From: barnhart@ddsw1.MCS.COM (Mr. Aaron Barnhart)
Subject: IPS:ZIMBABWE: DROUGHT STILL THREATENS TO DRY UP INDUSTRIAL HEART
Date: Mon, 25 Jan 1993 13:41:21 GMT
Organization: Evanston, Illinois, U.S.A.

Copyright Inter Press Service 1993, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Area: Opecna Morning Transmission
Reference: Science & Industry; Agriculture
Title: ZIMBABWE: DROUGHT STILL THREATENS TO DRY UP INDUSTRIAL HEART


an inter press service feature

by gumisai mutume

bulawayo, jan 18 (ips) -- the wheels of industry may not run on
water but the lack of it here threatens to shut down zimbabwe's
manufacturing core.

the nerve centre of zimbabwe's industrial sector, the city of
bulawayo was hardest hit last year by the worst drought in
living memory and by an economic recession, which have caused
factories to consider relocating.

''i know of a textile factory that has moved its dyeing
section to hwange (near the zambezi river)'', says eugene
matikiti, vice-president of the bulawayo branch of the
confederation of zimbabwe industries (czi).

''however, the onset of the rains has put a damper on the
idea. we have not had any new investment coming into the city due
to the water situation''.

just before the onset of the rains in november, bulawayo,
situated in drought-prone matebeleland (in western zimbabwe) --
some 500 west of the capital -- at one time had four weeks of
water supply in it's five supply dams.

an ongoing citizens' campaign for a reliable water source has
still to obtain state approval. with the start of the rains, the
government has urged the city to lift its tight water rationing
schedules.

''for industry we are getting an allocation of 60,000 cubic
metres a day, far short of the 250,000 cubic metres we
require'', says matikiti. ''infact they want us to go down to
40,000''.

matikiti, who also manages a production company here, says
his firm -- like many others -- has suffered from penalties
imposed by the city for exceeding the ration limits. the company
lost 25,000 u.s. dollars in production last month due to the
water rationing.

it may be too early to assess the effects of the drought on
zimbabwe's industry and commerce. but industrialists here say
1992 was one of the most difficult years.

richard kriel, president of the matebeleland branch of the
zimbabwe national chamber of commerce, says the ever-increasing
cost of electricity, the drought, the credit squeeze and high
levels of inflation have combined to give the business sector a
nightmare. (more/ips)


zimbabwe: industry (2)

''the problem with relocation'', says kriel, ''is that there
is no nearby place with abundant water to set up new factories.
so companies here ended up drilling boreholes''.

experts attribute the current high interest rates to a poor
economic performance by the country in the current fiscal year
(ending in june).

the shortage of money on the market and runaway inflation has
caused the government of president robert mugabe to adopt
restrictive monetary policies under the world bank and
international monetary fund-induced to economic structural
adjustment (sap).

in an end of year statement, finance minister bernard
chidzero said inflation was now down to 25 percent from 59
percent in june.

''the slowdown in money supply growth and inflation, if
sustainable as is our aim, should see interest rates softening
to levels supportive of investment'', said chidzero.

chidzero said inflation had soared due to high private sector
borrowing and higher government expenditure brought about by the
financing of drought relief food.

the lack of a disposable income by the average zimbabwean
means people are now only buying the bare essentials like food,
leaving out furniture and clothing as luxuries.

the private engineering company, hubert davies, says it is
losing up to 200,000 u.s. dollars a year due to the tight
monetary situation.

a company spokesperson told ips because of a slump in demand,
the firm has had to stop local assembly of british ''erf''
trucks, laying off 245 workers.

small-scale businesspersons who are mainly retailers,
represented by the indigenous business development centre
(ibdc), say their plans to expand into manufacturing have been
hindered by the harsh economic climate.

''a lot of us had geared to expand our manufacturing base
when the credit squeeze came in'', says matebeleland ibdc
president zenzo nsimbi.

''about 60 percent of the stands that had started going up
have not moved since then'', nsimbi told ips.

the rains have brought hope for some recovery. ''but 1993
will still be a tough year'', says kriel. ''we are not yet over
the hump. it will be a long struggle for industry and commerce
to recover from the past 12 months''. (end/ips/gm/apc/93)
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