Capacity utilization in Zimbabwe’s manufacturing industry declined by 2.3 percent to 45.1 percent in 2017 as companies struggle to survive, an industry body said Wednesday.
According to the Confederation of Zimbabwe Industries (CZI), the decline in capacity utilization was due to high cost of procuring raw materials, depressed local demand, foreign currency shortages and high production costs emanating from aged equipment, state-run news agency New Ziana reported.
The decline also led to a 15 percent loss in jobs, the CZI said.
Sub-sectors that recorded significant declines were non-metallic mineral products such as cement, woods and furniture, transport and equipment production and petroleum products, said the CZI.
The industrial body noted that the majority of industrial firms were using obsolete equipment while the few companies with new machinery were operating at higher capacity.
Industry and Commerce Minister Mike Bimha urged companies to improve their competitiveness through seeking local solutions to their challenges.
Reserve Bank of Zimbabwe Governor John Mangudya encouraged the sector to do better, saying it was consuming more foreign currency than most sectors of the economy but was exporting less than 10 percent of its products.
Zimbabwe is battling foreign currency shortages that have impacted negatively on the economy.
Mangudya criticized the manufacturing sector for basing its prices on black market foreign exchange rates when they are getting allocations from the central bank at official rates. Enditem