ECA/MRAG/95/10/MR
EEllRAG
tCA Muliidisciplmary Regional Advisory Group
BUILDING AND REHABILITATING CRITICAL CAPACITIES TO EXPLOIT NATURAL RESOURCES AND DIVERSIFY
THE ECONOMY INTO PROCESSING AND MANUFACTURING IN ZIMBABWE
Advisory Report by Edward A. Tiagha
Regional Adviser in Industry and Technology Development
Daniel B. Ndlela, Zimconsultand3^9.5(689.1:
B9325 c. 4
ECA/MRAG/95/10/MR
UNITED NATIONS ECONOMIC COMMISSION FOR AFRICA MULTIDISCIPLINARY REGIONAL ADVISORY GROUP
BUILDING AND REHABILITATING CRITICAL CAPACITIES TO EXPLOIT NATURAL RESOURCES AND DIVERSIFY THE ECONOMY
INTO PROCESSING AND MANUFACTURING IN ZIMBABWE.
ADVISORY REPORT BY:
EDWARD A. TIAGHA
REGIONAL ADVISER ON INDUSTRY AND TECHNOLOGY DEVELOPMENT
AND
DANIEL B. NDLELA, ZIMCONSULT
ADDIS ABABA 10 APRIL 1995
ECA/MRAG/95/10/MR TABLE OF CONTENTS
I. INTRODUCTION AND STATEMENT OF THE PROBLEM 1
A. Terms of Reference 4
II: MACRO-ECONOMIC POLICY FRAMEWORK 4
A. Introduction
4 Table 1. Percentage GDP at factory cost by industry of origin, in $Z
(at constant 1980 prices)
6 B. Industrial sectors
8
1- Value Added Per Sector 9
2. Number of people employed oer sector. 11
3. Profitability per sector
11 Table 2: Employees by industrial sector (annual average in thousands)
13 Table 3: Earnings ($Z million) by industrial sector 15
C. Manufacturing sector 16
Table 4: Industrial production 1955-92 (net output) 18
D. Location of industries 19
Table 5: Geographical concentration of manufacturing industry
(1977 and 1983) 20
E. Policy framework 21
F. Regional integration 22
Table 6: Exports classified by principal country regions
($Z Thousand) 24
Table 7: Imports classified by principal regions
($Z Thousand) 24
III. EXPERIENCE WITH POLICIES AND PRIORITIES FOR STRENGTHENING CAPACITIES FOR EXPLOITATION OF NATURAL RESOURCES 25
A. Origins of industrialization 25
B. The UDI Period 26
C. The post-independence period 28
Box 1 Successful tranformation of local natural
raw materials into finished goods in Zimbabwe 31
IV. PROGRAMME OF ACTION FOR DEVELOPING HUMAN, INSTITUTIONAL AND FINANCIAL CAPABILITIES FOR TRANSFORMING NATURAL RESOURCES INTO SEMI-OR FINISHED GOODS
a « 34
A. Overview of technological skills mastery. 34
B. Some possible pathways to acquiring technological skills 35 C. Human capacities for transforming natural resources in Zimbabwe 36
1. Historical context
2- The acguisition and development of technical skills during
36 the Pre-Unilateral Declaration of Independence fUDl|period 0-7
3- The acouisition and development of technical skills during the
Unilateral Declaration of Independence flins) PAri?H
Table 8: Evolution of technological mastery in Zimbabwe. 40
394- The acouisition and development of technical slrilk during the
post-independence period 40
Table 9: Human resources capital programme 1986/1987
to 1990/1991 ($thousands) 42
D. Institutional capacities for facilitating the transformation of natural resources
into finished goods. 44
1- Government skills training programme for natural resource
transformation 44
2- In-house training programmes bv the private sector for natiir?i-
resosurces transformation 45
3- Tephnical skills training provided by other civic
organizations for na^ral-resource transformation 46
E. Resource mobilization for financing the transformation of natural
resources into manufactured goods. 47
SUMMARY AND CONCLUSIONS
49
A. Summary 49
B. Recommendations 52
Annex 1. Percentage GDP real Growth Rates 65
Annex 2. Index of volume of production of the manufacturing
industries, 1970-1985 66
Annex 3. Percentage distribution of skilled workers
in the manufacturing sector 67
Annex 4. Quantity and value of production of all metals
and minerals for 1989 to 1993. 68
Annex 5: Some key characteristics 69
Annex 6A: Zimbabawe's total trading position by 69
Southern African Region and the resr of the world 70 Annex 6B: Summary of destinations - January - May 1993
($'000J 71
Annex 7: Profile of sample firms 74
Annex 8: Bibliography 76
Annex 9: List of persons encountered 78
I. INTRODUCTION AND STATEMENT OF THE PROBLEM
1. The performance of African economies has steadily been on the decline. This
decline is perhaps more rapid in the industrial sector where the share of manufacturing in the total regional GDP declined from 11.35 per cent in 1986 to an average 10.6 per cent during the period 1990 - 1992. The MVA at 1990 prices (as a percentage of GDP) for developing Africa, has also declined from 12.1 in 1990 to 11.8 in 1993. It will be recalled that the Lima Declaration and Plan of Action on Industrial Development and Cooperation proclaimed in Lima, Peru in 1975, had called for 25 per cent of world industrial production to be located in the developing countries by the year 2000.
This ambitious target looks more and more difficult to attain and it would appear that Africa will not even attain half of this target by the year 2000, unless a lot of effort is put into the mobilization of African capacities.
2. Africa's most visible comparative advantage in the rapidly changing global context epitomized by the Uruguay round Agreement is her vast natural resources
base that include:
(a) Its vast mineral resource base distributed evenly across the continent with (i) iron ore estimated at 45 billion tons, representing 20 per cent of the world's reserve; (ii) manganese mainly found in Gabon and Ghana and representing 78 per cent of the world's known reserve; (iii) chromite mainly in Zimbabwe, Madagascar and South Africa, and accounting for 95 per cent of the world's total reserve; (iv) bauxite, alumina and aluminium mainly in Guinea and Ghana, and representing 47 per cent of the world's known reserve; (v) more than 100 billion tons of phosphates, and
representing 70 per cent of the world's reserve;
(b) Significant exploitable hydro-potential in almost all countries except Algeria, Libya, Botswana, Chad, and Togo, estimated at over 360 giga watts (GWh) and representing 16 percent of the world's total.1 However, only eleven African countries that are major electricity producers (over 3 x 109 GWh per year). These include Algeria, Egypt, Libya, Tunisia and Morocco in the North, South Africa, Zambia and Zimbabwe in the South, and Nigeria, Ghana and Zaire in the rest of the region, while 25 countries, or
one half of Africa, have electricity production of less than 0.5x109 GWh per year and
energy consumption of less than 1 Gcal per capita, the lowest in the world;(c) Oil that is produced in 12 countries: Algeria, Libya, Egypt and Tunisia in the North and Nigeria, Benin, Cdte d'lvoire, Cameroon, Congo, Gabon, Angola and Zaire in the West and Central Africa. With the exception of nine net oil exporters, all African countries import petroleum from outside the continent. At the same time, known oil
For more details see "Report on the Regional Strategy for Rational Location of Industries in the Context of the Abuja Treaty" CAMI.12/6(a). IHSD/UNECA document presented at the Twelfth Meeting of the Conference of African Ministers of Industry, in Gaborone, Botswana, from 29 May to 8 June, 1995.
ECA/M RAG/95/10/MR Page 2
reserves in many African countries are undeveloped;
(d) Africa's abundant wild life that is a major source of tourist attraction and domesticated livestock that are sources of hides, skins, and wool;
(e) A large sea coast line that is home to a variety of marine life;
world, as well as rich medicinal plants.
3. it is however, a lamentable fact that these natural resources have not been sufficiently exploited to alleviate poverty in the continent and promote sustainable development. Indeed what has taken place in recent years is that more and more, African countries have been exporting these natural resources in their unprocessed form, leaving the transformation to be undertaken by developed countries. This policy actually enhances the comparative advantage of developed countries, since the industries of these countries use these relatively cheap natural materials to serve as factor inputs into goods that are exported to Africa at exorbitant prices, and thus exacerbating the chronic balance of payment problem.
4. Furthermore, in cases where these natural resources have been transformed in the continent, there have been serious environmental cases of degradation, especially in the petroleum industries. In cases where wild life has attracted tourists from developed countries, there have not been sufficient mechanisms to monitor the ecological impact and damage to the environment. It is also a known fact that African plants are being used in laboratories in developing countries for developing better species of crops that are eventually sold to African countries. Inadequate capacities to monitor illegal fishing activities along the vast African sea coast have led to situations whereby Africa imports fish that is obtained from their sea space.
5. There is therefore, an increasing realization that African countries have to, as a matter of priority, put more efforts into the rational exploitation of their natural resources. The strategy of local transformation of natural materials into finished goods is based on the belief that increased value added to the processed raw materials will enhance their competitivity in the domestic, subregional and world markets. This transformation process, not withstanding, does not and should not preclude the realization that Africa's relative comparative advantage in natural resource endowment is seriously being eroded by relatively cheaper, readily available and better quality man-made materials from the developed countries.
6. However, with the exception of very few countries in Africa, the incoherent attempts to exploit natural resources have failed woefully. Some major causes of this failure have been as a result of poor industrial policies that do not call for adequate manpower to monitor the proper use of forests etc., and even poorer implementation strategies due principally to lack of adequate capacities to undertake these activities.
7. Thus, with a rapidly declining industrial sector (widely accepted as an engine for industrial growth and the most efficient way of resource transformation), where
ECA/MRAG/95/10/MR Page 3
the share of manufacturing in the total regional GDP declined from 11.35 per cent in
1986 to an average of 10.6 per cent during the period 1990 -1992, this coupled with
a declined MVA at 1990 prices (as a percentage of GDP) for developing Africa, from12.1 in 1990 to 11.8 in 1993, Africa has no alternative but to reverse the trend by building and rehabilitating critical capacities for resource transformation. Hence the
need to build and rehabilitate critical capacities in:(a) human resources development to carry out the rehabilitation, revitalization, and
operation of the natural resources manufacturing and service industries;(b) physical and institutional capacities to support the rehabilitation and transformation operations and;
(c) financial mobilization to pay for the rehabilitation, processing and manufacturing
activities.
8. Several strategies for industrial development have been proposed towards the goal of increasing the share of manufacturing in GDP. The strategy that appeared to capitalize on Africa's vast natural resource base was the processing of natural materials right here in Africa into semi-processed or completely processed form. The strategy of local transformation of natural materials into finished goods is based on the belief that increased value added to the processed raw materials will enhance their competivity in the domestic, subregional and world markets.
9. However, with the exception of very few countries in Africa, the implementation of this strategy has failed woefully. A major cause of this failure has been the very low utilization of installed industrial capacity that at best is around 30 to 50 per cent and at worst is at zero per cent, evidenced by abandonment of expensively acquired manufacturing installations. It was partly to address the issue of capacity under- utilization that the tenth meeting of the Conference of African Ministers of Industry held in Dakar, Senegal in July 1991 stressed the need to give priority to rehabilitation and revitalization of existing industries.
10. The determined policy of rehabilitation can be successful only if it is supported by identified critical capacities. Hence the need to develop capacities in human resources to carry out the rehabilitation, revitalization, and operation of the natural resources transformation industries; institutional capacities to support the rehabilitation and manufacturing operations and financial capacity to mobilize the resources to pay for the rehabilitation and manufacturing activities.
11. As mentioned above, there are a few African countries that have been able to transform their natural materials into successfully finished and semi-finished goods.
The purpose of this study is to present a detailed account of how Zimbabwe has been able to transform her vast natural resources into finished goods. It is hoped that other African countries might be able to learn from the example.
12. Thus, the second chapter will present a macro-economic policy framework of the country with a view to presenting the po'icies adopted by the Government, the
ECA/MRAG/95/10/MR Page 4
natural-resource base of the country and Zimbabwe's attempts at regional integration.
Chapter three will present priorities and policies on capacities for strengthening the exploitation of natural resources. The focus here will be to provide a historical perspective on Zimbabwe's industrialization. In chapter four, Zimbabwe's programme of action to transform natural resources into semi- and/or finished goods will be outlined. After presenting an overview of technological skills mastery, this chapter will address the attempts of Zimbabwe to develop human, institutional and financial capabilities. The chapter will provide examples from establishments in the country that have in one way or another contributed to sustaining the manufacturing sector that in 1991 accounted for about 25 per cent of the GDP, one of the highest in black Africa. Chapter five will present summary of the study and propose some conclusions.
The study has also provided in the text and annexes, several tables and figures that give further insight into the discussions. For completeness, a list of persons visited is given in annex 8; an extensive bibliography has also been provided for those who might want to get further information not adequately covered in the document.
A. Terms of Reference
The present study is part of a much wider exercise initiated by the Economic Commission for Africa and endorsed by Resolution 771(xxix) of the ECA Conference of Ministers that took place in Addis Ababa from 2-5 May, 1994. In the resolution, the Conference of Ministers requested the ECA Secretariat to carry out field missions to selected countries with a view to studying "best case" practises for building critical capacities in Africa in eight priority areas. The missions fielded were as follows: Ghana (policy analytic and development capacity); Mauritius (human capacities development);
Morocco (building and maintaining physical infrastructure); Nigeria (entrepreneurial capacity in the private sector); and Zimbabwe (capacities to exploit natural resources and diversify manufacturing; and strengthening capacities for food security and self sufficiency).
This report on Zimbabwe contains information that other African countries might find useful in the efforts to effectively transform their natural resources into finished goods. The highlights of the report are: (a) a box that outlines successful transformation of local natural materials in Zimbabwe, and (b) an action oriented matrix that provides actions to be taken at the national, subregional and international levels. The final results of the various "best case" studies formed the basis of a study that was presented to the ECA Conference of Ministers in 1996.
II: MACRO-ECONOMIC POLICY FRAMEWORK A. Introduction
13. Zimbabwe's economy is fairly well developed and well integrated with extensive linkages among the various economic activities. The materials-producing sectors are well established and contribute significantly to national output and employment. In
ECA/WIRAG/95/10/MR Page 5 1991 manufacturing accounted for 25 per cent of real GDP, while agriculture and mining contributed 12 per cent and 7 per cent respectively. Services make up nearly 50 per cent of GDP, broken down as: Commerce 17 per cent; Public Administration 10 per cent; Education 9 per cent; and Transport and Communications 6 per cent and other services 5 per cent (see table 1). The percentage GDP real growth rates (annex 1) show a general increase in all the sectors from 1990/1989 to 1994/1993.
Agriculture registered the highest increase in 1993/1992 (22.0 per cent), up from 3.1 in 1992/1991. This recovery could be considered remarkable given the fact that there was a negative growth of -6.6 per cent in 1990/1989. Manufacturing, on the other hand, did register a drop to -8.0 in 1993/1992, but rebounced in 1994/1993 to 6.4.
The fluctuations in the agriculture, manufacturing and other sectors could be partly attributed to effects of the drought (1992) and introduction of the Economics Structural Adjustment Programme (ESAP).
14. In 1990 Zimbabwe embarked upon an export-led economic reform programme designed to improve economic growth and employment through the attainment of higher levels of investment and export growth. As a result, local and foreign investment, including joint ventures, particularly those that are export oriented, are being encouraged to undertake productive activities. Some of the major macro- economic characteristics of Zimbabwe are as follows:
(a) A more stable macro-economic policy environment, price stability with less dependency on external financial resources as Zimbabwe enters into its second phase of the (ESAP). However, while the Government has consistently identified control of inflation as a priority issue in short-term economic management, its inability in the matters of fiscal restraint exposes the country to the dangers associated with inflation, namely: discouraging investment, making exports uncompetitive, reducing real incomes and welfare and driving up interest rates;
(b) A well-functioning infrastructure in terms of energy, water, telecommunications, transport, and improved road, rail and air links both internationally and regionally especially with South Africa;
Table1. PercentageGDPatfactorycostbyindustryoforigin,in$Z (atconstant1980prices) SECTOR 1.AGRICULTURE 2.MINING 3.MANUFACTURE 4.ELECTANDWATER 5.CONSTRUCTION 6.PUB.ADMIN. EDUCATION, HEALTH 7.OTHER SERVICES TOTAL
1988 14.2 7.0 24.0 3.1 1.4 21.7 31.0 100
1989 13.6 7.1 24.4 3.5 1.5 21.7 31.4 100
1990 12.4 7.0 2S.3 3.3 1.3 20.4 32.8 100
1991 12.2 7.0 24.8 2.9 1.3 20.4 32.8 100
1992 10.0 7.2 24.2 3.1 1.4 21.3 34.9 100
1993 12.1 7.3 22.2 3.1 1.4 20.7 33.3 100
1994 12.5 7.6 22.2 3.1 1.3 19.7 33.6 100 15.Assumptionsforestimates 1993:Rapidrecoveryinagriculture,butcontinueddeclineinmanufacturing.DeclinesinprivateandgovernmentconsumptionandGFCF;slightdeclineinpost-drought imports. 1994:Significantgrowthinproductivesectorandtoalesserextentinprivateservices.Substantialexportgrowthandsomeincreaseinprivateconsumption.GFCF andgovernmentconsumptionatstandstill.Importgrowth,buttotaNysignificantlylessthanin1991(GDPatneariysamelevelsas1991). Source:QuarterlyDigestofStatistics,variousyearsuptoDecember,1993.Estimatesfor1993and1994.seePeterRobinson,Zimconsult,mimeo.
CCpsE<dOm
U)0>o<s<oUl
0 FIG1: PERCENTAGE GDP AT FACTORY COST (BY INDUSTRY OF ORIGIN IN $Z)
'91
YEAR'92 '93 '94 AGRICULTURE MINING MANUFACTURE ELECT AND WATER
CONSTRUCTION
PUB ADMIN.ED.HEALTH
ECA/MRAG/95/10/MR Page 8
(c) With the return of peace in the sub-region, Zimbabwe continues to enjoy political stability and conditions for imported investment as well as diversification in the productive structure of the economy;
(d) Removal of foreign exchange restrictions regarding: remittance of dividends, disinvestment proceeds, royalties, commissions, etc; foreign investment through Zimbabwe Stock Exchange; abolition of foreign-exchange allocation systems and their replacement by a foreign-exchange market system where companies are now allowed to retain 100 per cent of their export earnings that can be traded through the foreign currency inter-bank market. Thus, local and foreign investment, including joint ventures, particularly those that are export-oriented, are being encouraged in
productive activities.
16. The other major macro-economic objective of the Government of Zimbabwe (GOZ) is to achieve a drop in the growth of the budget deficit to 5 per cent of GDP by the end of the first phase of the ESAP in 1995. This objective is, inter alia, being achieved through the following stratified taxation policy measures:
(a) Reductions in personal, corporate and other forms of tax, the company tax is being reduced from 40 per cent to 37.5 per cent with effect from 1 April, 1995;
(b) Expansion of sales tax to cover all services by January 1995;
(c) Reduction of the surtax beginning 1 January 1994 from 20 per cent to 15 per cent and further to 10 per cent across the board with effect from 1 August 1994;
(d) Removal of customs duty on capital goods for new investment from 1 August, 1994;
(e) Reduction of customs duty for raw materials for textiles from 10 per cent to 5 per cent and clothing duties ranging in the main from 20 and 35 per cent to 15 per cent across the board by 1 August 1994;
(f) Further removal of price controls and subsidies;
B. Industrial sectors
17. Zimbabwe's industrial sectors including: Agriculture fishing and forestry; mining and quarrying; manufacturing; electricity and water; construction and others.
1. Value Added Per Sector
18. Zimbabwe's value added mainly derives from agricultural, mining and manufacturing.
Approximately 60 per cent of manufacturing value added is either related to agro-industry or to the provision of inputs into agriculture.
ECA/MRAG/95/10/MR Page 9 19. Generally, the levels of value added are high for manufacturing concerns.
Improvements in the quality of products, such as quality of packaging and appearance, will help the products to capture a larger percentage of the export markets. Value added is given through net output, calculated from the gross output, including sales of goods not produced on the premises, less the total purchases and changes in stock. The resultant figure is indicative of the amount added to the input materials before selling. As shown in annex 4, the levels of value added can be further broken down to the 11 manufacturing subsectoral levels. This has been done only for the manufacturing industries in Harare.
20. Figure 1 shows the value added per employee for five countries. Singapore and Chile lead South Africa, however, Zimbabwe is ahead of Bangladesh. The significance of this is shown in annex 9 where the number of employees contributing to this value-added is smaller in Zimbabwe than in Bangladesh, possibly indicating that labour productivity in Zimbabwe might actually be high than that of Bangladesh.
ECA/MRAG/95/10/MR
Page 10 Figure 2
VALUE ADDED FOR SOME SELECT COUNTRIES
value added/employee
COUNTRY
BANGLADESH SINGAPORE
CHILE ZIMBABWE
SOUTH AFRICA
ECA/MRAG/95/10/MR Page 11 2. Number of people employed per sector
21. Zimbabwe's total labour force is about 4.5 million. Of this figure, approximately 27 per
cent (1.3 million) are employed in the formal sector and about 1.6 million (35 per cent) in theinformal sector. The balance of 1.7 million are accounted for through communal and small
scale farming. However since the 1992 drought and the jntroductipn of the ESAP throughto April 1994, it is estimated that over 20,000 employees have been retrenched. Most of the
retrenchments have occurred in the sectors of manufacturing, mining and agriculture.22. The agricultural sector is by far the biggest employer of labour, the average number
of workers in 1993 exceeding 300,000 labourers, closely followed by manufacturing(188,000), and construction (91,000). The employment trends during the first quarter of
1994 generally showed increases in the industrial sectors considered. Employment andearnings2 in the major productive sectors over the past few years is shown in tables 2 and
3. Manufacturing however, earned $Z3,016.8 million in 1993, way ahead of the othersectors. It is important to note that there has been increases in all sectors from 1990 to
1993, with the trend continuing into March of 1994, when the latest figures were available.The unions are slowly becoming more active, and wage negotiations in the last year have become more protracted. The percentage distribution of skilled workers in the manufacturing sector are shown in annex 5.
3. Profitability per sector
23. The impact of the drought of 1992 is still being felt in the industrial sector. Domestic demand declined drastically, in turn leading to further declines in industrial activity. The high inflation and interest rates have resulted in loss of profits by several firms. However, some companies have managed to maintain a substantial growth rate over this period. After-tax profit rates of over 30 per cent have been noted for some of the more prominent companies
in the country.
24. In the agricultural sector, tobacco has consistently made profits and earned the country handsome foreign exchange. Coffee and especially horticultural exports are also good performers. The mining sector has been experiencing a fair amount of growth and profitability in the past few years. There is a great deal of expansion and new investment in this area. This is particularly true of platinum. Longer range forecasts indicate that mineral prices will hold at a level that is relatively higher than in recent years, increasing the profit
margin.
4. Competition and ownership structure
25. Zimbabwe's main productive sectors have always had some competition locally. The level of competition has, in some areas, been stiff, resulting in companies that have diversified into a number of areas, and in other areas, has produced firms with sharply
2 Wage increases over the past few years have been small. Combined with the effects of inflation and the ESAP diminishing the value of the dollar, any increases that have occurred have been nominal.
ECA/MRAG/95/10/MR Page 12
defined target markets. However, some sectors have been particularly hard hit, e.g. clothing and textiles subsectors, where several firms have had to fold, under the pressure of imported goods and increasing costs of raw materials.
26. Two main forms of ownership are found in the agricultural sector; commercial farms and small holdings. The small holdings are mainly represented through private ownership and co-operatives. Mixed-ownership structures dominate the manufacturing and mining sectors.
The State continues to divest itself of a number of parastatals that it has controlled or had an interest in for a number of years.3
There are, however, a number of companies and organizations where government remains a fairly linent shareholder.
prominent shareholder.
Table2 Employeesbyindustrialsector(annualaverageinthousands) IndustrialSector Agriculture, fishingandforestry Miningand quarrying Manufacturing Electricity andwater Construction Others TOTAL
1990 290.0 51.4 197.1 8.7 75.8 569.2 1192.2
1991 304.2 50.9 205.4 8.9 81.0 757.3 1407.7
Year 1992 300.4 50.2 197.2 8.2 89.5 590.7 1236.2
1993 324.1 47.7 187.7 7.9 90.5 582.4 1240.3
1994 (toMarch) * 49.1 199.3 18.5 90.4 515.3 872.6 •figuresnotavailable
m O
i
30 2 CD CO30So
inen
c5
<oc5 °
UIDUJ0. Q<
3O X z
COUJUJO
UJ 800070006000500040003000^200010000 FIGURE3:EMPLOYEESPERINDUSTRIALSECTORANNUALAVERAGEINTHOUSANDS
OTHERMANUFACTURING
AGR..FORSTRY..FISH
19901991 KiVysrg-y^EZZ2S^^
1992
YEARS
CONSTRUCTIONMIN.,QUARRYINGELEC,WATER1993TOMCH'94CCIT)
5<CCE<oLU Table3Earnings($Zmillion)byindustrialsector
Industrialsector
Agriculture,forestry,fishing
Miningandquarrying
Manufacturing
Electricityandwater
Construction
Other
TOTAL Year
1990
636.4
383.8
1,882.9
117.1
399.4
5,352.7
8,772.3 1991
742.3
450.6
2,287.6
167.6
508.1
6,051.9
10,208.1 1992
618.5
553.0
2,658.1
132.5
602.1
6,977
11,541.2 1993
948.4
638.4
3,016.8
156.5
655.7
7,841.2
13,257 1994(toMarch)
*
169.3
839.3
69.5169.4
2,075
3,322.5
Source:#Duetodatacollectiondifficulties,theemployeesofsmallagriculturalunitsandsmallbusinessesintheruralareashavebeenexcluded.
•Figuresnotavailable.
ECA/MRAG/95/10/MR Page 16
C. Manufacturing sector
27. In the case of Zimbabwe's manufacturing sector, it is the second most diversified and dynamic in the Eastern and Southern African sub-region, the first position being held by South Africa. This diversification is a product of the manufacturing tradition that is in some cases over 60 years old. Like the other economies of Southern Africa, Zimbabwe has a relatively high degree of inward-orientedness with regard to production for exports. Only 11 per cent of manufacturing production is exported, including exports to the sub-region.
28. Zimbabwe's industrialization historically is inextricably linked to the country's natural resource endowment, particularly its mineral and agricultural resources. The broad basis of Zimbabwe's production structure is shown in table 1. Of the four sectors in the material sphere of production the manufacturing sector has averaged nearly 24 per cent of GDP from 1938 to 1994, far outstripping the next largest sector, agriculture (12 per cent! and over three times that of mining (7 per cent) electricity and water (3 per cent) and construction (1.4 per cent). Manufacturing comes second to agriculture in formal sector employment.
29. The agricultural sector provides a large percentage of the raw materials used in the manufacturing sector, such as cotton, foodstuffs, tobacco and livestock. Zimbabwe is also a "mineral abundant" resource country (see annex 4), with over 40 different minerals produced. Approximately 85 per cent of mineral production is derived from gold, asbestos, nickel, copper and chrome ores. In recent years there has been an upsurge in the exploration for minerals and a significant increase in the development in the value added areas of manufacturing and production. The mining sector on average contributes about 7 per cent of GDP.
30. Zimbabwe's resource-based manufacturing is illustrated by the analysis of the 11 sub- sectors in table 4. The metalworking industries have remained the most important resource- based sub-sector from 1955 to 1992. As shown in table 4, the figures for 1988 end 1992 included transport equipment which was excluded in earlier years. This notwithstanding, metalworking is still the leader in Zimbabwe's resource based-industries.4 In 1992 the metalworking subsector occupied the first position followed by food processing, textiles and clothing, and beverages, respectively.
31.Annex 5 shows some key characteristics of manufacturing industry by branch in 1982.
Again, metal and metal products showed relatively higher percentages of total manufacturing than the other subsectors.
32. However, though there was general expansion in most subsectors of the manufacturing sector during the 1980s to the early 1990s, most domestic products generally failed to meet the rising demand, thus contributing to shortages in the domestic market. For example, there were acute shortages in the case of non-metallic, mineral- based products, particularly cement and bricks. Shortages were also acute for the capital goods subsector, but for purposes of this study it should be noted that capital goods and consumer durables substantially depend on imported inputs.
4 Though the position of chemicals is high, the subsector is mainly based on imported raw materials and is therefore excluded from the analysis of those products transformed from local raw materials.
ECA/MRAG/95/10/MR Page 17
Table 4.
Industrial production 1955-92 (net output)
INDUSTRIAL PRODUCTS
1. Food
processing
2. Beverages
3. Tobacco
4. Textiles and clothing
5. Metalworking industries
6. Leather and Footwear
7. Wood
and furniture
I 8. Non-metallic II minerals.
It 9. Chemicals
10. Paper
[] and printing
11. Other
'| TOTAL
HOttS:
Pra-UDI 1966
$'000
6,406
3,208
4,512
6,010
10,462
-
4,916
6,000
2,670
3,216
1,084
62.724
1965
$'000
21,628
6,934
10,884
20,962
29,486
-
11,408
5,920
19,312
7,146
3,322
153,568 SSSSK=SSS=
Post-independence 1980
$'000
123,679
57,426
35,615
167,803
264,194
40,380
59,698
35,378
111,754
37,004
14,520
920,674
1983
$'000
272,394
220,641
111,605
224,616
406,393
68,171
50,892
69,532
174,439
98,158
21,637
1,644,087
1988 8'000
455,756
489,037
169,999
548,369
923,267
112,963
93,631
141,293
608,463
209,141
37,278
3,676,298
1992
$'000
1,720,030
1,093,492
477,235
1,095,754
2,890,900
223,875
228,130
453,074
1,064,775
538,529
99.348
9,835,052
1.Animal slaughtering is not included for 1995.
2.Statistics for knitting products, twins, rope and cordage were withheld.
3.Up to 1988 official statistics excluded transport equipment from metalworking induatries.
^ indu"""
Source: Central Statistics Office: Census of Industrial Production Various years up to 1992/93 Report.
-1988
ECA/MRAG/95/1O/MR Page 18
D. Location of industries
33. It is clear from both the first and second Industrial Development Decade Programmes for Africa and the Treaty establishing the African Economic Community that no strategy had been adopted for the rational location of industries to promote regional integration and the industrialization process in Africa. This apparent oversight would appear to be a result of two important factors:
(a) The complexities involved in formulating such a strategy due to the diversity cf national and subregional interests vis-a-vis industrialization; and
(b) The fact that most of the core or strategic industries in several African countries were started before the establishment of the African Economic Community.
34. In a very few cases such as Zimbabwe, South africa, Nigeria, Kenya and Cameroon that have diversified the location of their manufacturing sector, the majority of African countries have their industries located in one or two major cities. Even countries such as Egypt where manufacturing contributes highly to the GDP, have the industries located only in two major cities, Cairo and Alexandria. Most of the other countries have their industries located in the capital city, a decision which would appear to be more purely political than
economic.
35. The current poor performance of some African industries can directly be linked to the location of these industries. Given the poor physical infrastructure in most African countries, the natural materials are generally far from the capital cities that have traditionally harboured
most industries.
36. Table 5 shows the geographic concentration of manufacturing industries in Zimbabwe in 1977 and 1983. It can be seen that there is a rational distribution of location of industries in the seven principal areas of the country, and essentially influenced by prior resources mapping of the area including adequate infrastructure to facilitate the easy movement of the processed goods to where they are needed.
37. A profile of sample firms showing when they were established, number of employees, main product lines, ownership, and location is shown in Annex 6. It is clear from the Annex that the industrialization process started quite a long time ago in Zimbabwe and the major industries were located in two cities.
.G/95/10/MR ECA/M
EC
Page 19
Location
HARARE
BULAWAYO
MASVINGO
KADOMA
GWERU
REDCLIFF/
KWEKEWE
MUTARE
OTHER 43,539 129,169 60,377 45.789 18,444 299,184 655,228
117,817 3.2 9.4 4.4 3.3
1.38.6 4,962 8,320
11,668
8.3
Source:BasedonCensusofIndustrialProduction1983/84.CSO.Table10.
a/FiguresinthousandsofcurrentZdollars.
b/FiguresforKadomanotstrictlycomparablebecauseofchangeingeographicalreportingbyamajorcompany.
ECA/M RAG/95/10/MR Page 20
E. Policy framework
38. Historically, Zimbabwe's macro-economic policies and policy instruments have influenced the pace, structure and even location of industrial enterprises. Though decisions about technology take place at the level of the micro-units of all types of firms (multinational,
domestic, corporate and small-scale family firms in the private sector, public-sector enterprise, etc.), the GOZ had explicit policies that influenced the environment affectingappropriate technologies adopted by the firms.5 Government Development Plans during the 1980s proposed industrial restructuring in order to meet the changing of patterns of demand for industrial products, increasing employment through the adoption of labour-intensive technologies, and encourage geographic decentralization. On the whole, these policies did
not succeed in steering the appropriate technologies towards the small and medium-scale production units.39. Government intervened with demand-led policies, e.g. through application of
appropriate technologies in mining, energy, water development and construction sectors.Although the Plan targets were almost always not attained, they set out low-cost housing schemes that demanded the use of domestic materials. For example, as a follow-up to the Transitional National Development Plan (TNDP) 1982/1983-1984/1985, which had a target of 115,000 housing units, the First Five-Year National Development Plan (FFNDPJ, 1986-
1990, had the following objectives:
(a) Reduce costs of building materials and construction;
(b) Increase government participation in the housing and construction sector;
(c) Improve the quality of communal houses, resettlement, mining and commercial farming
areas; and
(d) Modernize equipment and expand production capacity in the sector.
40. Innovative financing programmes and technologies were put in place to reduce the
costs of houses to levels within the reach of the majority of the people. This was done through the Public Sector Investment Programme (PSIP) which allocated funds for theachievement of the Plan targets.6 The private sector was also compelled to participate in the
programme through a stipulated proportion of building society funds tied by law to financing low-cost housing schemes.F. Regional integration
41. Zimbabwe is a founding member of both the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) and has over the years showed commitment of purpose to regional integration at both the
5 For details see Daniel B. Ndela, "Macro-Policies for Apororoirate Technology in Zimbabwean Industry" in The Other Policy: The Influence of Policies on Technology Choice and Small Enterprise Development, Edited by Frances Stewart, Henk Thomas and Ton de Wilde, IT Publications in association with Appropriate Technology International, Washington, D.C., 1990, pp. 167-168.
6 Ibid, p. 171.
ECA/MRAG/95/10/MR Page 21 subregional and continental level. Zimbabwe is also a signatory of the Abuja Treaty of the Pan-African Economic Community.
42. Zimbabwe has taken a proactive posture in the promotion of investment and exports at the level of the State. In addition there are institutions for the promotion of exports and investment, credit and market-support policies. Indeed, Zimbabwe's Trade Promotion Organization (ZimTrade), Zimbabwe Investment Centre (ZIC) and several development banks promote exports, investment and credit disbursement to the enterprise sector. Discrepancies still exist especially in the availability and accessibility of investment and credit facilities to the small- and medium-scale enterprise.
43. In terms of the region, Zimbabwe's leading trading partner is South Africa, followed by SADC and PTA. In the regional context, in 1992, the country's exports to SADC, PTA and South Africa were 16.56 per cent, 13.38 per cent and 13.75 per cent respectively, compared with total regional exports of 32.49 per cent (annex 2A). The exports from Zimbabwe to the rest of the world amounted to 67.51 per cent. Figures for 1993 are only up to May, but the trend is still similar to that of 1992 (annex 2B). Imports from the subregion amounted to 28.08 per cent and 71.92 per cent from the rest of the world.
44. Tables 6 and 7 show the imports and exports respectively. It is clear that South Africa is an important trading partner of Zimbabwe. In 1992 for example, Zimbabwe exported manufactured goods worth $Z872.8 million to South Africa, while importing $Z2.736 billion from South Africa. The total import to export ratio in 1992 was slightly more than 50 per
cent.
45. The subregion's industrial structure, particularly as represented by the manufacturing sector, differs markedly from the economies of other African subregions in terms of status, strength, size and its importance. The opportunities offered by subregional integration in productive sectors are especially significant for South Africa and, to a certain extent, Zimbabwe owing to their relatively diversified productive base. Zimbabwe's manufacturing subsectors are generally profitable, and are well distributed in the categories of consumer goods, intermediate products and capital equipment.
46. The resolution of the constraints and future development strategy of regional integration and cooperation will evolve around a number of factors, more or less sensitive to policy changes, namely:
(a) Import substitution has tended to become increasingly capital intensive, while the level of imports to consumption has remained stubbornly high;
(b) The manufacturing sector remains characterized by low rates of employment growth and minimal increases in factor productivity;
(c) Lack of international competitiveness partly evidenced by a very small proportion of
manufacturing sector exports;
(d) Raising the level of value added of primary-product exports through further processing;
ECA/MRAG/95/10/MR Page 22
(e) Changing the predominantly inward-looking character of these countries' manufacturing sectors;
47. If the policy environment is right, positive spill-over effects can influence the subregion's manufacturing sector within the framework of regional economic integration. It can be argued that from the viewpoint of investors, (domestic or foreign), the beneficial effects of regional economic integration measures are manifold. First, import liberalization will make raw materials, intermediate goods and capital goods more easily available to increase capacity utilization in industry, will rebuild fixed-capital equipment and restructure industry by exposing it to competitive forces. The opening up of trade in consumer goods and intermediate goods, where domestic activity in the latter is significant, will also, together with the industrial restructuring, generate trade creation and trade diversion benefits that will both enhance consumer welfare and stimulate growth.
ECA/MRAG/95/10/MR Page 23 Table 6
Exports classified by principal country regions ($Z Thousand)
Region
PTA Region South Africa Rest of the World
TOTAL
Year 1989
492,507 289,781 2,050,079
2,832,367
1990 504,069 321,666 2,865,370
3,691,105
1991 523,169 478,531 3,376,171
4,377,871
1992 1,113,213
872,808 4,445,970
6,431,991
>urce:CSO
Table 7
Imports classified by principal regions ($Z Thousand)
Region
PTA Region South Africa Rest of the World
TOTAL
Year 1989
303,058 691,410 2,100,863
3,095,331
1990 243,933 902,074 3,464,510
4,610,517
1991 321,798 1,870,719 5,421,007
7,613,524
1992 336,459 2,736,966 8,200,586
11,274,011
Source: CSO
ECA/MRAG/95/10/MR Page 24
III. EXPERIENCE WITH POLICIES AND PRIORITIES FOR STRENGTHENING CAPACITIES FOR EXPLOITATION OF NATURAL RESOURCES
A. Origins of industrialization
48. The historical evolution of Zimbabwe's industrialization dates back to the 1930s when the colonial government decisively intervened for the expansion of overhead capital and the raw material base for the manufacturing sector. By the early 1940s, the Second World War- induced demand, the transport problems and general shortage of imported goods led to the development of manufacturing industries to meet domestic demand. The colonial State intervened to create a relatively sophisticated industrial base, ranging from the Electricity Supply Commission power stations, the Rhodesian Iron and Steel Commission foundries which laid the foundation of the then only integrated iron and steel plant in sub-Saharan Africa, and the Cotton Industry Board mills. These basic industries were all geared to supply basic consumer goods industries. This early import substitution included textiles, clothing, metalworking and food-processing industries.
49. The manufacturing sector's contribution to the Gross Domestic Product rose from 9 per cent in the late 1930s to around 15 per cent in the early 1950s, over 18 per cent in the
early 1960s to an average of around 24 per cent from the late 1980s to the 1990s.7 With
the formation of the Federation of Rhodesia and Nyasaland, the three countries which are today Malawi, Zambia and Zimbabwe became from a trade viewpoint a common market.
Much of the investment which took place to serve this expanded market was located in Southern Rhodesia. Firms established during this period catered for the domestic market and that of all the Central African countries forming the Federation. Significantly, over the period, manufactured output increased in textiles, clothing, footwear, foodstuffs, drinks, tobacco, metal and metal products and chemically based products. The Federal Government appointed a commission of industrial consultants to look into the possibilities of expanding the existing industries and the development of new manufacturing enterprises more suited to the Federal market.8 The commission made the following recommendations:
(a) The introduction or expansion of iron and steel works, a nitrogenous fertilizer plant, production of high quality ferro chrome, light and medium engineering products, and durable consumer goods;
(b) Selective tariff protection and increased technical training for the indigenous population to operate sophisticated industrial plant;
(c) To support productivity and improve international competitiveness, establishment of
Central Statistical Office (CSO): Census of Industrial Production: Mining. Manufacturing.
Construction. Electricity and Water Supply. (Harare), various years.
See Report by the Industrial and Process Engineering Consultants (Great Britain) in association with Alexander Gusls and Partners, The Development of Manufacturing Industry within the Federation of Rhodesia and Nvasaland. Presented to the Federal Assembly 1960, Salisbury:
Ministry of Economic Affairs, 1960 (cited from Makoni, T "The Rhodesian Economy in a Historical Perspective, Part II", in ZIMBABWE. Towards a New Order: An Economic and Social Survey. Working Papers. Volume II. United Nations, GE.80-150498, p. 47.
ECA/MRAG/95/10/MR Page 25 a national body to ensure a high standard for engineering and consumer goods;
(e) Encouragement of decentralization and location of light industries, zoning and town planning for orderly development.
/
B. The UDI Period
50. The breakdown of the Federation in 1963 was followed in 1965 by the Unilateral Declaration of Independence [UDI] by the minority white government. With the
implementation of trade sanctions by the international community, a new era of inward-
looking, import-substituting industrialization was embarked upon. The manufacturing sector's share in GDP rose from 17 per cent in 1965 at the start of the UDI and by the beginning of independence in 1980 it had risen to 24 per cent while the range of products had risen dramatically. However, during the same period, the ratio of manufactured exports to gross output fell significantly from 27 per cent to 15 per cent (in 1992 this ratio was about 20 per cent), while the sector's utilization of foreign currency for raw material and capital equipment imports rose sharply.51. It has been argued, therefore, that the international economic sanctions enabled the country to gear development strategy towards a raw-material transformative industrialization, which involved reallocation of resources among and within the economic sectors: industry, mining, agriculture and distribution. Measures taken during the UDI expanded the domestic market, resulting in a shift from export orientation towards the domestic market. The ensuing expanded economic activity could be attributed to the colonial regime's economic policies.
The regime formed and implemented the following policies and often harsh economic instruments:
(a) Emergency powers and control over taxation and expenditure decisions;
(b) Formation of bodies to determine and supervise sectoral priorities, e.g. the Industrial Projects Committee determined what new industries needed priority consideration and which individual industrialists were to be accorded the sole franchise for the production of a particular commodity or range of products;
(c) Direction of the economic structure utilizing budgetary capital expenditure programme (the present day Public Sector Investment Programme [PSIP], and direct involvement in production through statutory bodies, and the use of monetary and fiscal policy;
(d) The creation of the Industrial Development Corporation (IDC) to assist new and selected existing enterprises with long-term and gestation capital and managerial supervision;
(e) Through the Industrial Promotion Corporation of Central Africa (IPCORN), a joint venture of the Reserve Bank of Rhodesia, local and foreign investors provided medium capital and managerial advice to its clients;
(f) The agricultural and mining sectors were given a shot in the arm through the merging of the Agricultural Land Bank and the Agricultural Loan Fund into the Agricultural
ECA/MRAG/95/10/MR Page 26
Finance Corporation (AFC), and the Mining Loan Fund of the Mining Council which funded farmers and emerging mine entrepreneurs, respectively.
(g) The overall policy strategy of the regime as spelt out in its 1965 National Development
Plan was to ensure increased domestic savings to finance growth and redeem maturing debt obligations without retarding private enterprise capacity to expand.52. According to J.L. Sadie,9 the socio-economic policies of the UDI regime impacted
directly on indigenous technological capability through:(a) Encouragement of technological research and development;
(b) Encouragement of inflow of workers from Europe;
(c) Development of skills required by a growing economy;
(d) Transformation of the subsistence sector;
(e) Import substitution for economic growth as well as for saving foreign exchange earnings; and
(f) Encouragement of technical cooperation agreements with trading partners.
53. As shown from the extensive policy list, the importance of government policies culminated into an extensive set of controls to ration foreign exchange (forex) both for investment and recurrent expenditure. With the forex allocation reinforcing the tendency to monopolization of a small market, price controls were also established. The intention was to protect both producers, purchasing capital and intermediate goods as well as final consumers, where foodstuffs and especially cereals were the main category of products falling directly under price control. However, as was to be expected from the minority regime, a significant part of the consumer goods subsectors developed to serve an extremely narrow market with a surprisingly wide range of goods.
54. With a determined strategy firmed up in trust between the government of the day and the white industrialists, both parties sharing the determination to overcome the impact of international sanctions, the system of controls was made to operate effectively such that the highly protected system that they constituted did not lead to the gross inefficiency which has characterized other import substitution regimes. The need to adapt and innovate, and success in doing so, led to the development of wide range of technical skills, particularly in various branches of engineering. The commitment by government to industrialization was
amply demonstrated by the fact that gross fixed investment by the Government increased by 68 per cent in real terms between 1965 and 1970. In 1970 the Government contributed
9 Ibid, cited from J.L. Sadie, Report on the Planning for the Economic Development of Rhodesia. Rhodesia, 1997
ECA/MRAG/95/10/MR Page 27 40 per cent of the national gross fixed investment.10
C. The post-independence period
55. At independence, the new government maintained the panoply of controls over the economy, but now the apparent intention was that of using State intervention to redirect development to benefit the majority of the population. However, the absence of rapport with the private sector that had existed under the previous regime and the introduction of new controls on wages and labour relations, led to a situation where the bureaucracy had become a major obstacle to the running of economic enterprises.
56. The system of racial exclusion practiced by the previous government had resulted in few blacks owning productive enterprises. At Zimbabwe's independence in 1980, the productive forces of the economy, outside of the low productivity 'communal lands', were in the hands of the State (about 16 per cent), whites and to a lesser extent, Asians (about 28 per cent), or were owned by foreign interests (56 per cent), based predominantly in the
UK or South Africa.11 The new government removed racial restrictions, and set up
development finance institutions such as the Small Enterprise Development Corporation (SEDCO), the Zimbabwe Development Bank (ZDB), but failed to introduce a comprehensive programme to change the inequality of ownership.57. The actual outlook of the running of the economic enterprises contrasted sharply with the declared policies and objectives of the day. The Transitional National Development Plan (TNDP) 1982/1983-1984/1985, Zimbabwe's first three-year transitional plan period, the Government undertook to increase the labour-absorption capacity of industry and to rationalize and transform the industrial sector by reorienting it towards external markets. The objectives outlined in the TNDP were the following:
(a) To expand and restructure the sector to enable it to meet the growing and changing patterns of demand for industrial products;
(b) To promote further linkages with other sectors such as agriculture, mining and the
informal sector;
(c) To increase the export capacity and potential of the sector;
(d) To increase employment through the utilization (where appropriate) of labour-intensive techniques;
10 See D.B. Ndlela, Technology Imports and Indigenous Technological Capacity Building: The Zimbabwean case. Technology and Employment Programme, World Employment Programme Research, Working Papers, International Labour Organization, WEP 2-22/WP 173,
March 1977, p. 5
11 Zimconsult, Support to Small-Scale Industries and the Enhancement of Indigenous Ownership in Zimbabwe, Report prepared for UNIDO, Vienna, October, 1992 p. 11
ECA/M RAG/95/ 10/MR Page 28
(e) To encourage further import substitution where economically justified (as in energy and fertilizer production);
(f) To encourage and promote the training, development and upgrading of the Zimbabwean labour force at all levels including managerial, technical and skilled;
(g) To encourage geographical decentralization of industries;
(h) To encourage more participation, ownership and control of industries the Zimbabweans and the State; and
(i) To encourage and promote the establishment of small- and medium-scale agro-
industrial enterprises in rural areas.12
58. Zimbabwe's post-independence development strategies/macro-economic policies and attempts to establish institutions that would facilitate local, private and State participation In the industrial sector evolved around the policies enunciated in the above. The Government established and/or reinforced existing institutions which were meant to strengthen industrial capacity and particularly those engaged in the use of local raw-material resources. The tasks of transforming the industrial raw materials into final products were inter alia, assigned to the following institutions: the Zimbabwe Iron and Steel Company (ZISCO), the Industrial Development Corporation (IDC), and the economic ministries (the Ministry of Industry and
Commerce, the Ministry of Finance, and the National Economic Planning Commission."
'1359. The policies and institutional framework outlined above were meant to influence directly the development of infrastructure, human resources, transformation of natural resources into processed and final products, technological innovations and upgrading and domestic and foreign investment. In addition, in the 1980s the government introduced new incentives for exporters. The Export Incentive Scheme, where exporters were paid 9 per cent of fob value of exports (in Zimbabwe currency), was introduced in the early 1980s. This was followed in 1983 by the Export Revolving Fund (ERF), which allowed exporters to have access in advance to forex needed to purchase the imported inputs required to manufacture goods for specific export orders (the ERF was scrapped in 1993 but had been targeted at the manufacturing sector; the Export Promotion Programme (EPP), introduced subsequently, catered for the mining and agricultural sectors. The Industrial Bonus Scheme allowed for a supplementary foreign currency allocation to be made on the basis of incremental exports achieved.
12 For details on the structural features of the macro-economic policy framework of the post-independence period, see D.B. Ndlela,
(1990), op. cit.
13 The designations of the ministries have changed over time but the functions have remained more or less the same. For example, the earlier separate Ministries of Industry and Technology and Trade and Commerce have now merged into one and Planning has been hived off from Finance and has become the National Economic Planning Commission.
