The Future of Zimbabwe’s Industries
Zimbabwe’s industries have faced significant challenges over the last 20 years, with the ultimate result being that production in Zimbabwe has suffered immensely; with high levels of cheaper imports from neighbouring countries, resulting in a shrinking of Zimbabwe’s fiscus and a liquidity crisis, being the main by-products of these challenges. Ultimately, the de-industrialization of the Zimbabwean economy has led to many companies that produce secondary goods either significantly downsizing or closing altogether.
As things stand, there is a need to address various issues which directly impact our industries and the manufacturing sector, which issues need to be addressed in order to stimulate growth in Zimbabwe. However, the two issues that I will focus on relate to the need to invest in infrastructure, and technology, and the ways in which I believe addressing these issues can be the first step in reviving Zimbabwe’s industries.
Zimbabwe’s industrial infrastructure is outdated, as it has not been consistently retooled or redesigned to accommodate an increased population and greater demand. Despite numerous false dawns, our rail and road networks are in dire need of development and investment, particularly as this can improve access to major ports in Africa in order to facilitate the movement of heavy goods.
As a Corporate Law Firm in Zimbabwe, we are constantly approached by various investors who have an interest in revamping Zimbabwe’s industrial infrastructure, and through this dialogue we have increasingly began to understand that these investments need to have a long-term outlook which, although they address current needs, also take into account the needs of Zimbabwean industry several decades from now. Related to this is also addressing the energy and water supply infrastructure in Zimbabwe, as these issues have, and will continue to, hampered industry for many years.
From a technological perspective, it is clear that many Zimbabwean industries are lagging behind our regional and international counterparts with respect to technological advancements. As such, there is a need to retool many factories and introduce technological advancements geared towards enhancing production processes and lowering production costs. Whilst this may seem like a big ask, Manokore Attorneys has had the privilege of advising on transactions where investors have recognised this need and tailored their investments accordingly; and the results have been extremely encouraging both for the business in question, and for Zimbabwe as a whole, as these transactions were concluded within Zimbabwe’s regulatory and compliance framework, and with the national interest being one of the key drivers of the transaction.
However, such an investment is capital intensive and requires a large amount of investment and commitment; therefore, we need to ensure that the investment conditions and fiscal framework is in place to ensure that such an investment makes commercial sense for investors and Government. In this way, ZIMRA also plays a crucial role in facilitating trade and industrial growth. In this way, Manokore Attorneys encourages dialogue and engagement between our clients and ZIMRA, because by meaningfully engaging ZIMRA in these processes (and ZIMRA correspondingly recognising that in collecting revenue it should not seek to cripple businesses) then ZIMRA can help to stimulate economic growth and sustainable source of revenue for Zimbabwe for many years to come.