paparutzi)

 

The government is launching an Industrial Development Policy this coming week that is designed t lift industrial output from 40% to 100% by 2015. It is anticipated that the manufacturing sector will contribute 30% of the gdp by 2015. At the centre of this policy is the establishment of an Industrial Development Bank (IDB) within six months of the launch of the policy.

“The IDP will transcend the confines of pure long-term lending to industry and encompass, among others, balanced industrial growth through development of backward areas, modernization of specific industries, employment generation and entrepreneurship development along with support services for creating a deep and vibrant domestic capital market, including the development of opposite institutional framework.”

Focus is on manufacture of pharmaceuticals which requires a $110 million investment. Fertilizer production through the use of the latest technologies such as coal gasification. A resuscitation of Zisco Steel is anticipated and it is projected to generate revenues between $1 and $2 billion.

Serious attempts to resuscitate Zimbabwean industry are required to enable Zimbabwe to compete regionally. With competition coming from all corners of Africa and the world, it is crucial to develop a policy framework that is effective. Countries such as Angola are taking great strides to advance their economies. Zimbabwe has missed out on a decade or growth and serious attention needs to be paid to the development of industry. Successful implementation of the policy is imperative to meet the goal of hundred percent utilization by 2015 and to compete globally.

Focusing on manufacturing is a noble idea and channeling funds into manufacturing is critical if business is to achieve higher utilization levels. Zimbabwe currently imports more than 65% of goods. Zimbabwean industry is not competitive and it still cheaper to buy foreign goods than to buy goods made in Zimbabwe. As much as consumers want to Buy Zimbabwe, at the end of the day, it is about good quality products at reasonable prices.

It will be interesting to see what the proposal actually recommends, the taste of the pudding is in the eating.  The reality is that foreign goods are going to be a threat for local industry because they are more competitively priced. Government and various private organisations need to pull out all the stops so that local business can have a fighting chance. To do this industry needs cash injections, funding, incentives, government grants, tax breaks and any break possible to be able to achieve capacity. Will we see this in the IDP, we can only but hope.

 

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