Some firms better off dead: Bimha

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Industry minister Mike Bimha said some companies that closed down at the height of the country’s economic meltdown might not be resuscitated.

You can’t resuscitate a company that is dead,” Bimha told chartered secretaries at their annual conference in Nyanga over the weekend.

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“Some of them need to remain dead, because they are no longer appropriate. So we have to be selective and see which ones we resuscitate and which ones we say rest in peace.

“That is an area which is not just for government but everyone needs to decide which of those industries we want to see and which ones we should do nothing about,” he said.

This comes as Zimbabwe has suffered large-scale de-industrialisation since the early 2000s, condemning the bulk of the population to a grinding subsistence life as communal and resettlement farmers.

Economic experts say the manufacturing sector — hard hit by economic decline — has failed to fully recover from the economic downturn of the last decade, characterised by hyperinflation, which forced the government to ditch the local currency in favour of the multiple foreign currencies in 2009.

In the past decade, many companies closed leading to job loses as they struggled to finance operations while battling competition from cheap imported goods.

According to the Confederation of Zimbabwe Industries 2015 manufacturing sector survey, industry capacity utilisation dropped by 2,2 percent to 34,3 percent in 2015 from 36,5 percent in 2014.

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In the survey, in which around 250 companies participated, the CZI said issues affecting the local manufacturing industry remained unchanged since 2009 when the country adopted the multi-currency regime.

Major challenges besetting industry include low domestic demand, capital constraints, antiquated equipment and machine breakdowns as well as competition from imports.

Compounding the problems were infrastructure-related challenges which include power cuts, poor road infrastructure, inefficient rail network and water shortages.

Infrastructure has deteriorated as a result of years of neglect due to economic challenges fuelled by President Robert Mugabe’s ill-advised and populist policies that have seen the government investing less in rehabilitation as well as new infrastructure.

Analysts blame the farm seizures that triggered a flight of foreign investors and capital from Zimbabwe for plunging the country into food shortages and for quickening the demise of an economy that was one of the most vibrant in Africa when Mugabe took over at independence from Britain in 1980.

Critics of Mugabe’s land reforms insist that the about 60 percent drop in food production that followed land redistribution was chiefly because the 92-year-old president failed to back up newly-resettled black farmers with inputs support and skills training to maintain production on the former white farms.

Bimha, however, said despite the current economic challenges, Zimbabwe needs to come up with new reforms aimed at restoring the country’s competitiveness.

“We have seen a deindustrialisation trend over time from the time of the Economic Structural Adjustment Programme and you and I need to walk on a path of reindustrialisation. Reindustrialisation will also mean resuscitation of industries and the inviting of new players to come and form new companies,” he added

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