IT has been a sombre week on the economic front. State propaganda machinery continued to gloss over deeper pain from terrifying currency shortages, which have tormented a people promised heaven on earth during the shift from bond notes to the new currency, ZiG, in April.
But empirical evidence from mines and manufacturing industries revealed shocks remain endemic and stability remains a pipedream.
On Friday, the Confederation of Zimbabwe Industries (CZI) indicated industries were in tailspin last year, with utilisation of installed capacity falling by about three percentage points.
President Emmerson Mnangagwa’s government must remember that this is the third straight year that industries have surrendered efficiencies, and red lights are flickering.
Quite telling was the fact that 47% of installed capacity was idle in 2023, and with only 53% running. The bad news is, this 53% is a significant tumble from 56,1% in 2022, and 56,3% in 2021.
Zimbabwe’s industries have punched below the weight since utilisation of installed capacity barrelled to 57% in 2011 — another sign that a series of blueprints have failed to rebuild the industry, and a shift in approach is overdue.
In the past year, the industries demonstrated they were falling apart by retrenching 8% of workers, according to the CZI.
Only 11% new jobs were added. These are by any measure sombre statistics for a country that is bleeding on all fronts.
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This is why 30% of 270 executives surveyed by CZI said the economy was in its worst state in 2023 than 2022.
This week, the mining industry added more sombre data, saying it is battling to fend off heavy blows stemming out of upheavals on the global commodity markets, which are already being felt by lithium and nickel operators.
In response, miners instituted dreaded job cuts, according to the Chamber of Mines of Zimbabwe.
President Emmerson Mnangagwa’s government knows what this means on the quality of Zimbabweans’ lives.
Authorities will say they have no control over global market dynamics. But I will argue that they have not moved an inch to calls for reviews on taxes, royalties and power tariffs. Electricity costs were hiked last year amid an outcry.
Such reviews would be vital in helping companies make their way out of these dilemmas.
There has been so much hype about measures and financial interventions made to help companies drift out of this protracted quagmire. But there was little effect in terms of output last year.
In the midst of this mayhem, regulators did not make the situation any easy for business, with the small to medium-scale enterprises that Zimbabwe is trying to build taking the sharpest knocks from overheads related to regulation. We are already seeing the signs of another dreadful era ahead.
