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Zimbabwean brands need to step up to the plate

by Staff reporter
09 May 2021 at 08:00hrs | Views
Production seems to be the driving spirit of the new dispensation, as the country pursues a modernisation and industrialisation agenda whose objective is to grow the economy, create rewarding and sustainable jobs, lift people out of poverty and create a prosperous society.

But this has always been a long-stated goal by Government, and it, therefore, begs several questions: How is it going to be different this time around?

What has changed? And will the outcome of this ambitious project likely to be any different than the failures of the past.

Well, a lot has actually changed under the administration of President Mnangagwa.

In 2019, the Government took the bold step of reintroducing the Zimbabwe dollar after a decade of using a basket of foreign currencies, a step that at the time seemed unfashionable because it triggered the trauma that was associated with the hyperinflationary era.

Notwithstanding hysteria from pessimists who predicted the collapse of the reintroduced currency, authorities were unmoved and laser-focussed as they maintained, and justifiably so, that the country could not develop without its own currency.

The underlying objective, therefore, was to make local industry competitive enough to supply the local market and export.

It has to be remembered that during the time when Zimbabwe was using the multi-currency system (from 2009 to 2019), local companies could not effectively compete with their regional peers since the cost of production — by virtue of using US-denominated labour, utilities and raw materials, among other associated costs — made local products prohibitively expensive.

It actually became cheaper to import than locally manufacture goods and services.

We essentially became a regional supermarket of sorts, where foreign goods that were chasing the US dollar found a ready market. All this meant local industry progressively declined, while the economy haemorrhaged billions through importing anything and everything.

While the multi-currency system brought stability, it resulted in significant de-industrialisation.

But the new political administration did not only reintroduce the local unit, it also took aggressive steps to defend its value through establishing the weekly foreign currency auction system, which has stabilised the exchange rate, tamed inflation and improved access to foreign currency.

Delinquent behaviour that destabilised the Zimdollar on mobile money platforms has been eliminated.

Renewed focus on increasing agriculture production, among many of the country's key economic sectors, seems to be gaining momentum.

And industry has positively responded.

The Confederation of Zimbabwe Industries (CZI) believes capacity utilisation in the manufacturing sector might grow to 61 percent this year after rising to 47 percent in 2020.

Buoyed by an improving operating environment and an enabling currency, companies are beginning to venture into the region and beyond.

Not surprisingly, four local companies — National Foods, Delta, Lake Harvest and Kefalos — recently made it into the Top 100 Food Companies in Africa 2020, a list that is compiled by the Food Business Africa Magazine. The Food Business Africa Top 100TM is a biennial listing of some of Africa's leading food, beverage and milling companies — the first such listing by any publication.

As we show elsewhere is this paper, as the public and private sector are expanding, more jobs are also being created.

All this is instructive.

But more can be done to increase production, promote industrial efficiencies and innovation, including promoting local consumption.

Already, we have the Local Content Policy that provides a framework to do exactly that.

Innovation hubs that have been established at State universities can also give a helping hand through designing bespoke solutions for industry.

So investing in research and development to improve product quality, packaging and pricing becomes an urgent need for local brands. It also has to be remembered that local brands are the building blocks of the national brand.

Therefore, making progress in this regard will put both local industry and the country in good stead to compete when the African Continental Free Trade Area (AfCFTA) becomes fully operational.

President Mnangagwa could not have emphasised this crucial point more eloquently than he did during the Buy Zimbabwe Awards in Harare on Friday.

"These developments (Government's interventions) are expected to consistently facilitate rapid private sector-led economic growth. This is more so as we seek to achieve national self-sufficiency and to penetrate global markets, including the African Continental Free Trade Area, while maximising on the opportunities offered by SADC and COMESA . . .

"The prevailing stable and predictable macro-economic environment that we have created must be the impetus to increase production, productivity and, of course, profitability across the industrial value chains," he said.

Local industry, therefore, needs to be as bold and as aggressive as Government in investing in growing their own brands.

They need to step up to the plate and take the lead in realising the mutually shared goal of creating a prosperous Zimbabwe.

With determination and focus, together we can make Zimbabwe great again.

Source - sundaymail

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