Industry has accused Government of prioritising foreign investors over their domestic counterparts amid fears local business will be swallowed and or pushed out by large multinationals.
A pro-economic agenda anchored on international re-engagement and a new culture of enabling business has been at the core of President Emmerson Mnangagwa’s strategy since he came into office in November to end former president Robert Mugabe’s 37-year rule whose last twenty years was characterised by economic stagnation and deindustrialisation.
This has resulted in a lot of interest among foreign investors including multi billion-worth multinationals like General Electric, Phillips, Royal Dutch as well as McKinsey & Company.
Already more than $11 billion worth of investments commitments have been made in various sectors of the economy by foreign players.
As these positive developments unfold, local business, still struggling to retool and raise working capital due to lack and high cost of capital as well as viability challenges from
high operating and utility costs are watching on the side-lines slowly coming to the conclusion that their space is being invaded and that
Government has a negative attitude towards them.
In December last year, industry said Zimbabwe’s manufacturing sector required about $8 billion for working capital and equipment upgrades to arrest a downward spiral in capacity utilisation and collapse of firms due to viability challenges.
A Confederation of Zimbabwe Industries (CZI) annual general meeting held in the capital yesterday accused Government of being biased towards FDI. The meeting also challenged the largest industry body’s secretariat to come up with a strategy to engage Government on the role of domestic capital in the empowerment discourse.
In December last year, CZI argued some companies were in their infancy given that they had started retooling since introduction of the multiple currency system in 2009. As such there is need for government to nature them until they reached 65 percent capacity utilisation.
Various members of the CZI national council urged the body to engage Government and ensure a role for local business in the economy.
“The President is a listening President and he has said it so we must engage him.”
“The new dispensation has a bias towards FDI. It has not been said but we have seen it,” said one of the members.
“We want to avoid preferential treatment for some companies coming in because we have people who are operating and where do those that are operating go,” said another member.
The meeting alleged a decision to repeal the indigenisation law is one such indicator that foreign capital is being given preference.
CZI members argued local businesses should have some sectors reserved for them.
“There is no point in bringing foreign investors just to open the same factory next to yours that is struggling or to start producing bottled water and joining vendors on the streets because we have seen some Chinese invading our streets with their goods,” said a member.
“If it happens that way then there is no multiplier effect, its actually diminishing returns.”
These concerns come as CZI said some of its members were struggling to even pay membership subscriptions to the body.