By Alois Vinga
THE Confederation of Zimbabwe Industries (CZI) says local industry capacity utilisation has dropped by 6.2 percent with signs it could further slip if protective measures were not put in place to reverse the downward spiral.
This was revealed in a recent survey conducted by the business oriented organisation.
The survey, entitled, “The 2018 CZI Manufacturing Sector Survey” says that from August 2018, capacity utilisation in November 2018 declined by 6.2 percentage points to 42 percent.
“The decline in capacity utilisation was mainly a result of policy Inconsistency – suspension of SI 122, shortage of foreign currency, waning confidence in the economy due to lack of a clear policy direction on currency issues,” says the study.
CZI also projected capacity utilisation in 2019 to further decline to 34.3 percent, representing a 7.7 percentage point decline from the November 2018 figures, if Zimbabwean policy did not change for the better.
“At 34.3 percent capacity utilisation, some companies would have closed with attendant effects of unemployment,” the survey further observes.
According to the report, the challenges confronting Zimbabwean businesses were ever shifting.
CZI cited challenges experienced between 2013 and 2016 as caused by low demand occasioned by stiff competition from imports.
This, according to the business representative group, was dealt with by government interventions to enact Statutory Instrument 122 which barred the importation of locally available products.
CZI early this month revealed that a number of companies failed to reopen for business this year while the few remaining ones were running out of raw materials due to acute shortages of United States Dollars.