…“It’s mostly flour and water, but no manufacturing industry,” Minister says
By Bright Zhou
Zimbabwe is importing around US$40 million per year worth of macaroni and spaghetti mainly from Egypt, a development that depicts the country’s slow pace of industrialization.
Pasta is not even the staple food in Zimbabwe, but has become a household food commodity because of its price, pushing retailers to stock it in bulk, mostly from out of the country.
Minister of Industry and Commerce Mangaliso Ndlovu revealed this while speaking at a workshop for a joint Parliamentary Portfolio Committee on Industry and Commerce; and the Thematic Committee on Indigenization and Empowerment held at Great Zimbabwe Hotel on May 11, 2024.
Ndlovu said one of the ways the country was losing revenue was through the importation of pasta from Egypt despite the availability of flour and water, which are the main ingredients required for its production, saying the country was looking into reducing the importation as National Foods is anticipated to start manufacturing soon.
“As a country, we are importing annually about US$40 million worth of pasta which is made of flour and water only. National Foods will be the first company to manufacture pasta. I am told and we hope that the import substitution will be up to US$8 and US$10 million but they believe that they have the capacity if they get all the policy support as they have indicated to fully supply the domestic market and even penetrate the export markets.
“They are contracting wheat farmers, milling wheat into flour and that’s what they have been focusing on, they have told us that the moment you move up the value chain the margins begin to increase so they have much higher margins when they are now into pasta and they will also be commissioning a biscuit factory in the next few weeks and the margins become higher.
“This is where our economy stands to benefit more so we will be supporting companies and sectors that are focusing mainly on moving up the value chain,” said Ndlovu.
Ndlovu further said most of the goods that companies were importing could be manufactured locally and this was resulting in a trade deficit in the country.
“Most businesses tend wanting to import things that we can even begin a conversation of manufacturing locally so the structural transformation I believe is fundamental when we start to focus on manufacturing for manufacturing.
“We generate exports in the range of close to US$10 Billion but we still have a trade deficit because of our appetite to import. We have no problem with foreign currency if we manage it well so that’s why we need as legislators to support the domestic currency and try to come up with better strategies that will promote its uptake. I believe that is our fighting chance than to always think the USD is our savior,” said Ndlovu.
He justified the introduction of the ZimGold (ZiG) currency saying no industry can thrive in a dollarized economy since consumers favor imported goods from other countries rather than buying goods from their industries hence local industries will produce for fewer consumers.
“The country cannot industrialize in a dollarized economy because the currency inevitably gives consumers the appetite to import goods from other countries.
“The ratio of people with cars in the UK is almost four people per car whereas in Zimbabwe we are almost close to two people per car, you will not be surprised to find one household with eight cars and about two people being able to drive.
“It is the appetite for importation that we have and these are the consequences of a dollarized economy. Many people in Zimbabwe have bought cars from UK and this brings an inability to invest in our manufacturing industries because the cost will be much higher in the region while consumers need to import cheaper goods,” said Ndlovu.
Ndlovu said a country with sanctions will have issues in industrialization for instance access to capital will be expensive or unavailable.
“When you are a country under sanctions there are certain issues that are not available to you when we look at industry perspectives it means your access to capital is either very expensive or not available at all, if you get it the tenure is also very difficult and the market access is minimal, this is what has seen most of our industries suffering,” said Ndlovu.
Speaker of Parliament Advocate Jacob Mudenda said parliament should work in hand with people for a better economy and industry. He also said the country will not have a macro-economy if Parliament is not working with the people.
“To have a macro-economy parliament needs to work in hand with people for industrialization and to increase the economy of the country,” said Mudenda.
Chief Director in the ministry of Industry and commerce Florence Makombe said they had to monitor business operations in reserves and Export Market Companies to identify marketing products from Zimbabwe to boost the economy.
“We monitor business operations especially in reserve centres to see what is happening as business is concerned, we also look at the Export Market Companies to identify the marketing products from Zimbabwe, we have done this to boost the country’s economy and industrialization,” said Makombe.
