Zimbabwe imports about US$40 million worth of pasta and noodles annually mainly from Egypt, a development that illustrates the slow pace of industrialization in the country.
Pasta is not even a staple food in Zimbabwe, but has become a household staple due to its price, prompting retailers to stock it in large quantities, mostly from outside the country.
Industry and Trade Minister Mangaliso Ndlovu disclosed this while speaking at a workshop of the Parliamentary Joint Portfolio Committee on Industry and Trade; The Thematic Committee on Indigenization and Empowerment held at the Great Zimbabwe Hotel on 11 May 2024.
Ndlovu said one of the ways the country lost revenue was by importing pasta from Egypt despite the availability of flour and water, which are the main ingredients needed for its production, saying the country is looking to reduce imports because the National Food Corporation is expected to begin manufacturing soon.
“As a country, we annually import about US$40 million worth of pasta made from flour and water alone. The National Food Company will be the first company to manufacture pasta. I have been told that we hope the import substitution will reach US$8 and 10 million, but they believe they have the capacity If they get all the political support they also indicated to fully supply the domestic market and even penetrate the export markets.
“They contract with wheat farmers, they mill the wheat into flour, that’s what they’ve been focusing on, and they’ve told us that the minute you move up the value chain, the margins start to increase so they have much higher margins when they now turn to pasta.” They will also be running a biscuit factory in the next few weeks and the margins are getting higher.
“This is where our economy will benefit the most, so we will support companies and sectors that are primarily focused on moving up the value chain,” Ndlovu said.
Ndlovu also said that most of the goods imported by companies could be manufactured locally, leading to a trade deficit in the country.
“Most companies tend to want to import things that we can even start a conversation about manufacturing locally, so I think a structural shift is key as we start to focus on manufacturing for the sake of manufacturing.
“We generate exports in the range of nearly 10 billion US dollars but we still have a trade deficit due to our appetite for imports. We have no problem with foreign currencies if we can manage them well, which is why we as lawmakers need to support the local currency and try to come up with better strategies than “I think this is our fighting chance instead of always believing that the US dollar is our savior,” Ndlovu said.
He justified the introduction of the ZimGold (ZiG) coin by saying that no industry can flourish in a dollar economy because consumers prefer goods imported from other countries rather than buying goods from their own industries and thus local industries will produce for fewer consumers.
“The country cannot industrialize in a dollar-based economy because the currency inevitably gives consumers the desire to import goods from other countries.
“The proportion of people with cars in the UK is approximately four people per car while in Zimbabwe we are close to approximately two people per car, and you would not be surprised to find one household with eight cars and about two people able to drive.
“It is our appetite for imports and these are the consequences of the dollarized economy. A lot of people in Zimbabwe have bought cars from the UK and this leads to an inability to invest in our manufacturing industries because the cost will be much higher in the region while consumers need to import cheaper goods,” Ndlovu said. .
Ndlovu said a sanctioned country would face issues in manufacturing, for example, access to capital would be expensive or unavailable.
“When you are a sanctioned country, there are some issues that are not available to you when we look at industry perspectives, it means that your access to capital is either very expensive or not available at all, and if you do get it then the tenure period is also very difficult,” Ndlovu said. “Market access is very limited, and this has led to most of our industries suffering.”
Parliament Speaker Barrister Jacob Mudenda said Parliament must work hand in hand with the people for a better economy and industry. He also said that the country would not have a macro economy if Parliament did not work with the people.
“Having a macroeconomic parliament requires working side by side with the people to industrialize and increase the country’s economy,” Mudenda said.
Ministry of Industry and Trade Principal Director Florence Makumbi said they should monitor business operations in reserves and export market companies to identify marketable products from Zimbabwe to boost the economy.
“We are monitoring business operations especially in reserve centers to see what is happening in terms of business, we are also looking at export market companies to identify marketing products from Zimbabwe, we have done this to boost the country’s economy and industrialization,” Makumbi said. . Telezem News
