Bulawayo suffers de-industrialisation

THE City of Bulawayo continues to suffer massive deindustrialisation, as companies continue to either relocate to other cities or close down due to a host of problems among them the acute shortage of water and the liquidity crunch.

This came to light at an interactive business meeting organised by the Confederation of Zimbabwe Industries (CZI), in the city last Friday.

The meeting was graced by Prime Minister Morgan Tsvangirai, Minister of Industry and Commerce, Professor Welshman Ncube, Minister of Water Resources and Development, Mr Sipepa Nkomo, Minister of Economic Planning and Investment Promotion, Mr Tapiwa Mashakada, Deputy Minister of Labour and Social Service, Dr Tracy Mutinhiri, Bulawayo City Council mayor councillor Thaba Moyo, Victoria Falls mayor Nkosilathi Jiyane among other dignitaries and various stakeholders.
In her opening remarks Matabeleland Chamber of Industries president, Dr Ruth Labode, lashed out at ministers from the Matabeleland region for their failure to implement development in their area citing the National Matabeleland Zambezi Water Project and further lamented the deindustrialisation of financial institutions as well as other service providers.

"These are some of the problems we are facing though it might sound like perceptions for some of you but for us who live here we feel and it is further compounded by some of our ministers in Matabeleland.
"I think our ministers should stop being apologetic . . . there are a lot of ministers in Matabeleland and some of them we don't even know them and we will never remember them . . . Ministers of Matabeleland can you please stand up and be visible,'' Dr Labode said.

Minister Ncube said according to a survey carried out after the formation of the inclusive government close to 100 companies from various sectors had been closed. 

He said a total of 19 clothing and textile companies have been closed, 63 in the motor and allied industry as well as three construction companies.

"Many more (companies) are operating at severely reduced capacity utilisation for instance the food and beverages industry is operating at 40 percent and the few remain at 10 percent capacity utilisation.
"The metals and electrical sector's capacity utilisation is at an average of 20 percent, wood and wood products at 10 percent. Clearly the picture is somewhat gloomy in Bulawayo,'' Minister Ncube said.
He, however, said the challenges are not peculiar to Bulawayo but exist throughout the country due to the fact that the epicentre of the country's finance is centred in the capital city, Harare, and the liquidity crisis being faced by the nation.

"The challenge remains how to bring back liquidity into the financial sector so that it can adequately fund businesses . . . Government on it's part has been working tirelessly to recapitalise the financial sector through our consultations with regional and international organisation like the Common Market for Eastern and Southern Africa, PTA bank,'' Minister Ncube said.

He, however, said the failure by Government to attract direct foreign investment was likely to add more woes to its efforts of reviving the country's industry. 

"The Government should be commended for the work that it has done to mobilise funds from the Africa Development Bank, PTA bank in order to improve the situation. 

"It is improving but not very fast in some instances it will be to late by the time we would have mobilised adequate resources . . .,'' Minister Ncube said.

He said constant political instability pertaining to some aspects of the Global Political Agreement had affected the Government from "grabbing some of the low hanging fruits.

"For instance there is an issue that the business sector has been urging us to decide on which is do we or don't we have to join the Rand Monetary Union whose effects will obviously increase money supply into the country by way of liquidity, empowering the financial sector but we dilly-dallied about it and we still don't have the position paper to debate nearly three years later. 

"Equally as Government we could have been more strategic on how we viewed the Special Drawing Rights (SDR) funds that we had, for me I urge and continue to urge . . . lets us take part of that SDR fund and put it in a revolving fund for businesses whether it is six month or 12 months it will come back . . .,'' Minister Ncube said.

The ministry is in the process of compiling an Industrial Policy document for 2011-15 to replace the one which expires at the end of this year as in a bid to revive industries.

Presenting a paper Dr Ela Mtetwa, an academic from the National University of Science and Technology, said the demise of Bulawayo industry had political inclinations dating back to five decades ago.

He said the city used to be referred to as the workshop of Central Africa and was the hub of industrialisation anchored on manufacturing, textile and engineering.

"The roots of this decline actually began with the Unilateral Declaration of Independence. When it was announced the British Government responded to the resurgent rebellion by imposing sanctions backed by the United Nations thereby companies headquartered in Bulawayo moved their operations to Harare in order to work closely with the strategists of the Rhodesian Government that where in charge of sanction busting that was so far the situation before 1980,'' Dr Mtetwa said.

He said the political disturbances after independence also led to some companies relocating and a mass exodus of people not only in Bulawayo but also in Matabeleland and Midlands regions.

"Further to this situation we have got the acceleration factor of water shortages in Bulawayo and industries that find themselves with water shortages some of them quickly closed shop and relocated others have drastically downsided and the shortage of water is a major factor of under capacity utilisation in Bulawayo by industry,'' Dr Mtetwa said.