PRESENTATION TO THE CHARTERED ACCOUNTANTS OF ZIMBABWE

SEMINARBY

HON.C.I.MABUWADEPUTY MINISTER OF INDUSTRY &

COMMERCE

GOVERNMENT’S INITIATIVES TO REVIVE INDUSTRY

30 JUNE 2015, HARARE

PRESENTATION OUTLINE

• ZIMASSET IMPLEMENTATION & COORDINATION ARCHITECTURE

• ZIMASSET CLUSTER MATRIX

• ZIMASSET ENABLING CLUSTERS

• ZIMASSET CLUSTERS COMPOSITION

• ZIMASSET : VALUE ADDITION & BENEFICIATION CLUSTER

MEMBERS

• VALUE ADDITION & BENEFICIATION CLUSTER-VISION, MISSION

& GOALS

• VALUE ADDITION & BENEFICIATION CLUSTER OBJECTIVES

• VALUE ADDITION & BENEFICIATION KRAS

• CLUSTER PRIORITY AREAS FOR 2015

• DECLINING INDUSTRY CAPACITY UTILISATION

• TRADE DEVELOPMENTS

• FOREIGN DIRECT INVESTMENT

• CREDIT TO PRIVATE SECTOR

• PRIVATE SECTOR SHORT TERM LOANS

• PRIVATE SECTOR LONG TERM LOANS

• SECTORAL DISTRIBUTION OF CREDIT

• DISTRIBUTION OF CREDIT BY PURPOSE

• CAPITAL ACCOUNT CONSTRAINTS

• INDUSTRY REVIVAL INITIATIVES

• INDUSTIAL REVIVAL POLICY MEASURES

ZIMASSETIMPLEMENTATION & COORDINATION

ARCHITECTURE

LEVEL COMMITTEE/STRUCTURE SECRETARIAT

POLICY LEVEL STEERING COMMITTEE( CHAIR-

CHIEF SECRETARY TO OPC)

MEETS QUARTERLY

COMPRISES GOZ & PRIVATE

SECTOR CLUSTER CO-

CHAIRPERSONS

ZIMASSET TECHNICAL

SECRETARIAT

POLICY LEVEL ZIMASSET JOINT REVIEW

COMMITTEE

CHAIR-DEP CHIEF SEC-OPC

MONTHLY MEETING

ZIMASSET TECHNICAL

SECRETARIAT

TECHNICAL LEVEL ZIMASSET CLUSTERS CO-CHAIRPERSONS

SECRETARIAT

ZIMASSET CLUSTER MATRIX

• FOOD SECURITY AND NUTRITION CLUSTER

• SOCIAL SERVICES AND POVERTY ERADICATION CLUSTER

• INFRASTRUCTURE AND UTILITIES

• VALUE ADDITION AND BENEFICIATION

• FISCAL REFORM MEASURES SUB CLUSTER

• AID COORDINATION

• PUBLIC ADMINISTRATION, GOVERNMENT AND

PERFORMANCE MANAGEMENT

ZIMASSET CLUSTER MATRIX

• FOOD SECURITY AND NUTRITION CLUSTER

• SOCIAL SERVICES AND POVERTY

ERADICATION CLUSTER

• INFRASTRUCTURE AND UTILITIES

• VALUE ADDITION AND BENEFICIATION

• FISCAL REFORM MEASURES SUB CLUSTER

• AID COORDINATION

• PUBLIC ADMINISTRATION, GOVERNMENT

AND PERFORMANCE MANAGEMENT

ZIMASSET ENABLING CLUSTERS

FISCAL REFORM

MEASURES

AID COORDINATION PUBLIC

ADMINISTRATION,

GOVERNANCE &

PERFORMANCE

MANAGEMENT

CHAIR-MINISTRY OF

FINANCE

CHAIR-MINISTRY OF

FINANCE

CHAIR – OFFICE OF THE

PRESIDENT & CABINET

ZIMASSETCLUSTERS COMPOSITION

• ZIMASSET CO-CHAIRPERSONS

• PERMANENT SECRETARIES

• FOCAL PERSONS OF LINE MINISTRIES

• PRIVATE SECTOR REPRESENTATION (

BUSINESS/SECTOR ORGANISATIONS)

• DEVELOPMENT PARTNERS( UN, WORLD

BANK,IMF & AFDB)

• NGO REPRESENTATION

• ACADEMIA

• CONVENER OF MEETINGS-ZIMASSET

TECNHICAL SECRETARIAT

ZIMASSETVALUE ADDITION & BENEFICIATION CLUSTER MEMBERS

GOVERNMENT OF ZIMBABWE REPRESENTATION BUSINESS / SECTOR ORGANISATIONS

Ministry of Industry and Commerce (MoIC)

(Co-Chair)

ZNCC,CZI ( CO-CHAIRS)

EMCOZ, BUSINESS ASSOCIATION OF

ZIMBABWE

Ministry of Mines and Mining Development (MoMMD)

(Co-Chair)

CHAMBER OF MINES, SMALL-SCALE MINERS

Ministry of Agriculture, Mechanisation and Irrigation

(MoAMI)

CFU, ZCFU,FARMERS DEVELOPMENT TRUST

Ministry of Energy and Power Development (MoEPD) ZERA

Ministry of Higher and Tertiary Education, Science and Technology Development (MoHTESTD)

ACADEMIA & RESEARCH INSTITUTIONS

Ministry of Small and Medium Enterprises and

Cooperative Development (MoSMECD)

COOPERATIVES, SME BUSINESS

ORGANISATIONS

Ministry of Tourism and Hospitality Industry (MoTHI) ZIM TOURISM AUTHORITY,ZIMBABWE COUNCIL

VALUE ADDITION & BENEFICIATION CLUSTER VISION, MISSION & GOALS

• CLUSTER VISION

• VALUE ADDITION AND BENEFICIATION FOR AN EMPOWERED SOCIETY AND GROWING ECONOMY.

• CLUSTER MISSION

• TO IDENTIFY HIGH IMPACT VALUE CHAINS, PROMOTE GROWTH OF VALUE ADDITION AND

BENEFICIATION ACTIVITIES AND CREATE A CONDUCIVE POLICY, INSTITUTIONAL AND REGULATORY

FRAMEWORK FOR ENHANCED PRODUCTIVITY AND COMPETITIVENESS.

• CLUSTER GOALS

• TO INCREASE THE MINERAL BENEFICIATION, MANUFACTURING AND SERVICES SECTORS` GDP

GROWTH RATE FROM THE CURRENT 3.1 TO 6.6% BY 31 DECEMBER 2018.

VALUE ADDITION & BENEFICIATIONCLUSTER OBJECTIVES

FOR 2015

• TO INCREASE PRODUCTION OF VALUE ADDED GOODS AND SERVICES BY 10% BY 31 DECEMBER 2015.

• TO INCREASE DIRECT INVESTMENT INTO MINING, MANUFACTURING AND SERVICES SECTOR BY 10% BY 31 DECEMBER

2015.

• TO INCREASE EXPORTS OF VALUE ADDED GOODS AND SERVICES BY 5% BY 31 DECEMBER 2015.

• TO REDUCE THE COUNTRY’S TRADE DEFICIT BY 5% BY 31 DECEMBER 2015.

• TO INCREASE REVENUE FROM VALUE ADDED GOODS AND SERVICES BY 10% BY 31 DECEMBER 2015.

• TO INCREASE EMPLOYMENT IN THE VALUE ADDITION AND BENEFICIATION CLUSTER BY 3% BY 31 DECEMBER 2015.

• TO IMPROVE THE ZIMBABWE EASE-OF-DOING-BUSINESS WORLD RATING FROM 168 OUT 189 TO BELOW 150 BY 31

DECEMBER 2015.

• TO INCREASE RESEARCH AND DEVELOPMENT BY 5% BY 31 DECEMBER 2015.

CLUSTER KEY RESULT AREAS

• MANUFACTURING AND AGRO-PROCESSING

• MINING DEVELOPMENT AND PROMOTION

• TRADE, TOURISM AND INVESTMENT PROMOTION

• CAPACITY BUILDING & DEVELOPMENT

• POLICY AND LEGISLATION REFORMS

CLUSTER PRIORITY AREAS FOR 2015

• AGRO-PROCESSING

• FRUIT JUICE MANUFACTURING

• COOKING OIL MANUFACTURING

• STOCK FEEDS PRODUCTION

• FERTILIZER PRODUCTION

• PRODUCTION AND VALUE ADDITION OF HONEY

• DEVELOPING THE COTTON TO CLOTHING VALUE CHAIN

• DEVELOPING THE DAIRY SECTOR VALUE CHAIN

• DEVELOPING THE BEEF SECTOR VALUE CHAIN

• PRODUCTION OF LEATHER AND LEATHER PRODUCTS

• PRODUCTION OF PHARMACEUTICALS

• VALUE ADDITION OF DIAMONDS (CUTTING AND POLISHING OF DIAMONDS)

• CHROME BENEFICIATION

CLUSTER PRIORITY AREAS FOR 2015

• FINALIZATION OF NEWZIM STEEL DEAL

• PRODUCTION OF ENERGY MINERALS (COAL BED METHANE GAS)

• RESUSCITATION OF DORMANT MINES

• CREATION OF INDUSTRIAL DATABASES (MINERALS, INDUSTRY, SMES)

• HUMAN CAPITAL DEVELOPMENT (ENTREPRENEURSHIP, LINKAGES WITH INSTITUTIONS OF

HIGHER LEARNING).

• TOURISM DEVELOPMENT AND PROMOTION

• TRADE AND INVESTMENT PROMOTION

• CREATION OF INDUSTRIAL AND TOURISM DEVELOPMENT FUNDS

• CAPITALIZATION OF SMALL AND MEDIUM ENTERPRISES DEVELOPMENT CORPORATION

DECLINING INDUSTRIAL CAPACITY UTILIZATION

SOURCE-RESERVE BANK OF ZIMBABWE/CZI

32.3%

43.7%

57.2%

44.9%

39.6%36.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

2009 2010 2011 2012 2013 2014

TRADE DEVELOPMENTS (US$M)SOURCE-RESERVE BANK OF ZIMBABWE

1,613

3,244

4,416 3,808 3,694 3,558 3,682

3,213

5,162

7,562

6,710 6,809 6,306 6,175

(4,000)

(2,000)

-

2,000

4,000

6,000

8,000

10,000

2009 2010 2011 2012 2013 2014 2015

Exports Imports Trade Balance

FOREIGN DIRECT INVESTMENT (US$M)SOURCE-RESERVE BANK OF ZIMBABWE

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014

FDI Inflows FDI (Net) FDI Outflows

CREDIT TO PRIVATE SECTORSOURCE-RESERVE BANK OF ZIMBABWE

• IN LINE WITH GROWTH IN MONEY SUPPLY, GROWTH IN CREDIT TO THE PRIVATE, FELL FROM

AS HIGH AS 600% IN 2010 TO AN AVERAGE OF 2.6% IN THE FIRST FOUR MONTHS OF

2015.

• SLOWDOWN IN CREDIT DOES NOT SUPPORT THE ENVISAGED REAL GDP GROWTH RATES

OF AN AVERAGE OF 7.3% PROJECTED IN ZIMASSET.

• LIMITED ACCESS TO CREDIT STARVES THE PRIVATE SECTOR OF RESOURCES TO GROW THE

ECONOMY.

• THE RESUSCITATION OF THE INTERBANK MARKET THROUGH THE INTRODUCTION OF THE

AFRITRADE FACILITY IS ENVISAGED TO EASE LIQUIDITY RISKS, ALLOWING BANKS TO

INCREASE THEIR INTERMEDIATION ACTIVITIES.

PRIVATE SECTOR SHORT TERM LOANS (US$M)

SOURCE-RESERVE BANK OF ZIMBABWE

0

200

400

600

800

1000

1200

2008 2009 2010 2011 2012 2013 2014

ShortTerm Loans (Receipts) ShortTerm Loans (Payments) ShortTerm Loans (Net)

PRIVATE SECTOR LONG TERM LOANS (US$M)SOURCE-RESERVE BANK OF ZIMBABWE

-200

0

200

400

600

800

1000

1200

1400

1600

2008 2009 2010 2011 2012 2013 2014

Disbursements Scheduled Payments Net Long Term Loans

SECTORAL DISTRIBUTION OF CREDIT(2010-MAR 2015)SOURCE-RESERVE BANK OF ZIMBABWE

HOUSEHOLDS, 18.38%

AGRICULTURE, 18.54%

MINING, 6.75%

MANUFACTURING, 15.26%

DISTRIBUTION, 15.06%

CONSTRUCTION, 1.02%

TRANSPORT, 1.59%

COMMUNICATIONS, 1.48%

SERVICES, 17.27%

FINANCIAL ORGANISATIONS, 4.61%

CONGLOMERATE, 0.03%

DISTRIBUTION OF CREDIT BY PURPOSE(2010-MAR 2015)

SOURCE-RESERVE BANK OF ZIMBABWE

Consumer Durables, 11.33%

Capital expenditures,

7.99%Recurrent Expenditures,

79.94%

Pre & Post shipment

financing, 0.74%

CAPITAL ACCOUNT CONSTRAINTS

CAPITAL ACCOUNT PERFORMANCE REMAINS CONSTRAINED

BY:

SUBDUED FDI INFLOWS;

LACK OF BALANCE OF PAYMENTS AND BUDGETARY

SUPPORT;

STRINGENT CONDITIONS PRECEDENT SET BY SOME

INTERNATIONAL LENDERS;

LIMITED ACCESS TO AFFORDABLE INTERNATIONAL

CREDIT LINES.

INDUSTRY REVIVAL INITIATIVES

• TRI-PARTITE FREE TRADE AREA AND BENEFITS ACCRUING FROM I-EPA

• RULES OF ORIGIN,MARKET ACCESS,TRADE FACILITATION,TRADE IN SERVICES

• LOCAL MARKET SURVEYS TO ESTABLISH STATUS OF LOCAL PRODUCERS( MAY-JUNE 2015)

• DATABASE DEVELOPMENT OF MANUFACTURERS FOR INFORMED DECISION MAKING (JUNE 2015)

• MANUFACTURING MARKET SURVEY ( CZI,ZIMSTATS)(WIP)

• TARIFF INSTRUMENTS ON SELECTED PRODUCTS TO SUPPORT LOCAL INDUSTRY

• NATIONAL COMPETITIVENESS COMMISSION BILL/RBZ INITIATIVES-BOND COINS & PR ON COSTS REDUCTION

• DIMAF 2-WORK IN PROGRESS ON MODALITIES/PRESCRIPTIVE MODEL

• INDUSTRIAL DEVELOPMENT FUND ( AS PER IDP 2012-16 AND ZIMASSET 2013-18)

INDUSTRY REVIVAL POLICY MEASURES

• LEATHER & LEATHER PRODUCTS STRATEGY ( 2013)( ITC/COMESA FUND)

• STATUTORY INSTRUMENT 16 OF 2015 ON EXPORTS OF UN-BENEFICIATED HIDES

• IMPLEMENTATION MATRIX ON VALUE CHAIN DEVELOPMENT

• PHARMACEUTICAL INDUSTRY STRATEGY DEVELOPMENT ( UNIDO/COMESA FUND)

• TARIFF MEASURES ON RAW MATERIAL & FINISHED GOODS

• PROCUREMENT POLICY INITIATIVES/INTERVENTIONS

• COTTON TO CLOTHING VALUE CHAIN STRATEGY (2014)( COMESA FUND)

• STUDY VISIT TO KENYA ON POLICY DEVELOPMENT(ALREADY ACTIONED)

• STUDY VISIT TO EGYPT ON POLICY DEVELOPMENT(PENDING)

• COTTON PRICING MODEL DEVELOPMENT(WIP)

• ASSISTANCE TO ASSOCIATION OF COTTON VALUE ADDERS OF ZIMBABWE(ACVAZ)

THANK YOUSIYABONGA

TATENDA

EMAILS: ptakavarasha@mic.gov.zw

Cell: 0713026980 , 0738002005 & 0772635366Direct: 04798424