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Friday, May 24, 2024

Domestication of value chain to boost economic growth

Story by Yolanda Moyo

LOCALIZATION of value chains has been identified as a key enabler for economic growth as the country pursues vision 2030.

The oil sector is among the sectors that have proved that localisation of funding and embracing value addition plays a key role in the growth of the economy.

While speaking on the sidelines of a Value Chains Review Workshop in Bulawayo this Wednesday, Oil Expressors Association chairperson, Mr Busisa Moyo said the sector is targeting to exceed 100 000 tonnes of soya bean this year.

Mr Moyo said, “We are currently on the next stage where we are working backwards to localise the value chain suppliers or the ecosystem that supplies that final product. The growing soya bean hectarage is part of that process and this year we expect 100 000. Despite being behind our competitors regionally, we are going in the right direction. If we continue to grow by 20 per cent every year it means we are saving foreign currency, we are creating jobs in the primary production in the farms but also every job created in the farm has a job created downstream. This means of what we put on the shelves as the final a larger proportion is made from local products definitely capacity utilisation goes up.’’

With the government supporting retooling within selected value chains through the International Monetary Fund Special Drawing Rights (SDR) facility, manufacturers are upbeat that the move will increase capacity utilisation for underperforming sectors.

Mr Tararama Gutu of the Association of Cotton Value Adders of Zimbabwe said, ‘‘We will certainly be shot capacity utilization if we get funds to retool and address challenges we are facing and be able to supply products to various divisions.’’

“Our capacity utilisation is currently hovering around 20 per cent. We appreciate the inclusion of the leather sector earmarked for development. Some of the challenges we are facing include retooling and skills and the support from the government is set to address that and look at 40 per cent utilisation in the next two years and 75 per cent in 2030,” noted Mr Jacob Nyathi from the National Leather Working Group.

For those value chains outside the SDRs, the government will provide concessionary funding support through the Industrial Development Fund under the Industrial Development Corporation of Zimbabwe.

This year, the government is targeting capacity utilisation of 70% and a manufacturing growth rate of 2.5%, with calls for continued close collaboration among stakeholders to achieve set targets.

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