Home » Governance » Industry Not Feeling Mugabe’s Claimed Recovery

A LEADING industrialist, Frank Kufa, has issued a chilling warning on the state of Zimbabwe’s economy saying the country was headed for bumpy times.

Kufa, who is the president of the Confederation of Zimbabwe Industries (CZI) Manicaland Chapter, made the remarks a few days after President Robert Mugabe said the economy was now on a path of sustained recovery.

The CZI official said Zimbabwe’s exports had shrunk by 30 percent while Value Added Tax (VAT) collections had also gone down by 16 percent in the first five months of the year compared to last year.

He said government revenue in the first five months of the year was lower by eight percent compared to same period last year.

“With this worsening situation, fuel imports have increased and this points to a more informalised economy which is consuming more than it is producing,” Kufa said.

He made the remarks while addressing the media on the state of preparedness for the 2014 CZI Annual Congress to be held in Mutare from July 30 to August 1.

The CZI is the voice of industry in Zimbabwe. Its views have often been at sharp variance with those of the government.

Kufa said a preliminary survey carried out by CZI to determine the performance of the manufacturing sector in the first half of the year compared to last year had confirmed a decline.

“Capacity utilisation has declined by about two percent compared to the same period in 2013,” he said.

He cited capital shortage, low confidence levels, labour bottlenecks, high utility charges, high cost of borrowing, poor infrastructure, liquidity crisis, illegal settlers, land tenure and old equipment as challenges that are hamstringing the economy.

Kufa said to stop the economic haemorrhage, the government should bring back investor confidence by not continuously shifting goal posts as well as reviewing the model of implementation of its indigenisation and economic empowerment programme.

“Let us bring back investor confidence by not continuously shifting goal posts,” said Kufa, adding that the private sector is owed a lot of money by the government.

He said there must be an efficient mechanism to allow companies to operate. Kufa also said there must be an end to land resettlement.

“Government must remove all illegal settlers, both on agriculture and plantation land,” said Kufa.

He also aised the government to zero rate VAT for all imported raw material so as to reduce production costs thus making products competitive both locally and on the export market.

Source : New Zimbabwe