Odds stacked against manufacturing sector’s growth
FAITH MADZINGA
The projected 5.5% growth of the manufacturing sector will not be achieved due to underfunding and foreign currency shortages, experts have said.
In his 2022 National Budget, Finance minister Mthuli Ncube forecast the sector to expand by 5.5% this year driven by increased agriculture spending, infrastructure spending and mining activity.
He allocated ZWL$3.9bn for the sector, which is not enough to foster the 5.5% growth rate, according to research firm Fincent Securities.
The Confederation of Zimbabwe Industry (CZI) president, Kurai Matsheza, said the sector was facing a number of constraints.
“[The sector is battling] a number of issues beyond just the monies,” Matsheza said .
He added: “(Also) fear that drought expected this year will pull us back.”
The daunting nature of the target has become clear as the sector is battling power shortages, foreign currency shortages, insufficient government support and high inflation, among other challenges.
Matsheza also said the war between Russia and Ukraine may have a severe impact in terms of inflation and global logistics.
“The flow of goods from Ukraine and Russia to Zimbabwe is being disturbed by the war. Russia and Ukraine are the leading countries that export most wheat to Zimbabwe. Since there will be slim or no exports from both Ukraine and Russia, the manufacturing sector will be disturbed,” he said.
Matsheza said high inflation will likely continue to erode purchasing power.
