AT least 27 000 jobs have been lost in the clothing and textile industry in the last decade due to economic challenges besetting the sector, a government official has said.
Report by Tarisai Mandizha
Delivering a speech on behalf of Industry and Commerce minister Welshman Ncube, a senior official in the same ministry, Stanslous Mangoma, said the number of people employed by the sector had plunged to 8 000 from a peak of 35 000 due to a host of problems which include influx of cheap imports as well as working capital constraints.
“As you will no doubt be aware, the cotton, textile and clothing value chain contributes significantly to gross domestic product (GDP) at 5% with revenue accounting for slightly over $2,6 million in 2011 alone and at peak in the 1990s employing over 35 000 people,” Ncube said.
“This figure has now gone down to approximately 8 000 with contribution to GDP having shrunk to just under 2%.”
Ncube said Zimbabwe was one of the few countries in the world which in the late 1980s and early 1990s boasted of full value-adding chain and that chain had been broken in the last decade mainly due to successive poor agriculture seasons.
He said the situation had been compounded by an unprecedented economic meltdown in 2008, which was characterised by foreign currency shortages, runaway inflation and weak local currency.
Ncube said the situation hasdfurther been worsened by the insatiable appetite for imported products in particular cheap oriental clothing and textiles items.
The Industry and Trade minister said capacity utilisation in the clothing and textile industry was currently at 30% due to lack of affordable long-term funding, competition from cheap imports and the stringent rule of origin under Southern Africa Development Community.
He, however, said government was working towards the attainment of the Industrial Development Policy for the implementation of an industrial cluster-based concept for the clothing and textile sector.
“As you are well aware, industrial parks or clusters are increasingly being recognised as an effective means of nurturing the local industry’s main drivers of the country’s entire value chain as well as capitalise on geographical concentration and interconnections of firms and ancillary units, procurement and marketing synergies,” he said.
The ministry, he said, with the assistance of Common Market for Eastern and Southern Africa secretariat, conducted preliminary surveys on both geographical and industry-based approach had identified the Midlands and Gokwe, as well as Harare, as possible areas for situating these clusters.
He added that appropriate incentives over and above the standard which are provided under Zimbabwe Investment Authority were currently being crafted.
Ncube said the government was in negotiations with South Africa to resolve the outstanding issues on the 1964 bilateral trade agreement, after Zimbabwe’s major trading partner suspended the arrangement in 2007.
“We are currently in negotiations with South Africa to resuscitate the 1964 bilateral trade agreement and will continue to engage to ensure the realisation of this goal,” Ncube said.
The trade agreement between South Africa and Zimbabwe that entered into force on November 30 1964, accords preferential treatment to goods and services in the form of rebates on duty and duty-free market entry.
Some products including textile and clothing are subject to quotas and rules of origin when entering the two markets.
He said the government has plans to put in place measures that will establish a duty rebate system, which will allow the sourcing of raw materials not locally produced via the application of user friendly modalities.