The manufacturing sector at its peak contributed 23% to GDP which level has currently gone down to about 12% to GDP. It is diversified and well integrated with the rest of the economy, exhibiting, particularly, strong linkages with agriculture, mining, construction and commerce. The Government of Zimbabwe recognizes the role that industry plays in making contributions to the quick turnaround of the economy subject to the availability of resources to re-equip and retool industrial machinery and the provision of working capital for the procurement of raw materials and other inputs in the short to medium term. As such, the Government has incorporated industrial development and trade policy strategies in the various National Economic Development Policies such as the Short Term Emergency Recovery Programme (STERP I) which was subsequently followed by the Three (3) Year Macro-Economic Policy and Budget Framework 2010-2012 (STERP II) on 23 December 2009 and the Medium -Term Plan.
It is against this background that the Ministry of Industry and Commerce has spearheaded the crafting of Zimbabwe’s Industrial Development Policy (IDP) for the period 2011 to 2015, which supersedes the Industrial Development Policy 2004 – 2010. The 2011 – 2015 Industrial Development Policy was crafted on the basis of key and fundamental principles that will inform and direct the implementation of this vital economic growth and development vehicle. This five year Industrial Development Plan focuses on the development of identified strategic sectors such as the manufacturing companies, mining, agro-processing and tourism sectors in order to provide the necessary impetus for the rest of the industry to grow to pre-recession levels. These sectors are being prioritized due to their quick impact and turnaround.
b) Vision & Overall Mission of IDP 2011-2015
To create a vibrant, self-sustaining and competitive economy through promotion of viable industrial and commercial sectors as well as to transform Zimbabwe from being a producer of primary goods into being a producer of processed value-added goods for both the domestic and export market.
c) Objectives of IDP 2011 - 2015
To restore the manufacturing sector’s contribution to GDP from the current 12% to 20% and its contribution to exports from 26% to 50% by 2015.
To ensure current industrial capacity utilization increase from levels of around 43% to over 90% by the end of the planning period.
To re-equip and replace obsolete machinery in order to improve production efficiencies and product quality, making industry more competitive locally and in the region.
To promote new technologies and reduce the costs of production.
To promote utilization of available local raw materials in the production of goods.
To create additional employment in the manufacturing sector on an incremental basis as compared to the previous planning period of 2004 to 2010.
d) Industrial Development Policy Strategies
Establishment of an Industrial Development Bank: Government will establish an institution in the form of a bank primarily dedicated to financing short and long term recapitalization of industry.
Distressed Strategic Companies: As a short-term measure, the Government will initiate revival packages for distressed companies with a clear-cut exit policy on the basis of a revolving fund.
Review of Import Tariffs: The Government will review the import tariffs structure on the customs duty and VAT on industrial raw materials and packaging to level the playing field for locally produced goods.
iv. Trade Policy: A key strategic component of the Industrial Development Policy is the trade policy which will be advanced by a separate paper to support the trading environment to maximize attractiveness of Zimbabwean products in the region and globally.
Spatial Development Initiatives (SDIs): Government will put in place a short term investment strategy to unlock latent economic potential in a specific geographical area.
National trade policy
The trade function plays an important and pivotal role in the attainment of higher efficiency, productivity and international competitiveness of all economic sectors. Zimbabwe’s overall exports had been on the decline in both value and volume compared to the 1990s. Export earnings, for instance, declined by 49% from the country’s peak of around US$2.6 billion in 1997 to around US$1.3 billion in 2008. The import bill escalated exponentially during the same period increasing from US$2.2 billion in 1996 to around US$3.2 billion in 2008. The following graph depicts the general trend of Zimbabwe’s exports and imports;
Zimbabwe had not developed a comprehensive National Trade Policy document to guide her trade with the rest of the world. Since 1994, guidance had to be sought in the myriad of trade-related laws and regulations in place whose administration was scattered among various Ministries. Zimbabwe’s trade issues have been guided over the years by a series of documents that include; the Zimbabwe Trade Policy Review (1994), the Industrial Development Policies (1999 – 2003 and 2004 – 2010), the National Export Strategy (2004 - 2010) and various policy frameworks such as the ESAP, ZIMPREST, MERP, NEDPP, STERP I and the Three Year Macro-Economic Policy and Budget Framework: 2010–2012 (STERP II).
The Government of Zimbabwe acknowledges that in order for Zimbabwe to participate successfully in the changing regional and global markets, it is important to have a comprehensive and up-to-date trade policy that specifies the rules and regulations that pertain to trade. This will facilitate the country’s trade with the rest of the world to be as smooth as possible, through setting of clear standards and goals which can be easily appreciated. Hence, the trade policy documents that existed had to be reviewed and translated into a comprehensive National Trade Policy (NTP) that takes into account all the trade agreements that the country entered into in the recent years. The NTP will be the guiding document towards any future agreements between Zimbabwe and her trading partners. This NTP aims to harmonise all rules, regulations, agreements, and treaties that are scattered across various institutions that include Government Departments and private sector organisations.
The National Trade Policy is, one of the implementation strategies of the Industrial Development Policy (2011 – 2015). It is guided by a vision, mission, objectives and fundamental principles which are aimed at mainstreaming the trade function as an integral part of the national development agenda and harnessing the country’s comparative advantage.
c) National Trade Policy Vision
To have the trade function as the engine for sustainable economic growth and development of Zimbabwed) National Trade Policy Mission
To stimulate the productive sectors of the economy towards higher productivity, efficiency and international competitiveness
e) Objectives of the National Trade Policy
To leverage the Industrial Development Policy (2011 – 2015) by restoring manufacturing sector’s contribution to export earnings from the current 16% to 50% by 2015;
To stimulate and encourage value-addition of primary goods/raw materials with the ultimate target of increasing export earnings by all sectors to surpass the country’s peak of US$2.6 billion in 1997 (US$2.5 billion in 2010) to US$6 billion in 2015, translating to an annual growth rate of 20%;
To formulate a clear National Strategy for Export Development and Promotion for the country in order to enhance access and competitiveness of Zimbabwe’s exports in regional and international markets.
To improve the country’s current account balance and balance of payments through increased export earnings and control of import expenditure.
To give guidance on tariff policy, non-tariff measures and trade defence mechanisms with the aim of promoting trade and protecting local industry from international competition subject to international obligations.
Ministry of Industry and Commerce
13th Floor Mukwati Building
Cnr. 4th Street/Livingstone Avenue
Private Bag 7708