Zimbabwe's manufacturing industry is in crisis with firms under-performing due to erratic power supplies and lack of capital, an industry body said on Wednesday.
“The sector is in a crisis and to some extent this has resulted in company closures. The prevailing status quo cannot be maintained,” Lorraine Chikanya, chief economist of Confederation of Zimbabwe Industries (CZI) warned.
Zimbabwe's economy is slowly recovering following a nearly decade-long downturn which saw inflation peaking to 231 million percent.
A powersharing agreement between veteran President Robert Mugabe and his former arch-rival Prime Minister Morgan Tsvangirai has helped mend the economy and stem political violence.
But most companies are still operating below capacity hamstrung by unstable electricity supplies, lack of funds and high labour costs while others have pulled down the shutters or relocated to neighbouring countries.
Much anticipated foreign investment has not been forthcoming with potential investors seeking reassurance over a law which compels foreign companies to sell their majority stake to locals.
Industry and Trade Minister Welshman Ncube blamed the scarcity of cash and prohibitive interest charges on loans.
“The challenge is how to make money available at relatively low rates,” Ncube said. “There is no money all around. We think that most critical factor which is impacting the manufacturing sector is the unavailability of money.” - Sapa-AFP