How Zimbabwe can revive industry and end its cash crisis

Binga South Member of Parliament Gabbuza Joel Gabbuza says the best way to revive Zimbabwe’s industry is to target the manufacturing of a few kitchen commodities because those are the major things that the country is importing.

Government should then introduce an import tax of even 5 percent, like the current export incentive, because with $6 billion worth of imports every year the government can raise $300 000 which can be used to revive industry.

Gabbuza said the current export incentive would not revive industry at all because it was targeted at a few companies and commodities.

“Firstly, we are giving incentives of 5% to the chrome industry and the gold sector, which are the only things that are there in terms of exports.  If you look at a gold or chrome plant, even if you give them a 5% incentive, if the capacity of the processing plant is to produce 10 tonnes, no matter how much incentives you offer, that plant will not produce any excess, so that 5% will not result in extra production at all.  The plant is built to process a certain amount of commodity or mineral output per month or per day,” he said.

“Mr. Speaker Sir, we are also incentivising things like tobacco, which is seasonal.  After we have reaped all our tobacco, what else will bring in foreign currency?  It is a seasonal crop and once it is reaped and sold, it is done.  Therefore, we will only earn foreign currency from tobacco over a certain period.”

Gabbuza reiterated that half of Zimbabwe’s problems could be solved by resuscitating ZISCO.

“This is because if ZISCO Steel starts operating, automatically Hwange Colliery will start moving and the National Railways of Zimbabwe will also start operating.  What will ZISCO Steel do?  If it starts operating, the fertilizer price of ammonium nitrate will definitely go down because ZISCO Steel subsidises Sable Chemicals through buying oxygen. 

“The mining industry will start operating, the cost of operations will be reduced because most of the dynamites used in the industries now are being imported from such countries as China, South Africa and others, which is moving foreign currency outside the country.  However, if ZISCO Steel was operational, explosives automatically follow because they are a by-product of the hydrogen produced at Sable Chemicals where Sable supports ZISCO Steel.  That will be helpful to us.”

Continued next page

(511 VIEWS)