THE Confederation of Zimbabwe Industries (CZI) last week held its annual congress, after a Covid-19 pandemic-induced hiatus, amid concerns over renewed threats to macroeconomic stability from inflationary pressure and power shortages.

The CZI is Zimbabwe’s largest business organisation with members from manufacturing as well as trade, transport, information communication technology, finance, education and professional services, making up 36 sub-sectors of the Zimbabwe economy. Our Senior Staff Writer, Farai Mabeza (FM) spoke to CZI president, Kurai Matsheza (KM), pictured, at the close of the indaba on the current economic environment and what needs to be done going forward. Below are excerpts from the interview.

FM: What are your major takeaways from the just-ended congress and what is going to guide your engagements with the government going forward?
KM: There was excitement on the part of the government on all topics covered at the congress. The VP (Vice President Constantino Chiwenga) invited us as business to bring any issues and ideas to his attention as and when they arise. This shows that as government and business we are aligned in addressing issues that may impede the (country’s) attainment of Vision 2030 (of becoming an upper-middle income economy).

FM: What are the main issues that you think may affect industry in the coming year and what do you think must be done going forward?
KM: For the coming year, starting now, the first step in our view is to retire the current constraints which are: macroeconomic instability, address the currency question (exchange rate), infrastructural issues, particularly electricity availability and the ease of doing business.

FM: Is the manufacturing sector still on track to meet its projected year end capacity utilisation target of 61 percent? 
KM: Until this month of November, industry was on course to achieve the 61 percent capacity utilisation. However, the recent punishing load shedding schedules are threatening the realisation of that target.

FM: The Reserve Bank of Zimbabwe auction system has been facing challenges, what do you think must be done to make it more efficient? 
KM: Indeed there are challenges on the auction system. However, as business, we continue proffering solutions and urging authorities to implement the agreed ideas which are: only available forex should be auctioned and stick to the principles of a true Dutch Auction system.

FM: There are also reports of some people abusing the platform, what should be done to deal with such individuals?
KM: As business we’re agreed that errant behaviour should not be tolerated. Those abusing the forex system must be punished heavily within the framework of the law.
FM: Are there any changes you would like to see made on the foreign currency retention system for exporters?
KM: Our view is that the current surrender requirements are a huge tax burden on the exporters. The 40 percent must be reduced to no more than 10 percent. There is a need to put in place incentives to encourage exports … currently there is none.

FM: How much are companies investing into research and development and what is driving the trends in that area?
KM: Not much is being done in this area because business is firefighting. However, this is a key area that mustn’t be neglected as the future of any business depends on research and development. The coming in of AfCFTA (African Continental Free Trade Area) is one such development that requires companies to be at the cutting edge to survive the competition.

FM: How is industry working with innovation hubs that have been set up at various tertiary institutions?
KM: These innovation hubs are an exciting development. Great ideas are being generated and these need to be harvested and commercialised. Industry needs to work closely with institutions of higher learning and other centres to tap into innovations that will industrialise our economy.
FM: What kind of future do you see for these innovation hubs and what do they need to succeed?

KM: Funding is critical for them to succeed. With a greater focus from both government and private sector including the financial sector, this will move the country forward at a faster pace.
FM: Industry has called for a new stimulus package. In what form would you want the stimulus to be availed and how would the government raise the funds?
KM: Part of the SDRs (the International Monetary Fund’s Special Drawing Rights) could be allocated to drive and grow exports. These should be handled through the banks so that it becomes revolving and benefits a wider base. – Fingaz