Towards a new economy

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VARIOUS stakeholders have over the years crafted blueprints and come up with strategies to revive the economy battered by more than a decade of illegal Western imposed sanctions but the country’s industry, across the board, is yet to turn the corner.
Efforts to have machinery roaring especially in the manufacturing sector have not yielded desired results.
The new dispensation is determined to get the economy working in the short-term – it is a priority.
But what exactly is required and needed to get the economy ticking.
The new administration is half-way through its first 100 days in office.
All eyes will be on Cabinet Ministers’ scorecards, checking on productivity and delivery.
Top on President Emmerson Mnangagwa’s agenda is revival of the economy to improve livelihoods of citizens
The country’s industry, once the pride of Africa, a major supplier of semi-finished, and finished products has struggled since the turn of the millennia.
The China, Japan and Russia mega deals and suitors like African billionaire Aliko Dangote who have expressed interest in working with the country, have raised hopes of a shot in the arm for the slumbering economy.
However, a lot needs to be done, locally, to get the economy fully functional.
The massive ZISCO Steel industrial complex in the small town of Redcliff lies ‘dead’, seemingly forgotten.
The company which should be the spine of the economy lies comatose, dampening prospects of many downstream industries.
ZISCO Steel, touted Africa’s second biggest steel producer after South Africa at its peak in the 1990s, is a necessity to the country’s economy.
Employing more than 4 500 workers at its peak, the steel company was critical to the survival of many companies that have since closed shop.
The number four blast furnace, which used to operate 24 hours producing thousands of tonnes of steel per day, has become a breeding ground for rats.
The continued closure of ZISCO Steel, beyond doubt, has contributed to the delay in getting the economy back to the highs of the 1990s.
At its peak, ZISCO Steel was the mainstay of the steel industry and other downstream industries.
It was the backbone of Zimbabwe’s economy.
Since its closure, companies, mainly those involved in the production of steel products, have been affected, forcing them to downsize and others to completely close shop due to lack of cheaper raw-materials.
One remembers the euphoria once experienced when Essar Africa Holdings announced it would take over the moribund parastatal in 2011 in a deal worth US$750 million.
The initial phase of the project involved the revival of ZISCO Steel to a production capacity of 500 000 tonnes of steel a year within 24 months which would increase to 1,2 million tonnes a year in the second phase.
But the steel giant maker continues to wallow in limbo.
This is the same story with industries in Bulawayo, once the country’s industrial hub.
For ZISCO Steel’s chimneys to start belching smoke again, there is need to capacitate other companies that contribute to ZISCO, like coal production in Hwange and transporter National Railways of Zimbabwe which is also struggling.
Presenting the national budget statement for 2018, Minister of Finance and Economic Development, Patrick Chinamasa said State Enterprises that exhibit potential will be reformed, while those which cannot be rehabilitated will be privatised or face outright closure.
So far, Government has published a priority list of companies including Air Zimbabwe, National Railways of Zimbabwe (NRZ), Cold Storage Company (CSC), Zimbabwe Electricity Supply Authority (ZESA), Posts and Telecommunication Corporation (Netone, TELONE, ZIMPOST and POSB Bank), FINHOLD (ZB Holdings), Industrial Development Corporation of Zimbabwe (IDCZ) subsidiaries, Olivine Holdings, AGRIBANK, CAPS, ZDC that need to be fully functional.
In an effort to revive critical sectors,
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Government has ceded 80 percent of Cold Storage Company’s shareholding to the National Social Security Authority.
In turn, NSSA will direct resources towards resuscitation of the operations of CSC, in particular the cattle scheme which is critical for increased beef production for domestic and export markets.
The CSC used to be a leader in the processing and marketing of the country’s beef.
At its peak in the 1990s, export sales were more than 25 000 tonnes with the European Union (EU) importing 9 000 tonnes, Angola 12 000 tonnes, Indian Ocean islands 3 000 tonnes and Switzerland 1 500 tonnes.
The viability of the parastatal took a severe beating when the EU suspended beef imports from the country in 2001 following the Land Reform Programme.
Prior to the illegal sanctions, the company would earn over US$150 million per year.
And the restoration of NRZ will help cut the cost of bulk freight which has pushed up the cost of production.
The parastatal is presently operating at eight percent capacity utilisation, transporting only six million tonnes of goods per annum out of 80 million tonnes the system was designed for.
Currently, only 13 locomotives are functional against an average of 78 and 3 427 wagons.
Only 106 coaches are operational, but in a bad state, against a requirement of 144 coaches.
The whole electrified section between Harare and Dabuka has been vandalised, rendering electrical locomotives useless.
The poor performance of the rail company has resulted in the massive haemorrhage of the country’s various economic sectors such as agriculture, manufacturing, mining and energy, among others.
These sectors have since transferred their bulk business to haulage trucks that have in turn destroyed the country’s road network.
Over 100, 30-tonne haulage trucks take to the roads every day.
And the dualisation of major highways is essential to revamping the economy, for example the Beitbridge-Harare-Chirundu Highway is critical to operations of industry.
So far, only Plumtree-Harare-Mutare Highway has been rehabilitated, with dualisation at 10 percent work in progress.
The roads have outlived their lifespan and many are now dilapidated and potholed with patches where efforts have been made to repair them.
Landlocked Zimbabwe is essentially a transport hub for the southern African region: Traffic from South Africa passes through Zimbabwe on its way to Zambia, Malawi, Democratic Republic of the Congo (DRC) and some parts of Mozambique.
Consignments landing at the port of Beira in Mozambique have to pass through Zimbabwe to Zambia, Botswana and Namibia.
There have been large volumes of traffic from the DRC to South Africa, also passing through Zimbabwe.
Therefore, Zimbabwe must not only rehabilitate its roads, but also modernise them.
Zimbabwe currently generates only half of its 2 200MW peak electricity demand and poor power supply has affected the mining industry.
The southern African country cannot produce enough to meet local demand despite the slow pace of economic growth and depressed industrial activity.
However, demand for power will increase significantly once the economy recovers in the wake of renewed confidence and investor interest due to the new dispensation which has ushered in a pro-business and investor friendly economic environment.
According to a report by the Zimbabwe Chamber of Mines, the country has enough coal for 8 000 years, more than 4 000 years of power-generation and 4 000 for fuels.
The country has an estimated 26 billion tonnes of unexploited coal reserves and the largest coal deposits are in Hwange.
To date, the country produces an average of two million tonnes annually, but with improved infrastructure, the country can produce up to 20 million tonnes annually.
Investments into Zimbabwe’s energy sector will help close the gap between limited local power generation capacity and demand.
The discovery of coal-bed methane gas reserves in Matabeleland North’s Lupane District a few years ago was received with optimism in view of the resource’s potential contribution to the economy.
In an era where oil and gas are the driving engine of the global economy, Zimbabwe stands to benefit immensely from exploitation of its gas deposits, which accounts for around 23 per cent of the global commercial energy mix, according to the Organisation of Petroleum Exporting Countries (OPEC).
Ironically, Zimbabwe still imports the product mainly from South Africa, years after discovering its own reserves.
Through exploitation of coal-bed methane (CBM) gas, analysts say Zimbabwe could turn from a net importer of fertilisers to a net exporter.
In a paper prepared by a local geologist, Norman Mukwakwami in 2013, the country’s gas reserves are much more than those of all other countries in the region combined.
The Southern African Development Community (SADC) gas resources amount to 420 billion cubic metres of CBM, while it is estimated that Hwange and Lupane areas have over 765 billion cubic metres of sulphur-free CBM.
However, some geologists believe reserves could run to over a trillion per cubic kilometre, suggesting the country could have one of the largest reserves in the world, alongside Canada, Russia and China.
Coal bed methane is used to produce hydrogen, which in turn is used in the manufacture of ammonia for fertiliser.
These abundant resources must be exploited in the short-term for the benefit of the country.

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