FILE PHOTO: An worker works at a fridge manufacturing firm within the capital Harare, November 14, 2013. REUTERS/Philimon Bulawayo
HARARE (Reuters) – Zimbabwe’s manufacturing unit capability utilisation rose to a 10-year excessive of 56.25% in 2021, the nation’s major industrial physique mentioned on Wednesday, however cautioned that resurgent inflation and international foreign money shortages threatened a sustained restoration.
Owing to financial mismanagement, the manufacturing sector’s share of Zimbabwe’s gross home product (GDP) has declined from a peak of round 1 / 4 within the Nineties to lower than a fifth now.
A survey of 440 manufacturing corporations by the Confederation of Zimbabwe Industries (CZI) confirmed that capability utilisation – precise output measured in opposition to potential manufacturing capability – elevated to 56.25% in 2021, from 47% the earlier yr. This was the best stage since 2012.
About 38% of surveyed manufacturing firms had invested a mixed $147 million to develop manufacturing in 2021, CZI mentioned.
The business physique, nonetheless, warned that prime inflation and a foreign money disaster posed a severe menace to Zimbabwe’s economic system.
Zimbabwe is experiencing excessive inflation once more after a marked slowdown in 2021. 12 months-on-year inflation hit 96.4% in April, up from 60.6% at the start of the yr, as its foreign money continues to weaken quickly in opposition to the U.S. greenback.
President Emmerson Mnangagwa on Saturday ordered banks to droop lending with speedy impact in a transfer the authorities says is supposed to cease hypothesis in opposition to the Zimbabwean greenback, as a part of a raft of measures to arrest its fast devaluation on the black market.
“The foreign money problem and the related inflationary stress can derail the momentum into 2022,” CZI chief economist Cornelius Dube mentioned whereas presenting the survey outcomes.