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Harare’s dying industries

At Trinity Engineering in the Willowvale industrial area, tall grass can be seen adjacent to an abandoned tanker which lies in the yard. An administration block has paint peeling off from the walls, a sign of neglect.

BY OUR STAFF

The place looks deserted, with the only noise coming from a grinder as four employees worked on a task.
The company is owned by Guy Georgias, the Zanu PF central committee member who unsuccessfully tried to get damages over the imposition of sanctions on Zimbabwe by the European Union.

At Gleneagles industrial park, there is a sign that indicates the property owners are looking for new tenants. Across the road, the signage on one of the country’s biggest car assembler, Willowvale Mazda Motor Industries (WMMI) is deteriorating in tandem with what is happening at the company.

The story is the same at its sister company, Deven Engineering. The company has a “for sale” tag but takers are hard to come by.
Prospective job seekers that used to frequent the area are nowhere in sight. They could probably have resorted to vending.

Harare’s industrial hub is stuttering, a mirror of the state of Zimbabwe’s industries in a decaying economy. The story line is the same in the Southerton area where only Delta and BAT among a few others have managed to weather the economic storm.

An industrialist warned on Friday the haemorrhage would continue as there was no solution in sight.
“The wheels are off,” the industrialist said, adding, “in any other country, leaders would have sat on the table with players to proffer solutions but in Zimbabwe their [leaders] priorities are elsewhere.”

A recent report by the Confederation of Zimbabwe Industries (CZI) said company closures and retrenchments were the order of the day. It said the sectors mostly affected were the motor industry, timber, cement, engineering, agriculture, security, mining and furniture.

It said competition from cheap imports in the textile industry continued to adversely affect the sector due to undeclared textile products at the border posts.

“The battery manufacturers reported a massive influx of fake batteries under well- known international brands. The packaging side of the industry is also being adversely affected by imports of finished commodities which enter fully packaged. This means there is no business for the packaging industry,” CZI said.

Analysts say the closures and sometimes downsizing in the manufacturing sector will have an impact on government’s revenue. Government is currently constrained in meeting its obligation due to declining inflows.
In its first quarter report, Zimbabwe Revenue Authority (Zimra) commissioner-general Gershem Pasi said revenue collected from companies had declined by 32% in the period from $104,7 million that was collected in the comparable period in 2014.

“The performance of the revenue head can be attributed to the harsh economic environment which has negatively impacted on companies’ profitability,” Pasi said.

Industrialists say local firms are hamstrung by working capital constraints, antiquated equipment and power outages. These constraints have resulted in over 6 000 employees getting retrenched in the period January 2013 to December last year.

Companies are struggling to secure funding. When they do secure the funds, they struggle to repay them due to punitive interest rates.

Companies such as Industrial Development Corporation have been scouting for investors since the country dollarised in 2009 but have failed to make a break- through. IDC is the parent company for WMMI and Deven.
Foreign direct investment inflows have been low at $545 million last year compared to neighbours such as Zambia and South Africa due to Zimbabwe’s policies such as the indigenisation legislation that have created uncertainty among potential suitors.

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