Home » Governance » Govt to Address Industry Competitiveness Issues

THE Ministry of Industry and Commerce will assume the role of the planned national competitiveness commission while Government works on constituting a fully fledged commission.

Industry and Commerce Minister Mike Bimha said the Government would transform the National Incomes and Pricing Commission to specialise on competitiveness issues.

Government is moving swiftly to address the high cost of doing business, which has eroded firms’ competitiveness and resulted in local products being crowded out by imports.

The initiative follows studies carried out by the Government and private sector, which revealed that the cost of doing business in Zimbabwe was higher than in other countries.

However, Minister Bimha said due to procedural and legislative requirements to transform the NIPC into a National Competitiveness Commission, such a process may take long.

“Since it will take time to re-brand the National Incomes and Pricing Commission, for now the role will be done by the Ministry of Industry and Commerce,” Minister Bimha said.

He said the competitiveness commission will not look at the issues of pricing and controls, but would focus on finding measures to make the domestic industry competitive.

“The National Competitiveness Commission will not look at prices and price controls, but it will look at the cost of doing business with a view to make recommendations,” he said.

Industry and Commerce secretary Mrs Abigail Shoniwa recently said that the National Competitiveness Commission would be up and running in the first half of the year.

She said while the National Competitive Commission was being set up, Cabinet decided to put in place a standing committee to attend to these matters with immediate effect

The new re-branded commission will report to the Ministry of Industry and Commerce, which would in turn take recommendations to a Cabinet committee on competitiveness, which was established recently and is now a permanent standing committee.

According to Confederation of Zimbabwe Industries manufacturing sector survey report, industrial capacity fell from an average 36,5 percent in 2013 to 33 percent last year.

Declining capacity also means the unit cost of production becomes higher, with costs spread over low volumes with hence the producers’ competitiveness is negatively affected.

While production capacity is low, the little industry is able to produce cannot be sold as it is deemed more expensive compared to imports, which are grossly under priced.

The ministry last year carried out, at the directive of Cabinet, a study on why business costs were higher in Zimbabwe compared to the region and the rest of the world.

Findings were that prices in Zimbabwe were generally more expensive than in other countries due to shortage and cost of power, certain laws, cost of finance and overvalued currency.

As such, the competitiveness commission will come up with recommendations to bring down the cost of doing business, also looking at factors constraining ease of doing business.

Cabinet has since approved the recommendations the ministry came up with to address issues of competitiveness, cost and ease of doing business and impact of cheap imports.

Source : The Herald