Zimbabwe - Industry

Zimbabwe has a substantial and diverse manufacturing base, which is partly a legacy of the international sanctions imposed over the five years prior to independence. Industry accounted for only 14% of GDP in 2000, however. Manufacturing was at its lowest level in 15 years in 2000 due to civil unrest. Food and beverages, minerals processing, chemical and petroleum products, and textiles account for the majority of the value added by manufacturing. Lower levels of consumer demand because of high prices have affected producers of many household goods, clothing, footwear, drink, and tobacco products.

The Zimbabwe Iron and Steel Corporation (ZISCO) was operating at 30% in 1996, and supplied 60% of local need. The Zimchem chemical refinery processes a range of chemical products. Cement is produced in large quantities. Zimbabwe also has a substantial cotton and textile industry. The textiles industry has lost some 17,000 jobs in recent years to foreign competition from South Africa, which used subsidies, export incentives, and tariff protection to support its textiles industry. The gold mining industry faced collapse and closure in 2000 because of a lack of foreign exchange. Gold output dropped by half in that year, and 46,000 jobs were in peril. The tobacco industry was also in danger of foreclosure due to farm repatriation. As of 2002, the dire condition of the economy (a severely problematic balance of payments situation, devaluation of the currency, desperate foreign currency shortage, high inflation, very high interest rates, a fall in exports, and fuel shortages) was damaging the operations and viability of the manufacturing, construction, and mining sectors, in addition to agriculture. In 2000, manufacturing contracted at least 10.5%.

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what needs to be done to regain the capacity utilisation levels of 2009 and prio? what factors are contributing to this sluggish recovery?what strategic advice can be given in the short to medium term?

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