Zimbabwe - Overseas Development Institute

WORKING PAPER 25
INDUSTRIALISATION IN SUB-SAHARAN
AFRICA
COUNTRY CASE STUDY -
ZIMBABWE
by
ROGER
RIDDELL
ISBN 0 85003 113 3
OVERSEAS DEVELOPMENT INSTITUTE
Regent's College
Inner C i r c l e , Regent's Park
LONDON, NWl 4NS

Preface
Since e a r l y 1987, the Overseas Development I n s t i t u t e has been
engaged on a major piece of research under the general t i t l e :
' I n d u s t r i a l i s a t i o n m sub-Saharan A f r i c a ' , i n v o l v i n g in-depth
case studies of seven A f r i c a n countries: Botswana, Cameroon, Cote
d ' l v o i r e , Kenya, N i g e r i a , Zambia and Zimbabwe. The case study
work f a l l s i n t o two d i s t i n c t parts. F i r s t an a n a l y s i s of the
i n d u s t r i a l i s a t i o n process from the e a r l y 1960s to the mid-1990s,
followed by d i s c u s s i o n of the options f o r and p o s s i b i l i t i e s of
accelerated i n d u s t r i a l i s a t i o n i n the l a t e 1980s and 1990s.
This Working Paper presents the f i r s t phase of the research for
Zimbabwe. Working Papers 24 and 26 present the f i r s t phase of the
research f o r Cameroon and Zambia. I t i s a l s o a n t i c i p a t e d that
the research work on N i g e r i a w i l l be produced as an ODI Working
Paper. The f i r s t phase a n a l y s i s f o r Kenya and Botswana are being
reproduced as Discussion Papers of the I n s t i t u t e of Development
Studies at the U n i v e r s i t y of Sussex from, where they can be
obtained.
I t i s a n t i c i p a t e d that the completed country studies incorporat
i n g both phases of the research work w i l l be published together
as a book towards the end of 1989.
Any further information on these Working Papers or the o v e r a l l
research p r o j e c t should be addressed to Mr Roger R i d d e l l at the
ODI .
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TABLE OF CONTENTS
Page
I. INTRODUCTION 1
I I . OVERVIEW OF THE MANUFACTURING SECTOR 2
2.1 Current Status 2
2.2 S t r u c t u r a l Change and Long-Term Expansion 4
2.3 Sources of I n d u s t r i a l Growth 8
2.4 Trends i n Imports and Exports 14
2.5 I n t e r n a t i o n a l Comparisons of Competitiveness 23
2.6 Trends i n Value Added 28
2.7 Seeking Preliminary Explanations 30
I I I . SUCCESSES AND FAILURES AT THE MICRO-LEVEL 35
3.1 Manufacturers of A g r i c u l t u r a l Implements 35
3.2 Inadequacies of P r i c e s As a Basis f o r P o l i c y
Implementation 39
3.3 Some Concluding Observations 42
IV. THE FOODSTUFFS SUB-SECTOR 4 5
4.1 General Overview: Sources of Growth, Trade and 45
Output Trends
4.2 Some Firm-Level Evidence 52
V. AGRO-INDUSTRIAL LINKAGES 58
5.1 Macro-Trends 58
5.2 A g r i c u l t u r a l Inputs i n t o Manufacturing 61
5.3 Manufacturing Inputs i n t o A g r i c u l t u r e 63
VI. CONCLUSIONS 70
6.1 Some Missing Elements 70
6.2 Towards I n d u s t r i a l i s a t i o n i n t o The 1990s 72
NOTES 7 5
REFERENCES 112

TABLES
LIST OF TABLES AMD DIAGRAMS
Page
1. C h a r a c t e r i s t i c s of Manufacturing by Sub-Sector, 1982/83. 3
2. O r i g i n of Growth i n Gross Output by Sub-sector: 1952/53- 9
82/83; 1952/53-54/65; 1964/65-78/79; 1978/78-82/83.
3. "Sources" of Growth i n Manufacturing Output by Sub-Sector, 13
1952/53 to 1982/83 and 1952/53 to 1964/65.
4. "Sources" of Growth m Manufacturing Output by Sub-Sector, 14
1964/65 to 1978/79 and 1978/79 to 1982/83.
5. Ratio of Manufactured Exports to Gross Output by Sub- 17
Sector,1952/53 to 1982/83.
6. Sub-sectoral Change i n Manufactured Exports, 1980/81 to 19
1986/87, $ mn.
7. Purchases by The Manufacturing Sector by Imported and 21
Domestic O r i g i n .
8. S e l f - S u f f i c i e n c y Index of Exports over Im.ports by 23
I n d u s t r i a l Sub-Sector, 1952/53 to 1982/83.
9. I n t e r n a t i o n a l Competitiveness of Manufacturing Industry, 25
DRC C a l c u l a t i o n s , 1982 and 1986.
10. Manufactured Exports By Area of D e s t i n a t i o n , 1980, 1984
and 1986, $ mn. 26
11. Manufactured Exports By I n d u s t r i a l Sub-Sector and
D e s t i n a t i o n , 1980, 1984 and 1986, $mn. 27
12. Factors Constraining I n d u s t r i a l Expansion i n Zimbabwe, 33
1981-87.
13. Comparative Advantage I n d i c a t o r s f o r Foodstuffs 50
Sub-Sector 1982 data.
14. A g r i c u l t u r a l Output and Manufacturing Inputs, 1965, 1975 63
and 1981/82.
15. The Supply of M a t e r i a l Inputs To The A g r i c u l t u r a l Sector. 64
16. Purchase of M a t e r i a l Inputs By The A g r i c u l t u r a l Sector, 65
1984.
17. Competitive Measures For Zimbabwe's F e r t i l i z e r Industry. 67
18. Inputs i n t o Manufacturing Obtained From Within The Manuf- 71
a c t u r i n g Sector, 1975 and 1981/82.

FIGURES
1. Ratio of Manufacturing Value Added to Gross Domestic 5
Product 1955 to 1983.
2. Manufactured Value Added at Fixed (1980) P r i c e s , 1948 5
to 1983.
3. Manufacturing Volume Index, 1964-87. 6
4. Sources of Growth of the Gross Output of the Manufacturing
Sector by I n d u s t r i a l Sub-sector, 1952/53 to 1982/83. 11
5. Sources of Growth, 1952/53 to 1982/83, A l l Manufacturing. 12
6. Manufacturing To T o t a l Commodity Exports, 1939 to 1983. 15
7. Ratio of Exports To Gross Output, T o t a l Manufacturing, 16
1952/53 to 1982/83.
8. Sub-Sectoral C o n t r i b u t i o n To Total Manufacturing Exports, 16
1952/53 to 1982/83.
9. Manufactured Exports, 1980 to 1986, $ mn. 18
10. S e l f - s u f f i c i e n c y Index, Manufacturing Industry, 1952/53 22
to 1982/83.
11. Manufacturing Value Added Per Employee at Fixed (Gross 28
N a t i o n a l Income) P r i c e s , A l l Sub-Sectors.
12. Ratio of Manufactured Valued Added To Gross Output, A l l 29
Sub-Sectors.
13. Index of I n d u s t r i a l Production, Foodstuffs Sub-Sector, 46
1964 to 1986.
14. Sources of Growth, Foodstuffs Sub-Sector,
1952/53 to 1982/83. 46
15. Ratio of Manufactured Value Added For The Foodstuffs
Sub-Sector To Manufactured Value Added For The
Manufacturing Sector as A Whole, 1938 to 1982. 47
16. Food Exports as A Proportion of T o t a l Manufacturing 48
Exports.
17. External Manufactured Trade i n Foodstuffs i n R e l a t i o n
to Gross Output of The Foodstuffs Sub-Sector, 1938/39
to 1982/83. 49
18. Index of Food Production, 1967 to 1982 at Fixed (1980
and GNI) P r i c e s : Meat Products, F r u i t and Vegetable
Processing and Grain and Animal Feeds. 51
19. The Percentage C o n t r i b u t i o n of A g r i c u l t u r e and

I. INTRODUCTION
Zimbabwe's manufacturing sector has expanded over a time
span of more than 60 years to become, i n the l a t e 1980s, one of
the most advanced and d i v e r s i f i e d i n Sub-Saharan A f r i c a ( S S A ) .
Indeed the s o p h i s t i c a t i o n of the Zimbabwean economy and the
p i v o t a l place occupied by i t s manufacturing i n d u s t r y have l e d to
the suggestion that, with favourable domestic p o l i c i e s and a
supportive external environment, Zimbabwe could (perhaps with
South A f r i c a ) be the f i r s t country i n SSA to j o i n the ran)cs of
the handful of N e w l y - I n d u s t r i a l i s i n g Countries (NICs), c u r r e n t l y
confined to Asia and L a t i n America.
Impressive though the expansion of Zimbabwe's manufacturing
base might have been down to the present day, a growing consensus
i s emerging from w i t h i n the country and among e x t e r n a l advisors
that far-reaching changes are needed i f the sector i s to continue
on i t s h i s t o r i c a l path of expansion and to play a greater r o l e i n
generating jobs and f o r e i g n exchange f o r the t o t a l economy'.
While success i n achieving dynamic and expansive s t r u c t u r a l
change w i l l obviously depend upon the choice and consistency of
the o b j e c t i v e s chosen as w e l l as a range of b e n e f i c i a l or, at
worst, n e u t r a l external f a c t o r s - such as the nature of Zimbabwe's
r e l a t i o n s h i p with South A f r i c a and more g e n e r a l l y the
future course of world trade - i t w i l l also be dependent fundamentally
on an accurate a n a l y s i s of past and contemporary
i n d u s t r i a l i s a t i o n . I t i s c l e a r l y c r u c i a l , f o r instance, to know
the reasons f o r past i n d u s t r i a l expansion, innovation and
s t r u c t u r a l change, most p a r t i c u l a r l y to judge the e f f e c t i v e n e s s
and importance of d i f f e r e n t p o l i c i e s adopted v i s - a - v i s other
causes of change. One cannot, for instance, achieve the desired
o b j e c t i v e of more r a p i d i n d u s t r i a l expansion by concentrating
e x c l u s i v e l y or predominantly upon domestic p r i c e i n c e n t i v e s , i n
the hope of eventually s o l v i n g the problem of f o r e i g n exchange
shortages, i f current f o r e i g n exchange shortage i s a f a r more
important c o n s t r a i n t to such expansion and t h i s remains unaddressed.
S i m i l a r l y , one cannot expect export expansion to take
place by supplying much-needed f o r e i g n exchange to purchase
inputs i f equally c r i t i c a l c o n s t r a i n t s turn out to be market
ignorance, lack of management s k i l l s , high transport costs and
inadequate plant maintenance and technology.
I t i s the h i g h l i g h t i n g of these f a c t o r s which provides the
context f o r the present paper on Zimbabwe's manufacturing
industry. There i s no paucity e i t h e r of basic raw data on the
recent performance of the sector^ or of normative p o l i c y p r e s c r i ­
ptions proposing a l t e r n a t i v e ( a l b e i t d i f f e r e n t ) s t r a t e g i e s for
the future'. The former, however, tend predominantly to be
d e s c r i p t i v e and therefore to throw l i m i t e d l i g h t on p o l i c y
issues, while many of the p o l i c y proposals themselves, as a
r e s u l t , tend to be based more on a p r i o r i assumptions to achieve
what are seen as d e s i r a b l e o b j e c t i v e s than to be rooted i n the
evidence of Zimbabwe's economy i n general or of the p r a c t i c a l
workings of i t s manufacturing sector i n p a r t i c u l a r . In contrast,
the o b j e c t i v e here i s to attempt to e x p l a i n both why and how

manufacturing i n d u s t r y developed i n Zimbabwe down to the present
time (devoting as l i t t l e space as p o s s i b l e to simple d e s c r i p t i o n )
and to i s o l a t e and evaluate the importance of the d i f f e r e n t
c o n s t r a i n t s , o p p o r t u n i t i e s , p o l i c i e s and p r a c t i c e s which the
sector faces. This a n a l y s i s should provide a c r u c i a l ingredient
to the second case-study paper on Zimbabwe which w i l l o u t l i n e the
room for manoeuvre f o r the manufacturing sector i n the years
ahead.
The r e s t of the paper w i l l be d i v i d e d i n t o f i v e parts. Part
I I gives an overview of the manufacturing sector which w i l l
provide the general frameworli f o r more s p e c i f i c a n a l y s i s i n the
f o l l o w i n g three p a r t s . F i r s t , the f a c t o r s i n present-day
Zimbabwe that determine success and f a i l u r e between d i f f e r e n t
i n d u s t r i a l firms w i l l be analysed; second, the f o o d s t u f f s subsector
w i l l be examined and, f i n a l l y , the l i n k s between the
manufacturing and a g r i c u l t u r a l sectors w i l l be analysed". The
f i f t h part w i l l b r i e f l y draw the various threads of the d i s c u s ­
sion together to form an o v e r a l l assessment of the e v o l u t i o n and
present status of Zimbabwe's manufacturing sector.
I I . OVERVIEW OF THE MANUFACTURING SECTOR
2.1 Current Status
Although the o r i g i n s of manufacturing i n present-day
Zimbabwe can be traced back to the e a r l y years of t h i s century,
i t was i n the 1930s that both a s i g n i f i c a n t manufacturing sector
could be i d e n t i f i e d and sub-sectoral d i v e r s i f i c a t i o n became
important. In 1938, when the f i r s t i n d u s t r i a l census was taken,
not only had the i r o n and s t e e l foundries and m i l l s been b u i l t
and the Rhodesian Iron and S t e e l Corporation e s t a b l i s h e d ' , but
the country was exporting goods manufactured i n each of the
I n t e r n a t i o n a l Standard I n d u s t r i a l C l a s s i f i c a t i o n (ISIC) subsectors^.
By t h i s time - 50 years ago - Zimbabwe's' manufacturing
sector was already responsible f o r 10% of Gross Domestic Product-
(GDP), i t employed 7% of the formal sector labour force and
accounted f o r 8% of t o t a l export earnings. To put t h i s i n t o a
contemporary perspective, the most recent data f o r Sub-Saharan
A f r i c a shows that by 1984 i n at l e a s t 70% of c o u n t r i e s , the r a t i o
of Manufactured Value Added (MVA) to GDP was l e s s than 10%, i n
over 56% of countries manufactured exports accounted f o r l e s s
than 10% of t o t a l n a t i o n a l exports and i n over 40% of countries
fewer than 10% of employees were working i n the manufacturing
sector^. What these comparisons h i g h l i g h t i s that an assessm.ent
of Zimbabwe's contemporary i n d u s t r i a l status needs to be placed
f i r m l y w i t h i n the context of an extremely long h i s t o r y .
The current status of Zimbabwe's manufacturing sector and
i t s importance to the o v e r a l l economy can be seen from the

f o l l o w i n g summary data. By 1985/86 the manufacturing sector was
responsible f o r j u s t over 25% of GDP, with net output valued at
over $2.5 b i l l i o n ^ (US$1.5 b i l l i o n ) . I t was the second l a r g e s t
modern employment sector, employing some 160,000 people, 16% of
the formal sector labour force. In 1985, the exports of manufactured
products t o t a l l e d $726 m i l l i o n (USS450 m i l l i o n ) , almost 50%
of domestic exports, f a l l i n g , however, to $392 m i l l i o n (US$245
m i l l i o n ) , 25 % of the t o t a l , i f exports of cotton l i n t and f e r r o ­
a l l o y s are excluded'". Over the two year period, 1983-84, 18% of
t o t a l gross f i x e d investment o r i g i n a t e d i n the manufacturing
sector, valued at $215 m i l l i o n f o r each year.
The manufacturing sector i t s e l f c o n s i s t s of some 1,260
separate u n i t s producing probably over 7,000 d i f f e r e n t products.
F i f t y percent of a l l manufacturing talces place i n the c a p i t a l ,
Harare, with almost h a l f of the remainder of production s i t u a t e d
i n the second l a r g e s t c i t y , Bulawayo. Table 1 provides recent
comprehensive data on the sub-sectoral breakdown of the sector.
Although the importance of each sub-sector v a r i e s to some extent
i n terms of d i f f e r e n t c h a r a c t e r i s t i c s , the o v e r a l l dominance of
Table 1
C h a r a c t e r i s t i c s of Manufacturing by Sub-Sectcr. 1982/93 •
Sub-*' Percentage Contribution
s e c t o r a l Number Gross Value Number C a p i t a l Exports Exports
Dvision of Output Added of Stock Broad Narrow
Units Employees Defn.+ Defn.+
(1) (2) (3) (4) (5) (5) (7) (B)
1 11 26 16 16 15 10 19
2 4 10 7 8 9 1 2
3 5 9 S 12 10 22 7
4 11 5 8 12 3 3 5
5 7 3 3 7 2 3 5
6 8 5 6 E 5 1 2
7 9 13 12 8 14 5 9
8 4 3 4 4 7 2 3
9 30 20 21 23 32 48 37
10 3 4 4 3 2 1 2
11 7 1 1 1 2 1 4 8
T c t a l ' 3 ,257 3,293.8 1,166.2 172.3 3,756.3 333 . 9 174.6
;Actua1s)
Notes: * u n i t s for Actuals: Column (2), u n i t s ; (3), $mns; (4), $mns;
(5), OOOs; (6), $mns; (7) $mns; (8), $nins.
+ Broad d e f i n i t i o n includes exports of cotton l i n t & f e r r o - a l l o y s
The Sub-sectoral c l a s s i f i c a t i o n i s l i s t e d in Note 5.
Scurce: Census of Production, 1982/83 and 1983/84; Statement of
External Trade, 1982 and 1983 and UNI DO( (1986b:64).

sub-sector (9), Metals and Metal Products, i s c l e a r . A d d i t i o n ­
a l l y , Table 1 i n d i c a t e s that over 50% of a l l manufacturing gross
output, value added, employment, c a p i t a l stock and exports
o r i g i n a t e s i n j u s t three sub-sectors: Foodstuffs (1), Chemicals
(7) and Metal Products { 9 ) 1 ' .
Revealing the current c o n t r i b u t i o n of manufacturing to the
wider economy and examining i t s major sub-sectoral c h a r a c t e r i s ­
t i c s remain only of l i m i t e d use to p o l i c y debates because they
e x p l a i n l i t t l e of the e v o l u t i o n of the sector, i t s l i n k s with the
r e s t of the economy and i t s present strengths and weaknesses. A
s t a r t to a b e t t e r understanding of these issues can be gleaned
from examining the o v e r a l l performance of the sector over time.
2.2 S t r u c t u r a l Change and Long-term Expansion
In p l a c i n g the e v o l u t i o n of Zimbabwe's manufacturing sector
i n h i s t o r i c a l perspective, the most important f a c t o r to record i s
that s u b s t a n t i a l and almost uninterrupted expansion of Zimbabwe's
manufacturing sector has taken place i n the 50 years since
1 9 3 8 1 2 .
Not only has r a p i d manufacturing expansion been achieved
but the sector has played an i n c r e a s i n g l y important r o l e i n the
o v e r a l l economy. In r e a l terms, manufactured value added (MVA)
doubled i n the s i x year period 1938 to 1944, doubled again i n the
four years to 1948 and doubled yet again i n the seven year period
to 1955. By t h i s time the MVA/GDP r a t i o had r i s e n to 15%, up
from the 10% l e v e l achieved i n 1938 (the year when r e l i a b l e data
was f i r s t c o l l e c t e d ) . Figures 1, 2 and 3 show the steady expansion
achieved over the past 35 to 40 years, with the exception
of a short period i n the mid to l a t e 1970s when both r e a l MVA and
the MVA/GDP r a t i o f e l l and, more r e c e n t l y i n the period 1982-84
when the volume of production contracted. The most marked
expansion - i n terms of both r e a l increases i n value added and i n
the c o n t r i b u t i o n of MVA to GDP - occurred during the f i r s t f u l l
nine years of the U n i l a t e r a l D e c l a r a t i o n of Independence (UDI)
period (1966 to 1975) and the f i r s t few years of the Independence
period.
Not s u r p r i s i n g l y , manufacturing expansion has been p a r a l ­
l e l e d by a steady increase i n employment i n the sector. T o t a l
manufacturing employment, which stood at 17,500 i n 1938, doubled
to 35,000 by 1946 and doubled again to 70,000 by 1953. Therea
f t e r i t rose p r o g r e s s i v e l y to reach some 170,000 by the mid-
1980s, with the most r a p i d expansion o c c u r r i n g i n the ten year
period to 1974-75. As a proportion of t o t a l formal sector
employment, manufacturing employment stood at 12% i n 1954/55 but
f e l l to 10.5%'by 1964/65; i t then rose s t e a d i l y to reach 16% of
t o t a l formal sector employment by the mid-1980s.

Figure 1. Ratio of Manutacturing Value Added to GDP.
1953 to 1983.
14 -
13 -
12 -
I 1 -
10 -|—i 1—I—I—I 1—I 1—I 1—[ 1—; 1—I 1—I 1—I 1—i—1 1—1 I I \
55 56 57 66 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 B3
Figure 2. Manufactured Value Added at Fixed (1980) Prices,1948-83.
900 -1 • — a
48495051525354 55565768596061 6263646566676869707172 737475 76777879 8081 82 83
Time
period in Ycorr
S:-rce for Figures 1&2: Zimbabwe, National Income and Expenditure Report
The Census of Production, 1962,1967,1979/80,1983/84,CSO, Harare and
Xriri^lv Digest of Statistics, various years

Figure 3. Manufacturing Volume Index, 1964 to 1987.
120 •
I
I
s
- 1 — I — I — I — I — I — I — 1 — I — 1 — r — I — I — 1 — I — r
64 65 66 67 68 69 70 71 72 73 74 75 76 77 7 S 7 9 8 D 8 1 62 83 84 85 86 87
Source: Digest of Statistics (Monthly and Quarterly) various years.
Note: 1987 figures based on author's estimate based on January-
August data and forecasts by the CZI and the Standard Chartered Bank of
Zimbabwe.
The s t r u c t u r e and ownership of Zimbabwe's manufacturing
sector has an important bearing upon both i t s o r i g i n s and i t s
e v o l u t i o n and thus needs to be h i g h l i g h t e d here. Although
Zimbabwe i s an A f r i c a n country, neither d e c i s i o n s r e l a t e d to the
establishment of the country's manufacturing base nor to i t s
expansion owe very much to the indigenous black people of the
country. Manufacturing has always been l a r g e l y owned, managed
and operated by s k i l l e d personnel from e i t h e r the s e t t l e r white
community or else owned by f o r e i g n c a p i t a l i n t e r e s t s which made
use of these s e t t l e r s k i l l s . The l o c a l black population was used
predominantly as u n s k i l l e d labour i n manufacturing up to the
1950s. Thereafter some openings were made f o r blacks to acquire
s k i l l s , although these s k i l l s were s c a r c e l y r e f l e c t e d i n wage
l e v e l s , status or a b i l i t y to achieve unimpeded upward job mobili
t y u n t i l Independence'3. The 1981 National Manpower Survey
recorded that w i t h i n the manufacturing sector, of a l l
P r o f e s s i o n a l Technical and Related personnel i n employment, only
36% were black, and of a l l Managerial and A d m i n i s t r a t i v e personn
e l , only 24% were black. As the proportion of black personnel
i n the e n t i r e economy was 49% and 21% r e s p e c t i v e l y , i t i s apparent
that d i s c r i m i n a t i o n i n senior posts was higher f o r manu-

f a c t u r i n g (GOZ 1983). The d i s p r o p o r t i o n a t e access of black
Zimbabweans to these senior posts i s d r a m a t i c a l l y seen when one
compares these f i g u r e s with the respective population d i s t r i b u ­
t i o n : i n the e a r l y 1980s l e s s than 3% of Zimbabwe's t o t a l populat
i o n was white, over 96% was black.
For decades, black entrepreneurs were i n p r a c t i c e barred
from e s t a b l i s h i n g manufacturing enterprises outside the informal
sector and because of both r a c i a l r e s i d e n t i a l d i s c r i m i n a t i o n and
harsh laws r e s t r i c t i n g the movement of blacks i n urban areas, the
small-scale informal manufacturing sector i n Zimbabwe has been
f a r l e s s developed than i n many other A f r i c a n countries. Addit
i o n a l i n d i r e c t b a r r i e r s operated i n the f a c t that some o u t l e t s
for black entrepreneurs were provided i n the f i e l d s of commerceoperating
buses, running stores and providing goods t r a n s p o r t -
and as s u b s t a n t i a l p r o f i t s ( a l b e i t only for a few) could be
earned i n these businesses, they tended to a t t r a c t the more
s u c c e s s f u l black entrepreneurs. The f a c t that black businessmen
were able to finance the purchase of f l e e t s of buses and the
c o n s t r u c t i o n of s u b s t a n t i a l r e t a i l o u t l e t s during the c o l o n i a l
period i n d i c a t e s that i t was not the shortage of c a p i t a l which
provided an insuperable b a r r i e r to the establishment of black
manufacturing e n t e r p r i s e s . The e f f e c t of these d i f f e r e n t i n ­
fluences was that by Independence s c a r c e l y a dozen black entrepreneurs
ran t h e i r own o f f i c i a l l y - r e c o g n i s e d manufacturing
e n t e r p r i s e s out of a t o t a l of 1,300 manufacturing units''' . Since
the removal of overt r a c i a l d i s c r i m i n a t i o n and a l l r a c i a l laws i n
1979/80, scores of Zimbabwean blacks have been promoted to senior
posts and shown themselves w e l l able to compete with t h e i r white
compatriots. At the most senior l e v e l t h i s i s shown c l e a r l y by
the manner i n which many have advanced to top executive p o s i t i o n s
i n the country's leading companies and corporations''.
O f f i c i a l s t a t i s t i c s and estimates suggest that i n 1982, out
of a t o t a l c a p i t a l stock of some $3,756 mn i n manufacturing,
$2,250 mn (85%) was owned by p r i v a t e companies, $525 mn (14%) by
c e n t r a l government or p a r a - s t a t a l companies and the remaining $37
mn (less than 1%) by unincorporated p r i v a t e e n t e r p r i s e . With
f o r e i g n companies responsible for the ownership of some 48% of
the t o t a l assets of the manufacturing sector, they accounted f o r
about 80% of the t o t a l c a p i t a l of p r i v a t e manufacturing companies'^
. However since then - and i n quite the reverse pattern of
what has been happening i n many other A f r i c a n countries i n the
l a s t few years - the state has e i t h e r d i r e c t l y or i n d i r e c t l y been
a c q u i r i n g e i t h e r majority or part-ownership i n i n c r e a s i n g numbers
of key manufacturing concerns, the l a t e s t of which i s i n the
Delta Corporation, the l a r g e s t conglomerate i n the country, with
a net asset value i n November 1987 of $173 mn'.
Whilst expansion of the i n d u s t r i a l base of a country i s
commonly taken to be an i n d i c a t o r of development, i t doesn't
n e c e s s a r i l y f o l l o w that a l l i n d u s t r i a l growth i s b e n e f i c i a l nor
that past i n d u s t r i a l expansion i s an i n d i c a t o r that a l l i s w e l l
with the sector and that future expansion i s thereby assured. At
the extreme, i f the p r i c e of goods manufactured domestically i s
higher than p o t e n t i a l imports, expanded manufacturing would

i n v o l v e an i n c r e a s i n g net l o s s of f o r e i g n exchange to the
economy; or, again, i f the costs of inputs needed to produce the
goods exceed the s e l l i n g p r i c e then production w i l l be taking
place with negative value added. But these extremes do not have
to be reached f o r a judgement to be made about the strength of a
country's manufacturing sector. While employment c r e a t i o n i s
c l e a r l y an important f a c t o r i n judging the c o n t r i b u t i o n of
manufacturing to the whole economy, i t s o v e r a l l e f f e c t and
impact on the wider economy i s c l e a r l y of fundamental s i g ­
n i f i c a n c e . In t h i s regard i t i s important to analyse the
competitiveness of the sector and i t s impact on earning and
spending the country's scarce f o r e i g n exchange. Examining these
f a c t o r s not only provides a deeper understanding of the dynamics
of the sector, with i t s underlying strengths and weaknesses, but
also equips one to assess b e t t e r i t s future prospects. I t i s i n
t h i s context that we s h a l l now move on to examine a number of
long term trends i n c l u d i n g the sources of growth, the i n t e r ­
n a t i o n a l competitiveness of the sector and i t s o v e r a l l f o r e i g n
exchange p o s i t i o n .
2.3 Sources of I n d u s t r i a l Growth
Following Lewis and S o l i g o (1965), Lewis' (1971) and Chenery
(1960 and 1986), the "sources" of growth of Zimbabwe's manuf
a c t u r i n g sector i n the 30 year period 1952 to 1983 have been
c a l c u l a t e d and decomposed i n t o t h e i r three c o n s t i t u e n t elementsimport
s u b s t i t u t i o n , domestic demand and export growth.'= The
r e s u l t s f o r the manufacturing sector as a whole are shown
p i c t o r i a l l y i n Figures 4 and 5 and Table 2''. They reveal some
i n t e r e s t i n g r e s u l t s .
Of the t o t a l growth i n gross output of the manufacturing
sector i n the period 1952 to 1983, most (over 25%) was a t t r i ­
butable to the Foodstuffs sub-sector (1), with the f i r s t four
sub-sectors ( f o o d s t u f f s , beverages and tobacco, t e x t i l e s and
c l o t h i n g ) , the more consumer-oriented sub-sectors, accounting f o r
an almost consistent 48-49% of t o t a l output growth. What
d i s t i n g u i s h e s Zimbabwe's record of manufacturing growth from so
many other SSA c o u n t r i e s , however, i s the c o n s i s t e n t l y high
proportion of t o t a l growth o r i g i n a t i n g i n the intermediate and
c a p i t a l goods sub-sectors. Sub-sector 9, metals and metal
products, was not only the one c o n t r i b u t i n g most to o v e r a l l
growth, a f t e r f o o d s t u f f s , but i n the UDI period (1965-79) i t s
rate of growth exceeded that achieved by the f o o d s t u f f s subsector.
A d d i t i o n a l l y , the importance of sub-sector 7, chemicals
and pharmaceuticals should be noted. In a l l , sub-sectors 3,7 and
9 c o n s i s t e n t l y c o n t r i b u t e d between 57% and 60% to t o t a l manuf
a c t u r i n g output growth throughout the 30 year period.

Table 2
Origin of Growth in Gross Output by Sub-sector
1952/53-82/83;1952/53-1945/65; 1964/65-1978/79 and 1978/79-82/83
Percentage contribution of total growth from each s-sector
Subsector
1952/53-82/83 1952/53-64/65 1964/65-78/79 1978/79-82/83
1
2
3
4
5
6
7
8
9
10
11
25.1
9.3
9.2
5.9
2.9
5.2
15.0
2.8
20.1
3.4
1.1
23.4
8.7
7.9
6.8
2.6
6.2
16.7
0.6
18.2
8.7
0.4
23.1
7.2
12.5
5.4
2.7
4.6
13.6
2.7
26.0
1.1
1.2
26.7
10.8
7.2
6.0
3.2
5.4
15.7
3.1
16.6
4.1
1.1
Total 100.0 100.0 100.0 100.0
Source: As Figure 4.
With Figures 4 and 5, we begin to analyse the "sources" of
growth of the manufacturing sector, dis-aggregated i n t o import
s u b s t i t u t i o n , export growth and domestic demand. The l e f t - h a n d
part of Figure 4 records the breakdown of growth from 1952 to
1983. The major source of manufacturing growth throughout the
past 30 years (accounting f o r 52% of the change i n output) i s
derived from import s u b s t i t u t i o n , with domestic demand accounting
f o r 48% and export growth t r a i l i n g at 4.5%. The o v e r a l l
performance thus confirms the conventional view of the Zimbabwean
economy - a manufacturing sector which has been c h a r a c t e r i s e d by
a c t i v e p o l i c y of import s u b s t i t u t i o n and ( u n t i l post-1983) few
p o l i c y i n i t i a t i v e s s u b s t a n t i a l l y geared toward expanding manufactured
exports. Nonetheless, there are some important features,
observable i n the d i f f e r e n t h i s t o r i c a l sections of the graph,
which need h i g h l i g h t i n g . These r e l a t e to the period of the
Federation of Rhodesia and Nyasaland (1953 to 1963), the period
of UDI (1965 to 1979/80) and, f i n a l l y , the post-Independence
period.
F i r s t , according to the assumptions of the "sources of
growth" approach, Zimbabwe's major import s u b s t i t u t i o n thrust
occurred p r i o r to UDI, the period when d i r e c t c o n t r o l s were
imposed and government p o l i c y a c t i v e l y encouraged import subs
t i t u t i o n i n d u s t r i a l i s a t i o n . The major source of manufacturing
growth i n the UDI period o r i g i n a t e d i n domestic demand expansion
(responsible f o r twice as much of the output growth derived from
import s u b s t i t u t i o n ) . This i s of i n t e r e s t not only because the
UDI period has always been known as the period of import subs
t i t u t i o n par excellence but also because, as shown i n Figures 1

involve an i n c r e a s i n g net l o s s of f o r e i g n exchange to the
economy; or, again, i f the costs of inputs needed to produce the
goods exceed the s e l l i n g p r i c e then production w i l l be taking
place with negative value added. But these extremes do not have
to be reached f o r a judgement to be made about the strength of a
country's manufacturing sector. While employment c r e a t i o n i s
c l e a r l y an important f a c t o r i n judging the c o n t r i b u t i o n of
manufacturing to the whole economy, i t s o v e r a l l e f f e c t and
impact on the wider economy i s c l e a r l y of fundamental s i g ­
n i f i c a n c e . In t h i s regard i t i s important to analyse the
competitiveness of the sector and i t s impact on earning and
spending the country's scarce f o r e i g n exchange. Examining these
f a c t o r s not only provides a deeper understanding of the dynamics
of the sector, with i t s underlying strengths and weaknesses, but
also equips one to assess b e t t e r i t s future prospects. I t i s i n
t h i s context that we s h a l l now move on to examine a number of
long term trends i n c l u d i n g the sources of growth, the i n t e r ­
n a t i o n a l competitiveness of the sector and i t s o v e r a l l f o r e i g n
exchange p o s i t i o n .
2.3 Sources of I n d u s t r i a l Growth
Following Lewis and S o l i g o (1965), Lewis (1971) and Chenery
(1960 and 1986), the "sources" of growth of Zimbabwe's manuf
a c t u r i n g sector i n the 30 year period 1952 to 1983 have been
c a l c u l a t e d and decomposed i n t o t h e i r three c o n s t i t u e n t elementsimport
s u b s t i t u t i o n , domestic demand and export growth.'^ The
r e s u l t s f o r the manufacturing sector as a whole are shown
p i c t o r i a l l y i n Figures 4 and 5 and Table 2'^. They r e v e a l some
i n t e r e s t i n g r e s u l t s .
Of the t o t a l growth i n gross output of the manufacturing
sector i n the period 1952 to 1983, most (over 25%) was a t t r i ­
butable to the Foodstuffs sub-sector (1), with the f i r s t four
sub-sectors ( f o o d s t u f f s , beverages and tobacco, t e x t i l e s and
c l o t h i n g ) , the more consumer-oriented sub-sectors, accounting f o r
an almost consistent 48-49% of t o t a l output growth. What
d i s t i n g u i s h e s Zimbabwe's record of manufacturing growth from so
many other SSA countries, however, i s the c o n s i s t e n t l y high
proportion of t o t a l growth o r i g i n a t i n g i n the intermediate and
c a p i t a l goods sub-sectors. Sub-sector 9, metals and metal
products, was not only the one c o n t r i b u t i n g most to o v e r a l l
growth, a f t e r f o o d s t u f f s , but i n the UDI period (1965-79) i t s
rate of growth exceeded that achieved by the f o o d s t u f f s subsector.
A d d i t i o n a l l y , the importance of sub-sector 7, chemicals
and pharmaceuticals should be noted. In a l l , sub-sectors 3,7 and
9 c o n s i s t e n t l y contributed between 57% and 60% to t o t a l manuf
a c t u r i n g output growth throughout the 30 year period.

Table 2
Origin of Growth in Gross Output bv Sub-sector
1952/53-82/83;1952/53-1945/65; 1964/65-1978/79 and 1978/79-82/83
Percentage contribution of total growth from each s-sector
Subsector
1952/53-82/83 1952/53-64/65 1964/65-78/79 1978/79-82/83
1
2
3
4
5
6
7
8
9
10
11
25.1
9.3
9.2
5.9
2.9
5.2
15.0
2.8
20.1
3.4
1.1
23.4
8.7
7.9
6.8
2.6
6.2
16.7
0.6
18.2
8.7
0.4
23.1
7.2
12.5
5.4
2.7
4.5
13.6
2.7
25.0
1.1
1.2
26.7
10.8
7.2
6.0
3.2
5.4
15.7
3.1
16.5
4.1
1.1
Total 100.0 100.0 100.0 100.0
Source: As Figure 4.
With Figures 4 and 5, we begin to analyse the "sources" of
growth of the manufacturing sector, dis-aggregated i n t o import
s u b s t i t u t i o n , export growth and domestic demand. The l e f t - h a n d
part of Figure 4 records the breakdown of growth from 1952 to
1983. The major source of manufacturing growth throughout the
past 30 years (accounting f o r 52% of the change i n output) i s
derived from import s u b s t i t u t i o n , with domestic demand accounting
f o r 48% and export growth t r a i l i n g at 4.5%. The o v e r a l l
performance thus confirms the conventional view of the Zimbabwean
economy - a manufacturing sector which has been c h a r a c t e r i s e d by
a c t i v e p o l i c y of import s u b s t i t u t i o n and ( u n t i l post-1983) few
p o l i c y i n i t i a t i v e s s u b s t a n t i a l l y geared toward expanding manufactured
exports. Nonetheless, there are some important features,
observable i n the d i f f e r e n t h i s t o r i c a l sections of the graph,
which need h i g h l i g h t i n g . These r e l a t e to the period of the
Federation of Rhodesia and Nyasaland (1953 to 1963), the period
of UDI (1965 to 1979/80) and, f i n a l l y , the post-Independence
period.
F i r s t , according to the assumptions of the "sources of
growth" approach, Zimbabwe's major import s u b s t i t u t i o n thrust
occurred p r i o r to UDI, the period when d i r e c t c o n t r o l s were
imposed and government p o l i c y a c t i v e l y encouraged import subs
t i t u t i o n i n d u s t r i a l i s a t i o n . The major source of manufacturing
growth i n the UDI period o r i g i n a t e d i n domestic demand expansion
(responsible f o r twice as much of the output growth derived from
import s u b s t i t u t i o n ) . This i s of i n t e r e s t not only because the
UDI period has always been known as the period of import subs
t i t u t i o n par excellence but also because, as shown i n Figures 1

and 2, above, the f i r s t ten years of the UDI era were the period
of the most r a p i d increase i n r e a l value added and i n the MVA/GDP
r a t i o . A second notable feature i n d i c a t e d by the o v e r a l l r e s u l t s
- and one which, i f an accurate r e f l e c t i o n of what a c t u a l l y
occurred, casts doubt, at l e a s t i n part, upon the more f r e e -
market p o l i c y p r e s c r i p t i o n s f o r the sector - i s that there i s no
marked d i f f e r e n c e i n the r e l a t i v e export performance of the
sector during the more "open" Federal period and the more
"closed" UDI period. There i s , however, a s t r i k i n g contrast with
the f i n a l period when the export growth component of the change
i n output f e l l d r a m a t i c a l l y at the same time as domestic demand
accounted f o r i n excess of 100% of the increase i n gross output^".
This drop i n export shares o c c u r r i n g concurrently with a
r i s e i n the share a t t r i b u t e d to domestic demand^i confirms the
hypothesis presented i n the 1986 UNIDO report that, at l e a s t f o r
n o n - t r a d i t i o n a l manufactured exports, there appears to be a
trade-off between the domestic and export markets with the export
market s u f f e r i n g when domestic demand r i s e s (1986b:267-306) .
These r e s u l t s do, however, r a i s e the more general question
of the accuracy of t h i s "sources of growth" a n a l y s i s and the
extent to which i t does r e f l e c t adequately the dynamic changes
which have taken place w i t h i n manufacturing. In p a r t i c u l a r , the
approach almost c e r t a i n l y underestimates the extent of import
s u b s t i t u t i o n because i t only regards a reduction i n the import
r a t i o as import s u b s t i t u t i o n i n the year i n which the relevant
f a l l i n imports i s recorded; t h e r e a f t e r the import s u b s t i t u t i o n
e f f e c t i s not e x p l i c i t l y considered and the change i n output i s
a l l o c a t e d e i t h e r to domestic demand or export, as appropriate^^ _
F i n a l l y , i t should be r e i t e r a t e d that t h i s aspect of the
"sources of growth" a n a l y s i s i s designed to i n d i c a t e r e l a t i v e
changes i n the d i f f e r e n t c o n s t i t u e n t sources of output - i t i s
not designed to reveal absolute change. Thus although the r i g h t
hand part of Figure 4 records import s u b s t i t u t i o n as negative i n
the period 1978/79 to 1982/83, t h i s does not mean that there has
been a r e v e r s a l of import s u b s t i t u t i o n i n manufacturing over the
post-Independence period: i t i s only a r e l a t i v e f a l l which i s
i n d i c a t e d . Anyone f a m i l i a r with Zimbabwean i n d u s t r y knows f u l l
w e l l that continued import s u b s t i t u t i o n has been a notable
feature of many firms i n recent years, running not i n f r e q u e n t l y
i n t o m i l l i o n s of d o l l a r s of import saving^^.
"Sources" of growth data f o r the whole manufacturing sector
over the past 30 years mask d i f f e r e n t patterns of performance
w i t h i n p a r t i c u l a r sub-sectors over d i f f e r e n t periods of time.
Tables 3 and 4, together with Figure 5, summarise the subs
e c t o r a l data.
Some i n i t i a l observations can be made from t h i s data. The
pattern of greater r e l a t i v e import s u b s t i t u t i o n occurring i n the
Federal rather than UDI period, observed i n the aggregate data,
i s repeated f o r a l l sub-sectors^ •> : for sub-sectors { 4 ) , ( 5) , (7 ) ,-
(8) and (9) the d i f f e r e n c e s are extremely marked. Ir. contrast
with the Federal period, during UDI, there was also a s i g n i f i c a n t
f a l l i n the r e l a t i v e growth of exports f o r the r a j o r i t y cf

Figure 4: Sources of Growth of the Gross Output of the
Manufacturing Sector,by Industrial Sub-sector, 1952/53 to
1982/83.
Source: Census of Production, 1953, 1962, 1979/80 and 1983/84 -
Statement of External Trade, 1950-52,1965,1975,1976,1978,1979-
3, CSO. Harare, 1954 to 1985

Figure 5. Sources of Growth 1952/3 to 1982/3, A l l Manufacturing
1952/53-64/5
MonufocturinQ Sub—S«;to
IXS 19«4/S-7a/9 WZA 1978/9-B2/3
Source: As for Figure 4.
Note: For this exercise the industrial class: fication of the
detailed trade statistics were not used; instead the individual
items were re-classified to conform with the industrial divisions
of the Census of Production. The processing of individual metals
was excluded from the analysis, but ferro-alloys and iron and
steel products were included.

sub-sectors even though the o v e r a l l c o n t r i b u t i u o n of exports to
aggregate growth did not f a l l s u b s t a n t i a l l y . The high r e l a t i v e
rates of growth of exports and import s u b s t i t u t i o n i n the pre-UDI
period tends to suggests that (for the relevant sub-sectors)
import s u b s t i t u t i o n and export growth were i n i t i a l l y combined and
perhaps i n t e r - r e l a t e d rather than s e q u e n t i a l a c t i v i t i e s ^ ' .
A d d i t i o n a l l y the f i g u r e s show that f o r two sub-sectors - (3) and
(9) - export growth was a more important source of growth during
the " p r o t e c t i o n i s t " UDI than i n the " l i b e r a l " Federal period^^.
Part of the explanation f o r t h i s l i e s i n the r a p i d growth and
export of cotton l i n t and f e r r o - a l l o y production^'. But t h i s
does not provide an adequate explanation of e i t h e r the maintenance
of export growth i n the Foodstuffs sector or the t o t a l
growth of exports i n sub-sector (9) - and the Metals sub-sector
also experienced a very s i g n i f i c a n t r i s e i n domestic demand as a
source of growth i n the UDI period. F i n a l l y i n the most recent
period, 1978/79 to 1982/83, i n a l l sub-sectors the predominant
source of growth has l a i n i n the r i s e i n domestic demand; the
impact of export or import s u b s t i t u t i o n growth has been e i t h e r
minimal or negative. However sub-sectors (3) and (9) have
continued to experience r e l a t i v e export growth (even i f smaller
than i n previous periods) while some r e l a t i v e increase i n import
s u b s t i t u t i o n growth has occurred i n sub-sectors (7) and (8).
Table 3
"Sources" of Growth in Manufacturing Output by Sub-sector
1952/53 - 1982/83 and 1952/53 - 1964/65
Subsectors
Percentage of Total growth due to:
Domestic Export Import Domestic
Demand Growth Sub. Demand
1952/53 to 1982/83
Export
Growth
1952/53 to 1964/65
Import
Sub.
1 79.50 2.52 17.98 74.10 12.61 13.28
2 88.61 0.08 11.31 78.32 11.52 10.16
3 19.66 4.95 75.39 33.20 1.13 65.67
4 41.62 1.08 57.30 13.71 18.84 67.64
5 40.48 3.45 56.06 2.94 18.29 78.77
6 45.61 0.87 53.52 45.13 7.59 47.28
7 34.56 0.71 64.73 28.99 6.40 64.60
8 69.59 2.89 27.52 0.00' 25.88 74.12
9 24.18 4.42 71.42 13.01 8.63 78.36
10 60.19 0.56 39.25 26.41 5.59 67.99
11 35.92 9.25 54.83 94.86 67.75 -52.62
bal 48.70 3.50 51.70 36.06 10.17 53.76
Note: 1. Although this is the figure calculated from the raw data,
i t seems to be an unlikely result and may be due to
change in sectoral definitions over time.
Source: As for Figure 4.
A number of a d d i t i o n a l trends from the sub-sectoral data
should also be noted. For the Foodstuffs sub-sector, (1), the

predominant source of growth has l a i n i n domestic demand, with
the e f f e c t s of import s u b s t i t u t i o n minimal; the export growth of
t h i s sub-sector has c o n s i s t e n t l y been above the s e c t o r a l average.
The f a r lower growth of import s u b s t i t u t i o n i n the Clothing and
Footwear sub-sector (4) compared with T e x t i l e s (3) and the
d e c l i n i n g trend i n export growth i n the former h i g h l i g h t a
s t r i k i n g lack of export-oriented linkage between these two groups
of i n d u s t r i e s . F i n a l l y , sub-sector (10), Transport Equipment,
appears to have been i n a state of c o n t i n u a l decline or at l e a s t
on a "care and maintenance" f o o t i n g f o r at l e a s t the l a s t 20
years. Whereas i n the Federal period, t h i s sub-sector experienced
considerable growth i n import s u b s t i t u t i o n and exports,
subsequent growth i n each of these elements has been negative.
Table 4
"Sources" of Growth in Manufacturing Output by Sub-sector
1964/65 - 1978/79 and 1978/79 - 1982/83
subsectors
Percentage of Total Growth due to:
Domestic Export Import Domestic
Demand Growth Sub. Demand
1964/65 to 1978/79
Export
Growth
1978/79 to 1982/83
Import
Sub.
1 75.27 11.54 13.19 104.48 -3.98 -0.51
2 93.46 0.21 6.32 100.55 -1.40 0.85
3 29.59 14.33 56.08 89.20 11.94 -1.13
4 68.22 2.20 29.58 108.45 -4.09 -4.35
5 65.20 7.52 27.28 95.55 2.54 0.91
6 65.09 -1.62 36.53 103.76 1.83 -5.58
7 77.81 0.00 22.19 92.82 0.68 6.49
8 88.21 -1.55 13.34 84.96 5.95 6.49
9 50.36 12.93 36.71 113.78 11.64 -25.43
10 111.96 -7.59 -4.37 141.83 -0.38 -41.45
11 18.35 13.80 57.85 81.90 3.29 14.81
Total 60.99 9.08 29.93 103.60 2.30 -5.90
Source: As for Figure 4 and Table 2, above
2.4 Trends i n Imports and Exports
As the "sources" of growth a n a l y s i s provides i n s u f f i c i e n t
information on a c t u a l trade trends, i n t h i s s e c t i o n the export
and import performance of the manufacturing sector are examined
i n some d e t a i l .
At current p r i c e s , manufactured exports have expanded, at
times r a p i d l y , i n the period up to the e a r l y ISSOs r i s i n g from
$1.8 mn i n 1938 to $28 mn by the s t a r t of the Federation, $98 mn
by the commencement of UDI i n 1965, $307 mn j u s t before Independence
i n 1979, to $386 mn i n and to $741 mn by the end of 1986.
This seeming secular r i s e i n manufactured exports i s , however,
deceptive f o r i t conceals major s t r u c t u r a l changes apparent i n

d i f f e r e n t time periods. As a proportion of t o t a l commodity
exports, the c o n t r i b u t i o n of the manufacturing sector d i d
increase i n the period 1938 to around 1975; however, as shown
c l e a r l y i n Figure 6, manufacturing's r i s i n g share of t o t a l
commodity exports p r o g r e s s i v e l y weakened over t h i s period. A f t e r
the mid-1970s, t h i s steady, a l b e i t l e s s r a p i d , progress was q u i t e
d r a m a t i c a l l y reversed^s. A f t e r the f i r s t three f u l l years of
Independence, the proportion of manufacturing to t o t a l exports
had f a l l e n back to the pre-UDI l e v e l s recorded i n 1963-65,
although an equally dramatic recovery took place i n the three
years from 1984 to 1986. However i f the exports of cotton l i n t
and f e r r o - a l l o y s are deducted from both manufactured and t o t a l
exports, then the proportionate post-Independence f a l l i s even
more severe, b r i n g i n g the r a t i o of manufactured to t o t a l exports
down to j u s t over 20%, back to the l e v e l p r e v i o u s l y achieved i n
the e a r l y 1950s, with only marginal recovery i n the f i n a l 1984 to
1986 period.
Figure 6. Manufacturing to Total Commodity Exports, 1939 to 1986.
50
0 - i i — 1 — I — I — I — I — 1 — I — I — ) — I — I — r — I — I — I — I — I — I — 1 — I — I — I — I — I —
» 41 43 45 47 49 61 53 55 57 59 61 63 65 e? 65 71 7J 75 77 79 81 83 84 85 86
Mfcbjred o^a- Totol ExportoCNonGold)
-f- LciS FrChr. • All Mfcired Exports: Ctn Lnt
Source: as for Figure 7 and unpublished trade data, CSO (1987).
An equally c l e a r , although not i d e n t i c a l , p i c t u r e of s t r u c t u r a l
change i s evident from examining the r e l a t i o n over time of
manufactured exports to the t o t a l gross output of the manufacturing
sector. As shown i n Figure 7, by the e a r l y post-Independence
period only some 10% of t o t a l manufacturing output was
being exported compared with about 18% i n the l a t e 1970s and a
peak l e v e l of around 26% at the commencement of UDI. The marked
contrast between the Federal and UDI periods i s shown

Figure
1952/53 to 1982/3.
o.
0
0
0
L
Jit
26 -
\
25 -
\
2+ ^
\
23 -
\
22 -
\
21 -
20 -
o 19 -
\
\
t 18 -
o
17 -
\
16 - \
0 \
0 IS - \
O
ft:
1 4 -
\
13 -
\
12 -
\
I 1 -
\
1 D - ' 1 ] [ r I I 1 1 1 1 1 1 J I
52/5354/5556/5758/5960/6162/6364/6566/6763/6970/7172/7374/7576/7778/7960/8182/8!
Sources for Figures 6,7 and 8: External Trade, various years. Monthly Digest
of Census of Production Data, various years. Statement of Statistics, various
years.
Figure 8. Sub-sectoral Contribution to Total Manufacturing Exports,
1952/53 to 1982/83.
1952/53
Monufactured
sub —^c^ors
[Vq 1964/65 K?^ 197S/79 XVv"^ • 982/83

s t r i k i n g l y i n the graph: i n the former, exports continued to r i s e
as a proportion of t o t a l gross output but i n the UDI period t h i s
r a t i o f e l l , and f a r more r a p i d l y than during the pre-UDI r i s e . ^ ^
The data i n Figures 6 and 7 are c o n s i s t e n t with that
provided i n the sources of growth a n a l y s i s ; however, they r e v e a l
f a r more c l e a r l y the s u b s t a n t i a l s t r u c t u r a l changes which have
occurred i n the manufacturing sector as a whole.
As could be a n t i c i p a t e d , the aggregate data conceals
s u b s t a n t i a l sub-sectoral v a r i a t i o n s . Figure 8 shows the change
i n composition of manufactured exports by sub-sector since the
e a r l y 1950s. The most dramatic s h i f t has occurred i n r e l a t i o n to
sub-sectors (1), (3), (4) and (9). Whereas i n 1952/53, 43% of
manufactured exports consisted of Foodstuffs (1) and C l o t h i n g and
Footwear(4), t h e i r j o i n t c o n t r i b u t i o n had f a l l e n to 30% by
1964/65 and to a mere 13% by 1982/83. On the other hand, the
Metals sub-sector only contributed 11% to manufactured exports i n
1952/53, but i t s c o n t r i b u t i o n had r i s e n to over 45% of the t o t a l
by the e a r l y 1980s, with T e x t i l e s (3) r i s i n g from 11% to 22% of
the t o t a l i n the same time periods.
Perhaps even more dramatic have been the changes which
occurred i n the export to gross output r a t i o s f o r the d i f f e r e n t
sub-sectors over time. These are recorded i n Table 5. Over the
Table 5
Ratio of Manufactured Exports to Gross Output by Sub-sector
1952/53 to 1982/83
Sub- Manufactured Exports over Gross Output (percentage)
ir 1952/53 1964/65 1976/77 1978/79 1980/81 1982/83
1 18.80 16.70 14.31 13 . 86 6.05 3.71
2 17.01 14.44 5.11 4 .50 2.54 0.84
3 56.17 17.11 29.03 30.47 25.50 23.57
4 65.95 51 .53 21 .95 17.14 10.70 5.43
5 21 .09 31.08 21.58 15.75 10.86 8.42
6 5.70 15.48 2 .73 2.47 1 .60 2.23
7 19.53 23.60 5.02 5.60 4.43 2.95
8 16.92 20.28 5 .88 2.92 4 , 55 5.40
9 23.91 40.48 25.24 28.55 27.66 23.07
10 10.52 21.81 10.27 10.37 e.27 3.23
11 28.17 84.79 55.67 64 .15 22.81 33.77
Total
24 .07 25.41 16.66 17.24 13.2B 9.51
Source: Census of Production and Statement of External Trade
Various Years.

period 1952/53 to 1982/83, Foodstuffs (1) exports have f a l l e n
from 19% to 4% of gross output. C l o t h i n g and Footwear (4) from a
staggering 66% to a mere 5% and even f o r the T e x t i l e s (3) subsector
the r a t i o has f a l l e n . From the s t a r t of the UDI period
down to the f i r s t few years of Independence i n 1980, a decreasing
amount of gross output has been p r o g r e s s i v e l y exported i n each
and every i n d u s t r i a l sub-sector. With the exception of T e x t i l e s
(3) and Metals(9), the r a t i o was l e s s than 10% f o r every subsector,
whereas i t exceeded 14% f o r everyone at the s t a r t of UDI.
D i s t u r b i n g though these changes i n manufacturing exports
have been, more recent evidence suggests that i n the post-1983
period some more favourable changes have occurred. Although a l l
data are not a v a i l a b l e to extend the trade to output trends of
Figure 7 and Table 5, published trade s t a t i s t i c s reveal that
a f t e r 1982 there were s i g n i f i c a n t upswings i n manufacturing
exports i n 1984 and 1985, with some dramatic expansion shown at
the sub-sectoral l e v e l even i f the 1986 f i g u r e s , however, are
l e s s encouraging. Figure 9 shows the crude trends from 1980 to
19863°. The top l i n e i n Figure 9 shows t o t a l manufactured
exports i n c l u d i n g f e r r o - a l l o y s , cotton l i n t and s t e e l exports,
the middle l i n e t o t a l manufactured exports l e s s the exports of
cotton l i n t and f e r r o - a l l o y s and the lower l i n e t o t a l manufactured
exports l e s s a l l three categories - cotton l i n t .
Figure 9. Manufactured Exports, 1978 to 1986, $ mn.
800 -| —
10D -| 1 1 1 —\ 1 1 T
1978 1979 1980 1981 1982 1983 198+ 198S 1986
Yeore
QAII + Less C Lnt.F.Crrn-: » U s s Lnl Crrrv; Steel
Source: External Trade Statistics, various years, CSO

f e r r o - a l l o y s and s t e e l exports. A d d i t i o n a l l y , the f i g u r e s also
show that by 1985/86 as a proportion of t o t a l commodity exports,
manufactured exports had begun to regain t h e i r pre-Independence
share, although, again, the 1986 f i g u r e s i n d i c a t e that the gains
made i n 1984 and 1985 were not sustained i n t o 19863 1. I n i t i a l
evidence f o r 1987 reveals that manufacturing exports continued to
expand f o r c l o t h i n g and footwear (57% increase over 1986),
t e x t i l e s (32% increase), f o o d s t u f f s , drink and tobacco, nonm
e t a l l i c minerals and c u r i o and leather products. For sub-sector
10, however, exports are estinmated to have contracted by 30% i n
r e l a t i o n to 1986 l e v e l s ^ ^ .
As can be seen from Table 6, some of the sub-sectoral
increases i n manufactured exports have been very s i g n i f i c a n t ,
while beverages and tobacco (2) and wood and f u r n i t u r e products
(5) have performed e x c e p t i o n a l l y poorly. O v e r a l l , the exports of
manufactures excluding cotton l i n t , f e r r o - a l l o y s and s t e e l s
products have more than doubled over the past seven years, r i s i n g
from $147 mn i n 1980/81 to $318 mn
Table 6
Sub-sectoral Changes in Manufactured Exports
1980/81 to 1985/86, S mn (current)*
Sub- Manufactured Exports Percentage
sector 1980/81 (2 year av) 1985/86 Change
1 33.9 95.7 182
2 4.5 3.3 -27
3* 13.7 45.0 229
4 18.5 25.2 36
5 10.4 9.5 9
6 2.1 7.4 252
7 17.1 32.1 88
8 3.4 9.5 179
9** 29.3 44.0 50
10 5.7 14.4 153
11 8.2 31.9 289
Total*** 146.8 297.9 103
Source: Statement of External Trade 1980 and 1981 and
unpublished trade statistics, CSO.
Notes: * Excluding exports of Cotton Lint.
** Excluding exports of ferro-alloys and steel.
*** Total excluding the above named items.
+ The s t a t i s t i c a l digest does not categorise exports by
industrial sub-sector so judgments had to be made to
classify them in this manner.

i-iz Additionally, i t i s also important to h i g h l i g h t that
..T zz ths value of the exports of f e r r o - a l l o y s , cotton l i n t
= -.z I'.eel products doubling from $197 mn i n 1980/81 to $412 mn i n
iilz li z'r.a proportion of "other" manufactured exports rose, i f
-L--_r = llT, from 42.7% to 43.6% of a l l manufactured exports.
? = = £:r-S *-:-y t h i s r e v e r s a l i n the d e c l i n e of manufactured exports
r,-g"-t have occurred i n the l a s t few years are discussed below,
e s p e c i a l l y i n Section 3.3.
We now s h i f t a t t e n t i o n from exports to imports. Manufactured
a r t i c l e s imported i n t o a country f a l l i n t o three groups:
those that are purchased d i r e c t l y for f i n a l consumption (consumer
and durable products); those that are to be used as inputs i n t o
production ( i n c l u d i n g manufacturing production) and, f i n a l l y ,
plant and machinery which i s used to expand the productive base
of the economy. In general as a country i n d u s t r i a l i z e s , manufactured
imports w i l l r i s e i n value^^ but t h e i r composition w i l l
change. Over time one would expect there to be a reduction i n
the proportion (and perhaps, though not n e c e s s a r i l y , the t o t a l
quantity) of more simple manufactured imports - many products at
the consumer end of the market - and f o r the imports of more
complex manufactured products, intermediate inputs and plant and
machinery to r i s e - i n the case of Zimbabwe, those c l a s s i f i e d as
products from sub-sectors (6), (7), (9) and (10).
In rather crude terms, t h i s pattern i s observable f o r
Zimbabwe'". Grouping manufactured imports i n t o the production
c l a s s i f i c a t i o n for Zimbabwean industry reveals that i n 1952/53,
imports of simpler (mostly consumption) goods accounted f o r 36%
of t o t a l manufactured imports, while more complex (intermediate
and c a p i t a l ) goods accounted f o r 65% of the t o t a l . By 1964/65
the simpler, mostly consumption, goods had f a l l e n to 27% of the
t o t a l and by 1982/83 they accounted f o r only 11% of t o t a l
manufactured goods''. In contrast, 86% of a l l manufactured
imports were more complex, mostly intermediate and c a p i t a l
products' * .
A f u r t h e r i n d i c a t o r of the process of i n d u s t r i a l development
would be provided by analysing the degree to which, over time,
the o r i g i n of the composition of inputs i n t o manufacturing
production changes. In general one would expect that as a
country i n d u s t r i a l i z e s , i n c r e a s i n g amounts e s p e c i a l l y of i n t e r ­
mediate and c a p i t a l goods w i l l be made domestically (with a
decreasing f o r e i g n exchange component i n t h e i r production) rather
than being imported d i r e c t l y . There are, r e g r e t t a b l y , no
r e l i a b l e time s e r i e s data to analyse the respective proportion of
purchases made by the manufacturing sector which are imported and
are purchased d o m e s t i c a l l y " . However data from the 1965
input/output model, supplemented by the 1980 UNCTAD update of
these f i g u r e s f o r 1975 and by crude estimates made i n the 1986
UNIDO study of.the manufacturing sector (1986b:41, 70) f o r the
period 1980-82 provide the best time s e r i e s a v a i l a b l e . These are
shown i n Table 7. O v e r a l l t h i s shows d i r e c t imports o v e r a l l
f a l l i n g from 42% of t o t a l inputs purchased i n 1965 to 35% i n 1975
and down to about 23% of t o t a l purchases by the e a r l y 1980s. For
the l a t t e r period these vary from a low of 2.4% for

Table 7
Purchases by the Manufacturing Sector
by Imported and Domestic Origin
Sub- Percentage of Inputs Imported Directly'
Sector 1965 1975 1980-82(av.)
1 11.6 9.0 2.4
2 15.6 10.1 24.0
3 40.9 35.0 23.0
4 30.9 24.9 39.0
5 46.5 39.9 14.0
6 49.1 52.0 24.0
7 76.7 59.3 52.0
8 30.0 29.8 16.0
9 49.2 47.0 41.0
10 79.3 82.0 60.0
11 58.8 60.3 25.3
A l l 42.3 34.8 25.3
Notes: 1. The figures in this final column are based on a
sample survey of manufacturers who were asked the origin of
their raw material purchases, whereas the data in the f i r s t two
columns are for total inputs, including purchases of capital
equipment. Hence the differences in the 1980-82 data probably
overestimate the reduction in direct import dependence.
Source: Central Statistical Office, National Accounts and
Balance of Payments Statistics of Rhodesia, 1965,
Harare, CSO, UNCTAD (1980) Annex III and UNIDO
(1986b:70) .

Foodstuffs ( l ) t o a high of 60% f o r Transport Equipment (10)'».
The remainder c o n s i s t e d of inputs and c a p i t a l equipment made
l o c a l l y with e i t h e r l o c a l materials or with an (unknown) mix of
l o c a l and imported m a t e r i a l s ' ' .
With more accurate time s e r i e s data which do e x i s t , i t i s
p o s s i b l e to examine the r e l a t i o n s h i p o v e r a l l and c l a s s i f i e d i n t o
i n d u s t r i a l sub-sector groupings between manufactured imports and
exports. Using these data a " s e l f - s u f f i c i e n c y index" has been
constructed which i s derived by expressing the r a t i o of exports
over imports as a percentage. I f the index value exceeds 100 then
the country exports more of the goods than i t imports i n the
groups defined, the greater the value i n excess of 100 the l a r g e r
the trade surplus and the lower the value l e s s than 100 the
l a r g e r the trade d e f i c i t . While there i s , c l e a r l y , no " c o r r e c t "
index l e v e l e i t h e r f o r manufactured products as a whole or f o r
d i f f e r e n t sub-sectors, a r i s i n g index over time would i n d i c a t e a
more favourable impact of manufactures on the balance of payments,
while a f a l l i n g index and one c o n s i s t e n t l y w e l l below the
c r i t i c a l l e v e l of 100 would i n d i c a t e both absolute and i n c r e a s i n g
losses of f o r e i g n exchange*" .
Figure 10. S e l f - S u f f i c i e n c y Index, Manufacturing Industry,
1952/3 - 82/3.
10D
-•
90 -
« BD -
t
o
10 -
D H^- 1 i 1 1 i 1 1 ] 1 1 —I j i ;
S2/5J54/65S6/675e/59&0/f.162/636

Table 8 gives the various index l e v e l s grouped by i n d u s t r i a l subsector.
The f i g u r e s suggest that they can be grouped together
i n t o two s u b - d i v i s i o n s . I n t e r n a t i o n a l trade of products grouped
i n t o the f i r s t f i v e i n d u s t r i a l sub-sectors have produced a s e l f -
s u f f i c i e n c y index value of over 100 almost continuously f o r the
past 20 years, i n d i c a t i n g that Zimbabwe exports more of the
products of these sub-sectors than i t imports, even i f the values
of the d i f f e r e n t i n d i c e s have f a l l e n s u b s t a n t i a l l y i n the e a r l y
post-Independence period. The reversed L-shape of Figure 10 i s
mirrored i n the performance of the trade of items grouped under
i n d u s t r i a l sub-sector (9), with an extremely low l e v e K l e s s than
15) and a f a l l i n g index l e v e l recorded f o r trade of items grouped
under sub-sectors (5),(7) and (10).
Table 8
Self-sufficiency Index* of Exports over Imports by Industrial
Sub-sector, 1952/53 to 1982/83 (various years)
Industrial Self-Sufficiency Index for the folloving years:
Sub-sector
1952/53 1964/65 1978/79 1980/81 1982/83
1 85.9 143.0 2,042.3 319.9 382.6
2 131.6 250.0 407.1 236.8 147.4
3 15.5 13.2 150.3 87.9 113.0
4 49.6 171.1 596.3 248.0 101.8
5 16.9 102.5 331.8 173.3 197.8
6 4.5 30.0 21.1 7.3 14.7
7 7.1 32.8 13.1 9.7 7.9
8 31.0 57.6 13.0 25.4 35.5
9 5.7 39.3 70.4 54.8 41.0
10 2.9 15.3 7.1 4.1 1.6
A l l 15.3 41.4 70.0 42.8 33.3
Note: * The index is the ratio of products exported divided by products
imported, grouped together by the census of production
classification.Source: Statement of External Trade
(Various Years).
2.5 I n t e r n a t i o n a l Comparisons of Competitiveness
While analysing rates of i n d u s t r i a l growth, expansion and
s t r u c t u r a l change and the r e l a t i v e d i f f e r e n c e s i n import s u b s t i ­
t u t i o n and exports over time provide some guide to the evolving
h e a l t h of the manufacturing sector, an increasingly-use'd method
of a s c e r t a i n i n g v i a b i l i t y and strength i s to c a l c u l a t e rates of
p r o t e c t i o n f o r the sector as a whole, f o r sub-sectors and even
down to the l e v e l of a p a r t i c u l a r i n d u s t r y or f i r m . Rates of
e f f e c t i v e p r o t e c t i o n provide a measure (at the point of time i n
which they are calculated) of the r e l a t i v e world or " f r e e " trade
p r i c e s of goods manufactured domestically i n contrast with the
border p r i c e s of comparable goods; they thus give an i n d i c a t i o n
of the degree of i n t e r n a t i o n a l competitiveness of the industry,
f i r m or sub-sector being analysed. For instance, an E f f e c t i v e

P r o t e c t i o n C o e f f i c i e n t (EPC) of l e s s than u n i t y implies that
value added i s lower than could be achieved with both inputs and
outputs valued at i n t e r n a t i o n a l (border) p r i c e s . Lil^ewise, the
Domestic Resource Cost (DRC) measures the r a t i o of domestic costs
at s o c i a l p r i c e s to value added, also at s o c i a l p r i c e s , g i v i n g a
s o c i a l p r o f i t a b i l i t y index. A DRC value of l e s s than u n i t y
i n d i c a t e s that the f i r m , i n d u s t r y or sub-sector i s producing a
product or products which, even i n the absence of government
c o n t r o l s and domestic subsidies etc., would provide enough value
added f o r the worltforce to be remunerated and for a return on
c a p i t a l to be earned. In short, DRCs measure comparative
advantage at the point of time when the data are c o l l e c t e d .
Comparing EPCs and DRCs over time would thus show the changing
pattern of i n d u s t r i a l v i a b i l i t y r e l a t e d to i n t e r n a t i o n a l competitiveness,
and provide a good comparative i n d i c a t o r of the
strength of i n d u s t r y . The measures are p a r t i c u l a r l y u s e f u l i n
determining the extent to which i n d u s t r i e s or firms are able (at
a given point of time) to export t h e i r products.
Measures of rates of p r o t e c t i o n have not been c a l c u l a t e d for
Zimbabwean i n d u s t r y u n t i l r e c e n t l y ; however, manufacturing-wide
data are a v a i l a b l e f o r the year 1982, supplemented by some
p a r t i a l data f o r 1986. The 1986 c a l c u l a t i o n s were done by a World
Banl^ i n d u s t r i a l sector mission"'. Inter a l i a , t h i s mission's
report i n d i c a t e s that the 1982 f i g u r e s almost c e r t a i n l y underestimated
the degree of i n t e r n a t i o n a l competitiveness of Zimbabwe's
manufacturing sector, i n some sub-sectors , such as s t e e l ,
d r a m a t i c a l l y so (IBRD, 1987:69-72,90).
The a v a i l a b l e data, reproduced i n summary form i n Table 9,
show that i n 1982, f o r four sub-sectors (accounting for 47% of
MVA), the average DRC was less than u n i t y and that f o r every
sub-sector there were firms operating with DRCs s u b s t a n t i a l l y
l e s s than u n i t y .
This t a b l e h i g h l i g h t s two important f a c t o r s . The f i r s t i s
that i n 1982 Zimbabwean i n d u s t r y was, i n general terms, i n a f a r
from weak i n t e r n a t i o n a l l y competitive p o s i t i o n " ^ . The second i s
that behind the average sub-sectoral data l i e an a s t o n i s h i n g l y
wide array of d i f f e r e n t DRC scores. Within the context of
Zimbabwe's manufacturing h i s t o r y , t h i s data (with i t s q u a l i f i c a ­
tions) lead to two important p o l i c y conclusions. F i r s t , the long
period of p r o t e c t i o n i s t i n d u s t r i a l p o l i c i e s during the UDI period
does not appear to have l e d to the e v o l u t i o n of a h i g h l y uncomp
e t i t i v e manufacturing sector even though, as h i g h l i g h t e d above,
i t d i d lead to a r e l a t i v e d e c l i n e i n changes i n output derived
from both import s u b s t i t u t i o n a c t i v i t i e s and export growth"'.
Second, the wide range of DRC scores w i t h i n d i f f e r e n t subsectors,
and indeed w i t h i n p a r t i c u l a r i n d u s t r i e s , i n d i c a t e s that
f o r firms and i n d u s t r i e s to achieve i n t e r n a t i o n a l competitiveness
involves f a r more than p r o v i d i n g the " c o r r e c t " macro-economic
framework and i n c e n t i v e s t r u c t u r e - an issue to be discussed
f u r t h e r , below"". F i n a l l y , however, i t should also be born i n
mind that the DRC c a l c u l a t i o n s are themselves only estimates (the
accuracy of which i s i t s e l f unknown) based

sometimes on questionable assumptions and guesses. Thus, as the
1987 World Bank study of Zimbabwean i n d u s t r y s t a t e s , the DRC
scores should be used with a great deal of caution''' .
Table 9
International Competitiveness of Manufacturing Industry
DRC Calculations, 1982 and 1986
Sub- DRC Measures for 1982 DRCs for 1986
Sector General With Range
25% of Values
Deval . Found
1 0.88 0.70 0.53 to 1.65
2 0.88 0.70 0.61 to 1.84
3 1.28 1.02 0.75 to 2.45 0.89 to 1.14
4 1.05 0.84 0.89 to 2.20
5 1.33 1.06 not available
6 1.87 1.49 1.12 to 5.59
7 0.94 0.75 0.38 to 2.44 0.28 to 0.911
8 0.98 0.78 0.82 to 2.02
9 2.41 1.93 0.40 to 5.49 0.58 (for steel)2
10 1.27 1.02 0.82 to 3.40
Total 1.27 1.02
Manufacturing
Notes: 1. This was for f e r t i l i z e r firms whose DRCs for 1982
were recorded in the range 0.65 to 1.00.
2. The 1982 DRC for steel was calculated at 4.4; however,
the method of calculation differed in the two studies.
Source: Jansen (1983, Vol.11:84) and IBRD (1987).
A f u r t h e r i n d i c a t o r of i n t e r n a t i o n a l competitiveness comes
from a v a i l a b l e d i r e c t i o n of export s t a t i s t i c s . These not only
reveal increased competitiveness achieved during the UDI period
but also some s i g n i f i c a n t s h i f t s i n export d e s t i n a t i o n s . Whereas
i n the two year period 1964 and 1965, 92% of a l l Zimbabwe's
manufactured exports"« went to e i t h e r South A f r i c a or the
Southern A f r i c a n Development Coordination Conference (SADCC)
countries, i n the period 1981 to 1983, only 43% of a l l manufactured
exports went to Zimbabwe's southern A f r i c a n neighbours.
In l a t e 1987 comprehensive trade data by seven d i g i t c l a s s i ­
f i c a t i o n f o r each country d e s t i n a t i o n were made a v a i l a b l e f o r the
years 1984, 1985 and 1986 enabling a f a r greater depth of
a n a l y s i s of manufacturing exports than has been p o s s i b l e f o r any
year since 1964. In aggregate these data confirm the UDI trends
j u s t mentioned. In 1984, only 41% of a l l manufactured exports
went to countries i n southern A f r i c a , f a l l i n g to 34% by 1986. I f
a l l exports of cotton l i n t , ferro-chrome and s t e e l products are
excluded, dependence on southern A f r i c a n markets increases

s i g n i f i c a n t l y although the reduction i n dependence i s c l e a r l y
observable over recent years. Whereas i n 1984, 69% of a l l such
exports went to southern A f r i c a n countries, t h i s r a t i o had
dropped to 61% by 1986. As the data i n Tables 10 and 11 i n d i c a t e ,
the most important changes observable i n recent years have been
the decrease i n dependence upon South A f r i c a as a d e s t i n a t i o n f o r
manufactured exports (estimated to be taking about 32% of t o t a l
manufactured exports i n 1980, with the exclusion of cotton
l i n f ' ' ) and the s i g n i f i c a n t r i s e i n the share of n o n - t r a d i t i o n a l
manufactured exports being s o l d to d e s t i n a t i o n s outside A f r i c a .
Table 10
Manufactured Exports by Area of Destination,
1980, 1984 and 1986, $ mn.
Market Total Manufactured Total Manufactured
Exports Exports less cotton
l i n t , ferro-chrome
and steel
1984 % 1986 % 1984 % 198( %
South Africa 137.4 23 101.7 14 82.3 30 65. .1 20
SADCC 114.5 19 144.6 20 106.9 39 134, .9 41
Other Africa 23.6 4 32.7 4 22.3 8 19, .3 6
Non-African 318.6 54 462.0 62 63.3 23 112, .9 34
Total 594.1 100 741.0 100 274.8 100 332 .2 100
Total Manufactured Exports:
Less Cotton l i n t
Less Cotton Lint and ferrochrome
1980 % 1984 % 1986 % 1980 % 1984 % 1986 %
S Africa 93.7 32 100.7 21 69.4 11 89.2 41 97.5 30 65.6 16
SADCC 114.5 24 144.6 24 114.5 35 144.4 36
Other Af. 23.6 5 32.7 5 23.3 7 32.4 8
Non Af. 240.0 50 363.8 60 88.8 27 158.1 40
Total 288.9 100 478.8 100 610.5 100 218.7 100 324.1 100 400.5 100
Source: "Domestic Exports Valued FOR by Item/Country", CSO, Harare,
1988 (mimeo) and Riddell (1981b).

In 1986, 34% of n o n - t r a d i t i o n a l manufactured exports went to non-
A f r i c a n countries compared with 23% i n 1984 and f o r f i v e
manufacturing sub-sectors over 40% of a l l manufactured exports
were sold outside A f r i c a .
Table 11
Manufactured Exports by Industrial Sub-Sector and Destination
Percentage Export by Respective Destination
South SADCC Other Non- Total Exports
Africa African African 3 million
1980, 1984 and 1986, $ million-
Subsctr
•80 '84 '86 '84 '86 '84 '86 '84 '86 1980 1984 1985
1 37 16 12 33 34 22 9 29 45 6.8 70.4 98.5
2 73 83 69 6 6 3 10 8 15 5.6 3.5 2.8
3 — 33 22 9 8 - - 58 70 — 154.5 179.7
3* 58 36 14 37 38 - 1 27 46 10.7 39.2 49.2
4 93 55 36 12 15 1 1 32 48 15.4 20.5 28.9
5 86 60 43 30 41 5 4 5 12 8.8 11.8 9.1
6 56 7 14 80 76 1 3 12 7 1.2 8.6 6.7
7 26 8 9 78 77 2 4 12 10 1.8 31.2 30.5
8 15 54 4 40 75 5 3 1 18 0.6 10.0 11.5
9 — 14 6 11 11 2 5 73 78 — 248.3 324.3
9** 27 34 12 16 30 4 14 46 44 23.8 93.6 114.3
10 61 14 5 66 67 20 27 0 1 9.4 10.4 16.2
11 90 31 32 6 4 1 1 62 63 5.1 25.0 32.2
Note : * Sub-sector 3 with cotton l i n t export data omitted;
** Sub-sector 9 with ferro-chrome exports omitted.
Source: As for Table 10.

While these successes deserve due r e c o g n i t i o n , i t i s equally
important to h i g h l i g h t some of the c o n s t r a i n t s impeding f u r t h e r
export expansion. C l e a r l y one major b a r r i e r to increased
overseas competitiveness i s c a p i t a l and machinery shortages which
were h i g h l i g h t e d i n a survey conducted f o r the UNIDO study i n
1985. These r e s u l t s show that whereas 90% of manufacturers
maintained that they had adequate plant to manufacture goods for
the domestic market, only 54% stated they had adequate plant to
export to South A f r i c a and only 30% f o r the overseas market
(UNIDO, 1986b:281-282)''8 .
2.6 Trends i n Value Added
A f i n a l i n d i c a t i o n of the strength of the manufacturing
sector can be obtained from examining trends i n the MVA to gross
output r a t i o and i n the constant p r i c e value added per employee.
In general, i f these r a t i o s r i s e over time t h i s i s u s u a l l y a sign
of i n c r e a s i n g i n d u s t r i a l strength; f o r Zimbabwe they are of
p a r t i c u l a r importance because, during both the UDI and post-
Independence period, the manufacturing sector has suffered from a
severe shortage of f o r e i g n exchange required for replacement and
expanded c a p i t a l investment"'.
Figure 11. Manufactured Value Added Per Employee at Fixed (GNI)
Prices, A l l Sectors.
1 -
0 — I 1—I—1 1—I—I 1—I 1—I—I 1—I—I 1—;—1 1—I 1 — I —
60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 B2 83
Time
pe/ic?d in Yeor3
• Usirvg GNI Deflator
Source: Census of Production and Digest of Statistics (various years) .

The general pattern of a r i s i n g l e v e l of MVA from the e a r l y
1950s to the mid-1970s, a c c e l e r a t i n g i n the decade a f t e r 1966,
c o n t r a c t i o n i n the l a t e 1970s and renewed, i f l e s s s t a b l e ,
expansion t h e r e a f t e r for the manufacturing sector as a wholeshown
i n Figure 2, above - has broadly been repeated for the
d i f f e r e n t sub-sectors of i n d u s t r y . The annual changes i n MVA by
sub-sector over a 20 year period reveal more v o l a t i l e s h i f t s i n
r e a l MVA trends than the o v e r a l l average f o r sub-sectors (3), (8)
and (10), while sub-sectors (1) and (2) recorded a more steady
secular r i s e with no c o n t r a c t i o n i n the p e r i o d of the l a t e
1970s"'. Figure 11 shows that, i n terms of MVA per c a p i t a , the
trend over the past 25 years has also been s t e a d i l y upwards,
again with accelerated growth i n the decade a f t e r UDI. For the
sub-sectoral brealcdown, the o v e r a l l secular increase i s repeated
for a l l but two sub-sectors: consistent with previous observations,
the poorest performance occurred i n sub-sectors (6) and
(10) with sub-sectors (5) and (7) experiencing the widest
f l u c t u a t i o n s around the r i s i n g trend.
Figure 12. Ratio of Manufactured Value Added to Gross Output, A l l
Sub-Sectors, 1960 to 1983.
e
o
60 61 62 63 6+ 65 66 67 68 69 70 71 72
1 — T — I — • 1—-1 1 — I — I — r
'3 74 7a 76 T7 78 79 80 81 .82 83
Time period in Yeara
Source: Census of Production (various yrs) and national Accounts (1986)
From 1960 to 1983 the MVA to gross output r a t i o (shown i n
Figure 12) remained almost s t a t i c f o r the manufacturing sector as
a whole, although i t e x h i b i t e d the now-familiar (although only

marginal) r i s e i n the 1966 to 1973 period, a subsequent f a l l and
then f i n a l r i s e at the end of the decade of the 1970s''. There
i s , however, an observed, even i f only small, drop i n the r a t i o
from 1960 to 1963. What needs to be h i g h l i g h t e d , though, i s that
the almost h o r i z o n t a l l i n e c h a r a c t e r i s i n g the manufacturing
sector as a whole conceals some s u b s t a n t i a l sub-sectoral d i f ­
ferences. As we have now come to expect, sub-sectors (10) and
(6), e s p e c i a l l y , e x h i b i t e d a d e t e r i o r a t i n g performance, while
sub-sectors (1), (2), (4) and (9) a l l displayed a r i s i n g trend.
The greatest f a l l i n i t s MVA/GDP r a t i o , however, occurred i n the
t e x t i l e s sub-sector (3).
2.7 Seeking P r e l i m i n a r y Explanations
I t i s now time to step back from long term data a n a l y s i s of
the evolution of the manufacturing sector at the macro-level and
broaden d i s c u s s i o n so as to attempt to understand better not j u s t
what has happened but why i t has happened. Marrying the secular
expansion of Zimbabwe's manufacturing sector with p o l i t i c a l
developments and observing (not s u r p r i s i n g l y ) that the growth of
the sector has been c l o s e l y l i n k e d to the pattern of GDP growth
suggests that major p o l i t i c a l d i s r u p t i o n and uncertainty have
been both a cause of d i s r u p t i o n i n the progress of the manuf
a c t u r i n g sector and a prelude to f u r t h e r growth. On three
separate occasions - p r i o r to the Federation, p r i o r to UDI
( i n c l u d i n g the d i s r u p t i v e period surrounding the ending of the
Federation i n 1963) and p r i o r to Independence - i n d u s t r i a l growth
slowed and/or d e c l i n e d and then expanded, a l b e i t most h e s i ­
t a t i n g l y i n the post-Independence period. While on each occasion
the subsequent expansion which occurred was associated with a
r i s e i n aggregate growth, and so could be seen i n part as demandl
e d , very d i f f e r e n t i n f l u e n t i a l f a c t o r s came i n t o play i n each of
these periods.
The establishment of the Federation created a large and
protected market f o r Zimbabwe's manufactured products: manufactured
exports to Zambia and Malawi increased f i v e f o l d i n the
10 year period of the Federation and by 1964/65 accounted for 19%
of gross manufactured output compared with 11% i n 1953. But an
expanded domestic and captive "export" market were not the only
f a c t o r s favourable to expansion. Increased s e t t l e r immigration
during the post-war period, e s p e c i a l l y i n the l a t e 1940s and
e a r l y 1950s, brought a new i n j e c t i o n of s k i l l s to the economy
which, together with a r a p i d l y modernised i n f r a s t r u c t u r e and the
a l r e a d y - e s t a b l i s h e d i r o n and s t e e l works, added to the favourable
environment f o r expansion. This, together with the p o l i t i c a l
optimism of the e a r l y years of the Federation and the absence of
fears of p r i v a t e sector n a t i o n a l i s a t i o n or i n h i b i t i o n s to
generous p r i v a t e company p r o f i t r e p a t r i a t i o n , provided the
climate f o r a f a p i d i n f l o w of f o r e i g n p r i v a t e ( l a r g e l y B r i t i s h -
based) c a p i t a l . There were other external f a c t o r s which provided
a p o s i t i v e i n f l u e n c e for i n d u s t r i a l expansion at t h i s time. These
included the 1948 e l e c t i o n v i c t o r y by the National Party i n South
A f r i c a which p r e c i p i t a t e d some c a p i t a l f l i g h t northwards across
the Limpopo, the severing of Indian t i e s with South A f r i c a

leading to the establishment of t e x t i l e f a c t o r i e s i n Zimbabwe to
supply the South A f r i c a n market i n d i r e c t l y and the 1948 Customs
Agreement with South A f r i c a which was favourable to Zimbabwe's
f u r t h e r i n d u s t r i a l expansion, e s p e c i a l l y of consumer good exports
to the south'2 . In short, demand and supply f a c t o r s were both
extremely favourable f o r manufacturing expansion.
In contrast with the Federal period, the s t a r t of the UDI
era produced a s e r i e s of p o t e n t i a l l y adverse f a c t o r s f o r the
health of the manufacturing sector. Economic sanctions not only
l e d to the cessation of trade with the l u c r a t i v e former Federal
t e r r i t o r i e s , i t r a i s e d the costs of inputs and c a p i t a l imports to
the sector and reduced the competitiveness of those exports the
country was able to s e l l " . Sanctions also created an adverse
climate f o r f o r e i g n investment and l i t t l e s u b s t a n t i a l new f o r e i g n
investment i n manufacturing took place except from South A f r i c a n
sources, while an extensive and more comprehensive p r i c e c o n t r o l
system was introduced, reducing f u r t h e r i n c e n t i v e s f o r domestic
manufacturing expansion'".
That r a p i d manufacturing expansion took place, e s p e c i a l l y i n
the 1956-74 period, reveals that the adverse c o n s t r a i n t s , j u s t
l i s t e d , were e i t h e r not of major i n f l u e n c e or else that they were
e c l i p s e d by other more favourable i n f l u e n c e s . These l a t t e r
f a c t o r s included the f o l l o w i n g : the i n t r o d u c t i o n of a comprehensive
system of f o r e i g n exchange c o n t r o l which not only
prevented the importation of manufactured products made domestic
a l l y but provided f o r e i g n exchange f o r the manufacture of import
s u b s t i t u t e s ; the f r e e z i n g of f o r e i g n p r o f i t s and dividends of
non-South A f r i c a n companies c r e a t i n g the " i n c e n t i v e " to r e i n v e s t
p r o f i t s and d i v e r s i f y production; the d i v e r s i f i c a t i o n of commerc
i a l a g r i c u l t u r a l production which encouraged the expansion of
food and cotton processing and, f i n a l l y , the i n t r o d u c t i o n of
export i n c e n t i v e s to encourage export expansion and d i v e r s i f i ­
c a t i o n " . To t h i s needs to be added the sense of u n i t y and
s o l i d a r i t y among the s e t t l e r community which provided the drive
and i n c e n t i v e to d i v e r s i f y , i n v e s t and engage i n widespread
sanctions-busting operations''.
What, then, led to the post-1974 i n d u s t r i a l c o n t r a c t i o n -
the worst to take place i n 30 years - when the basic macroframework
of i n c e n t i v e s e s t a b l i s h e d i n the post-1965 period
remained i n place? There i s l i t t l e doubt that the war, which
grew i n i n t e n s i t y i n the 1974-79 period, played a major part.
Not only d i d t h i s lead to a squeeze on non-defence and r e l a t e d
expenditure but, more importantly f o r manufacturing, the war led
to the m i l i t a r y c a l l - u p of white c i v i l i a n s f o r up to Tialf the
year which, with the spread of h o s t i l i t i e s to more of the
country, encouraged a r a p i d e s c a l a t i o n i n net white emigration'?.
The r e s u l t , combined with a s e r i e s of poor a g r i c u l t u r a l seasons
themselves exacerbated by the e s c a l a t i o n of the r u r a l war, was a
f a l l i n domestic purchasing power and an increase i n s k i l l
shortages across the economy. This i n turn occurred i n conj
u n c t i o n with the i n t e r n a t i o n a l r i s e i n o i l p r i c e s - t r e b l i n g
Zimbabwe's o i l b i l l i n three years and i n c r e a s i n g i t s share of
t o t a l imports from 7% to 22% from 1973 to 1977 - which lead to a

drop i n imports required by the manufacturing sector. The
o v e r a l l e f f e c t s were a s u b s t a n t i a l drop i n domestic demand for
manufactures'8 , a squeeze on imported intermediate and c a p i t a l
inputs and a s u b s t a n t i a l f a l l i n manufacturing investment ( a f t e r
1975) r e s u l t i n g i n a r a p i d b u i l d up of blocked but unused surplus
p r o f i t s of f o r e i g n companies.
These i n f l u e n c e s , however, need also to be seen i n the
longer term context of the s t r u c t u r a l changes o c c u r r i n g w i t h i n
manufacturing p a r t i c u l a r l y i n r e l a t i o n to the balance of payments.
The d i s c u s s i o n i n pages 18-22, above, reveals the
i n c r e a s i n g f o r e i g n exchange dependence of manufacturing growth
and the decreasing part played by manufactured exports i n the
economy from the 1950s r i g h t through to the mid-1970s. There can
be l i t t l e doubt that these changes l e d to an i n c r e a s i n g i n a b i l i t y
of the sector to respond to the o v e r a l l and more r a p i d balance of
payments c o n s t r a i n t s which confronted the economy a f t e r the mid-
1970s''. I t was these i n f l u e n c e s together with the war and o i l -
r e l a t e d e x t e r n a l l y - i n d u c e d f a c t o r s which swamped the impact of
the p o l i c i e s and i n c e n t i v e s f o r manufacturing s t i l l i n place from
the mid-1960s, and which had created the record l e v e l s of
manufacturing expansion achieved i n the f i r s t nine years of the
UDI period.
Since 1979, the growth of the manufacturing sector has been
renewed even i f the annual pattern has been more v o l a t i l e than i n
previous p o s t - c r i s i s periods and, i n t h i s instance, o v e r a l l
c o n t r a c t i o n occurred between 1982 and 1984. What f a c t o r s have
played a dominant r o l e i n manufacturing i n t h i s most recent
period? C l e a r l y the r a p i d ending of the war, the cessation of
i n t e r n a t i o n a l sanctions, inflows of f o r e i g n a i d and a dramatic
r i s e i n f o r e i g n borrowings, a l l leading to a s u b s t a n t i a l easing
of the f o r e i g n exchange c o n s t r a i n t and a r a p i d growth i n domestic
demand, were major i n f l u e n c e s i n r a i s i n g both manufacturing
growth l e v e l s and investment i n the sector^". Perhaps s u r p r i s ­
i n g l y , however, t h i s r a p i d expansion took place with s t i l l
s u b s t a n t i a l emigration of s k i l l e d (white) personnel, i n d i c a t i n g
that, at that time, i t was the politico-economic climate i n c l u d ­
ing low l e v e l s of domestic demand and the f o r e i g n exchange
shortage which were the more s i g n i f i c a n t i n f l u e n c e s on the
performance of the manufacturing sector.
Also of major importance i s the f a c t that with the ending of
sanctions the renewed expansion of manufacturing exports simply
did not occur during the e a r l y post-Independence (1980-83)
period; indeed the f a l l i n the r a t i o of manufacturing exports to
gross manufacturing output and i n proportion of manufactured to
t o t a l exports^' i s one of the most s t r i k i n g features of t h i s
p a r t i c u l a r period. Five f a c t o r s seem to have influenced t h i s
p a r t i c u l a r development; f i r s t was the r a p i d r i s e i n domestic
demand for manufactured products; second was the increased
shortage of f o r e i g n exchange required f o r exporting; t h i r d was
the ignorance of exporters and p o t e n t i a l exporters of how to
conduct export business outside the hothouse atmosphere of
sanctions-busting and close t i e s with former f r i e n d , but now
l a r g e l y h o s t i l e . South A f r i c a ; f i f t h , and f i n a l l y , was the

Table 12
Factors Constraining Industrial Expansion in Zimbabwe,1981-87
Question: What factors are currently affecting production?
% of respondents reporting output inhibited
Constraint 1987* 1986 1985 1984 1983 1982 1981
Domestic Demand 27 31 32 69 73 48 57
Import quotas 83 76 66 55 65 67 56
Raw materials 73 62 46 42 45 45 36
Export demand 14 20 16 20 26 27 21
Skilled factory staff 14 18 9 17 27 37 48
Plant capacity 12 12 7 4 8 14 37
Working capital 3 7 7 15 12 9 5
Executive staff 4 5 6 3 7 11 7
Question: What w i l l limit capital expansion over next 12 months?
% of respondents reporting constraint
Constraint 1987++ 1987*** •1987** 1986 1985 1984+
Inadequate return on
proposed investment 36 45 42 38 45 55
Shortage of internal
finance 13 13 16 22 30 34
Inability to raise
external finance 24 26 24 23 23 27
Cost of finance 12 17 16 14 22 25
Demand uncertainty 25 37 31 30 39 57
Lack of skilled staff 10 12 11 10 8 13
Other 28 29 35 31 22 17
Motes: * June. ** March, *** July, + November, ++ November.
Source: University of Zimbabwe, "Business Opinion Survey" (1982-87);
Confederation of Zimbabwe Industries, "State of the Manufacturing
Sector, Tri-annual Survey, August 1986 to July 1987.
i n i t i a l removal of the pre-Independence export i n c e n t i v e for
manufacturers. That these f a c t o r s were important and i n f l u e n t i a l
i s borne out by the post-1983 i n i t i a t i v e s to revive and expand
manufactured exports. The g r e a t l y enlarged export r e v o l v i n g fund,
which provided guaranteed access to f o r e i g n exchange, a package
of new tax-reducing export i n c e n t i v e s and s u b s t a n t i a l e f f o r t s to
f i n d new markets l e d to a 68% expansion i n " n o n - t r a d i t i o n a l "
manufactured exports i n 1984 and a f u r t h e r increase of 33% i n
19856 2 .

Beyond these measures, however, perhaps the most s t r i k i n g
feature of the post-Independence period has been the c o n t i n u i t y
i n p o l i c y towards the manufacturing sector with the UDI period:
p r i c e and f o r e i g n exchange c o n t r o l s have remained f i r m l y i n place
and the same system has operated i n r e l a t i o n to new project and
replacement c a p i t a l investments r e q u i r i n g f o r e i g n exchange''. I t
i s i n t h i s general context that manufacturing expansion has
occurred and, more r e c e n t l y , that manufactured exports ( a l b e i t
from a low base-point) have begun to expand once more.
We look, f i n a l l y and b r i e f l y i n t h i s s e c t i o n , at the array
of f a c t o r s which manufacturers themselves consider to be the most
important i n c o n s t r a i n i n g expansion of the sector. Table 12
reproduces the r e s u l t s from recent sector-wide surveys over the
past few years. While the r e p l i e s r e v e a l the importance of
f o r e i g n exchange, domestic demand, p r i c e c o n t r o l s and s k i l l s
c o n s t r a i n t s i n r e s t r i c t i n g output expenditure and c a p i t a l
investment, the importance of each of these c o n s t r a i n t s have
d i f f e r e d markedly from one year to the next.
If there i s one lesson to be l e a r n t from these r e s u l t s - and
from the previous d i s c u s s i o n - i t i s that the manufacturing
sector i s h i g h l y complex, being i n f l u e n c e d by various f a c t o r s i n
d i f f e r e n t ways and i n d i f f e r e n t circumstances. C l e a r l y , then,
d e v i s i n g new p o l i c i e s f o r i t s sustained expansion i s going to be
no easy task.

I I I . SUCCESS AND FAILURE AT THE MICRO-LEVEL"
We now move away from the broad macro-analysis of i n d u s t r i a l
performance to more d e t a i l e d micro-data. In t h i s s e c t i o n we use
some f i r m l e v e l evidence, gathered i n mid-1987, to attempt to
throw l i g h t on the main f a c t o r s i n f l u e n c i n g performance''. The
purpose here i s to h i g h l i g h t those f a c t o r s c o n t r i b u t i n g to
success or f a i l u r e of p a r t i c u l a r firms. While, c l e a r l y , "success"
and " f a i l u r e " can be evaluated d i f f e r e n t l y depending upon
the norms chosen, i n conjunction with the t h r u s t of the previous
sections of t h i s paper more emphasis i s placed here upon the
a b i l i t y of firms to compete both on the domestic and, more
p a r t i c u l a r l y , i n the i n t e r n a t i o n a l market.
3.1 Manufacturers of A g r i c u l t u r a l Implements
We s t a r t with three firms a l l located i n a branch of subsector
9, Metals and Metal Products, which manufacture a g r i c u l ­
t u r a l implements. They are a l l e n t i r e l y p r i v a t e firms. Zimplow
and Bulawayo Steel Products are the only two firms i n the country
manufacturing a range of hand-tools and animal-drawn implements
while Tinto I n d u s t r i e s i s by f a r the l a r g e s t of the firms making
machine-drawn implements, being responsible f o r some 80% of the
domestic market^'. There are eight main manufacturers of
a g r i c u l t u r a l implements i n Zimbabwe with a t o t a l turnover i n 1985
of some $17 mn of which these three firms are responsible for
over 90%.
Using the c r i t e r i o n of the 1982 DRC scores, i t would appear
that these firms would be judged among the most e f f i c i e n t i n the
country: the average DRC score f o r a g r i c u l t u r a l implement
manufacturers was 0.91, ranging from a low of 0.40 to a high of
only 1.12, the average f a l l i n g to an extremely competitive 0.73
i f account i s taken of the overvalued d o l l a r r a t e . What i s more,
i n 1982 a l l three firms were exporting each with sales of over
$100,000, while published r e s u l t s from Zimplow showed a posttax
p r o f i t / t u r n o v e r r a t i o of 9% and from T i n t o I n d u s t r i e s of
some 6%. Beyond 1982, developments appeared to confirm t h i s
b u l l i s h assessment as both turnover and exports continued to
expand: by the mid-1980s Tinto I n d u s t r i e s were exporting
products to the value of between $1 mn and $2 mn a year, Zimplow's
exports t r e b l e d from 1982 to 1986, reaching an average of 24%
of turnover i n the years 1984 to 1986 and by 1985 Bulawayo Steel
Products were exporting 45% of production^''.
These data and assessment, however, at best give'an extremel
y d i s t o r t e d and at worst a t o t a l l y f a l s e p i c t u r e of the longer
term v i a b i l i t y of the firms i n question. Zimplow and Bulawayo
Steel Products argue that i n the e a r l y 1980s t h e i r respective
firms were i n such serious d i f f i c u l t i e s that i t was quite l i k e l y
that both could have folded, while from 1982 to 1983 Tinto
I n d u s t r i e s ' s p r o f i t of $826,000 turned i n t o a l o s s of $11,000 and
the company suffered serious f i n a n c i a l d i f f i c u l t i e s over the next
few years^ ^ .

The main d i f f i c u l t i e s f a c i n g Zimplow and Bulawayo Steel
Products have revolved around three f a c t o r s : the nature of the
products they have been engaged predominantly i n manufacturing,
t h e i r management and, f i n a l l y , the i n s t i t u t i o n a l p o l i c y environment.
Both firms began^' by making and are s t i l l predominantly
dependent upon supplying the more simple range of a g r i c u l t u r a l
implements and hand t o o l s to the Zimbabwean market. Their sales
volumes therefore l i e outside t h e i r grasp and c o n t r o l : when the
country s u f f e r s from drought - as i t d i d i n 1982-84 and 1985-6-
domestic sales f a l l d r a m a t i c a l l y . On the supply side, because
some 90% of raw materials ( l a r g e l y l o c a l s t e e l ) i s supplied
domestically, dependence of these two firms on import a l l o c a t i o n s
i s s m a l l ' " . Nonetheless, although production i s f a i r l y labour
i n t e n s i v e , c e r t a i n pieces of machinery (presses and forges etc.)
have had to be imported and both the age of machinery and the
shortage of spares have had an i n c r e a s i n g l y adverse e f f e c t on
both p r o d u c t i v i t y and product q u a l i t y ' ' .
U n t i l r e c e n t l y , however, none of these issues nor comparat
i v e l y poor management have challenged the v i a b i l i t y of the firms
i n question which have been able to maintain s a t i s f a c t o r y ( a l b e i t
not very high) p r o f i t l e v e l s and without e x e r t i n g much e f f o r t at
expanding i n t o the export market. In s p i t e of only these two
firms supplying the domestic market, a s u f f i c i e n t l y "competitive"
environment e x i s t e d to keep costs down and deter p r i c e - f i x i n g
c o l l u s i o n , while s i m i l a r management and engineering c a p a b i l i t i e s
led to "adequate" l e v e l s of p r o d u c t i v i t y and product q u a l i t y on
the f a c t o r y f l o o r ' ^ . There was, however, no p r i c e or p r o f i t
r e l a t e d i n c e n t i v e f o r e i t h e r f i r m r a d i c a l l y to improve product
i v i t y . The o v e r a l l s e t t i n g was a p r i c e c o n t r o l system which
allowed p r i c e r i s e s to be passed on to the domestic consumer i n
l i n e with r i s e s i n inputs i n the normal cost-plus manner. There
was l i t t l e i n c e n t i v e to keep p r i c e s down or to improve r a d i c a l l y
on product q u a l i t y or p r o d u c t i v i t y . In s p i t e of often quite
dramatic v a r i a t i o n s i n the l e v e l of domestic demand, plant s i z e ,
the p r i c e regime and d i f f i c u l t i e s of exporting to independent
A f r i c a provided no s u b s t a n t i a l i n c e n t i v e to expand s i g n i f i c a n t l y
i n t o the export f i e l d . Nonetheless, the f a c t that exporting
(mostly to South A f r i c a during the l a t t e r UDI years) d i d take
place i n d i c a t e s that the i n s t i t u t i o n a l framework and the product
i v e system d i d ( i n t h i s instance) enable these two firms to
remain broadly i n t e r n a t i o n a l l y competitive (as confirn^ed by the
DRC data). Over the longer term, however, the -^naintenance of
t h i s p o l i c y environment would almost c e r t a i n l y have done l i t t l e
more than lead to a widening between domestic and i n t e r n a t i o n a l
p r i c e s , next to no improvement i n product q u a l i t y and i f there
was to be export trade i t would have to be financed i n c r e a s i n g l y
from higher domestic p r i c e s ' ' .
I r o n i c a l l y , i n p r a c t i c e i t was neither the growing pressures
for greater l i b e r a l i s a t i o n from i n t e r n a t i o n a l agencies nor the
dramatic cuts i n f o r e i g n exchange a l l o c a t i o n s :that a f f e c t e d
adversely so many manufacturers i n the mid-1980s) which uncovered
the v u l n e r a b i l i t y and economic precar iousness of t.^.ese two firms.
Rather i t was a l t e r i n g the p r i c e c o n t r o l mechanise Un e s s e n t i a l
part of the UDI i n s t i t u t i o n a l framework for ir.anufacturing) which

quite r a p i d l y exposed both the long term weaknesses of the firms
and of the p o l i c y environment under which they had operated f o r
so many years.
A f t e r Independence the costs of inputs across the whole of
the manufacturing sector began to r i s e more r a p i d l y , due l a r g e l y
to increases i n the minimum wage, the f a l l i n g value of the
Zimbabwe d o l l a r and to other s p e c i f i c p r i c e increases, part
i c u l a r l y for f u e l and e l e c t r i c i t y and s t e e l . At the same time
the i n s t i t u t i o n a l p r i c e c o n t r o l mechanism was tightened and
extended such that f o r most of the leading products manufactured
by both Zimplow and Bulawayo Steel Products s p e c i f i c p r i c e
increase a p p l i c a t i o n s had not only to be made but they were
subject to Cabinet approval. This need f o r both more s p e c i f i c
and f o r higher p r i c e increase a p p l i c a t i o n s occurred at a time
when the Government was focussing i t s economic p o l i c i e s on two
p a r t i c u l a r o b j e c t i v e s : on the one hand working to keep down
p r i c e s of goods purchased by low income r u r a l groups ( i n c l u d i n g
simple hand and a g r i c u l t u r a l implements) and, on the other hand,
increased determination to check what i t perceived as the
e x c e s s i v e l y high p r o f i t l e v e l s of p r i v a t e companies'". The
r e s u l t was that from 1981 onwards. Government awarded p r i c e
increases f a r lower both than those requested and than those
required to accommodate the r i s e i n input costs''. The immediate
e f f e c t s were c l e a r l y an erosion i n p r o f i t l e v e l s ' ^ . What i s of
more i n t e r e s t from a p o l i c y perspective i s the e f f e c t that t h i s
p r o f i t squeeze had on the companies: quite r a p i d l y i t exposed
weaknesses and i n e f f i c i e n c i e s which i n these instances at l e a s t
led to the adoption of more c o s t - e f f e c t i v e production methods.
The immediate response of both companies to the p r o f i t s
squeeze and the drought-induced f a l l i n domestic demand was
vigorously to expand i n t o the export market. This was s u c c e s s f u l
inasmuch as export sales went up - Zimplow's exports doubled to
$700,000 from 1982 to 1984, while Bulawayo S t e e l Products exports
rose from 25% to 50% of t o t a l production by 1985 i n c l u d i n g the
export of $1 mn of goods to Zambia i n 1985. However from a cost
point of view, the strategy would appear to have been fool-hardy
- i n some instances products were exported at l e s s than the
marginal costs of production and i n others the marginal costs
were covered but, of course, with domestic p r o f i t margins
squeezed, the t r a d i t i o n a l subsidy of the domestic market had been
cut s u b s t a n t i a l l y . I t was i n t h i s context, with Zimplow r e t u r n ­
ing s u b s t a n t i a l absolute losses and Bulawayo Steel Products, i n
the words of the current Managing D i r e c t o r , "gradually going
under", that the management of both companies was replaced.
The changes w i t h i n each f i r m were dramatic: f a c t o r i e s were
r a d i c a l l y reorganised with production l i n e s a l t e r e d from a s e r i e s
of separate and unco-ordinated operations to a continuous f l o w
system; more r a p i d throughput meant that stock l e v e l s could be
reduced; s t a f f t r a i n i n g education was i n i t i a t e d to upgrade
workers and i d e n t i f y p a r t i c u l a r tasks i n the o v e r a l l production
process; new s k i l l e d s t a f f were employed on the shop-floor,
leading to higher q u a l i t y products being produced and to improved
designs of t r a d i t i o n a l l i n e s . The r e s u l t was that i n the space

of a year or two, p r o d u c t i v i t y l e v e l s were r a i s e d by as much as
25% with e i t h e r no or only marginal increases i n c a p i t a l employed.
In short, the squeezing of p r o f i t margins induced the most
dramatic increases i n manufacturing e f f i c i e n c y that the firms
had experienced i n 15 to 20 years - an adjustment that would
probably not have occurred (at l e a s t with such r a p i d i t y ) i n the
absence of the government-induced domestic p r i c e squeeze and
complementary export i n c e n t i v e s .
Another p o s i t i v e outcome has been an expansion i n the
product range of the two firms; f o r instance Bulawayo Steel
Products i n the l a s t year or so have begun to manufacture of
forged wheel nuts, traclt rod ends for Nissan Sunny cars, s p e c i a l ­
i s e d plant flanges and s p e c i a l types of studs. However t h i s
b e n e f i c i a l outcome i n part has been the r e s u l t of an extremely
negative e f f e c t of the p r a c t i c a l worthing of the p r i c e c o n t r o l
system. Current l e g i s l a t i o n controls the p r i c e s of s p e c i f i c
products manufactured, not the range of goods which f a c t o r i e s
manufacture. Two d i r e c t l y p r i c e - c o n t r o l l e d products are axes and
pic!

3.2 Inadequacies of p r i c e s as a basis f o r p o l i c y
implementation
There are f u r t h e r lessons to be l e a r n t from f i r m - l e v e l experience
about the p o l i c y context f o r manufacturing. In part
i c u l a r , the evidence shows quite s t a r k l y that to attempt to
r e s t r u c t u r e the sector towards f u r t h e r export o r i e n t a t i o n by
removing c o n t r o l s and r e l y i n g on the e f f e c t s of i n t e r n a t i o n a l
market and p r i c e forces would be an extremely fool-hardy course
of a c t i o n to f o l l o w . This can be i l l u s t r a t e d i n i t i a l l y i n
r e l a t i o n to a g r i c u l t u r a l implement exporters.
Zimplow and Bulawayo S t e e l Products c u r r e n t l y export to a
range of A f r i c a n countries i n c l u d i n g the SADCC s t a t e s , Uganda,
Sudan and South A f r i c a . Simply on the basis of p r i c e d i f f e r e n ­
t i a l s , the numbers i n d i c a t e that Zimbabwe should not be exporting
to most of these markets because as a r u l e i t s p r i c e s are higher
than i t s competitors. To take one example, India can land hoes
i n Uganda f o r $33 whereas the ex-factory p r i c e of Zimbabwean hoes
i n mid-1987 was $42. This d i f f e r e n t i a l i n large part i s due to
the 120% export i n c e n t i v e a v a i l a b l e to Indian hoe manufacturers
which undercuts the Zimbabwean p r i c e . In s p i t e of t h i s wide
p r i c e d i f f e r e n t i a l , Zimbabwean products are s t i l l i n demand and
are being imported. The reasons revolve around the f o l l o w i n g
f a c t o r s : b e t t e r d e l i v e r y time, b e t t e r q u a l i t y products, better
a f t e r - s a l e s s e r v i c e and the f a c t that the Zimbabwean product i s
w e l l known, t r i e d and tested i n these markets. Reversing the
b l i n d "export at any p r i c e " p o l i c y of the l a s t few years,
Bulawayo S t e e l Products reports that i n recent months i t s export
sales have gone up i n volume terms while i t s p r i c e s have also
been r i s i n g ' ' . There seems, a d d i t i o n a l l y , to be l e s s concern
than one might expect that B r a z i l i a n hoes are c u r r e n t l y being
imported by Mozambique at a cost 20-30% lower than Zimbabwean
ones: Zimbabwean firms remain confident that the lower q u a l i t y
of the B r a z i l i a n product w i l l soon lead to an end to the B r a z i l ­
ian competition^0.
There i s one, f i n a l lesson to be l e a r n t about i n t e r n a t i o n a l
competitiveness and p o l i c y to encourage export expansion from the
experience of Zimplow and Bulawayo Steel Products and i t concerns
consistency. The major p h y s i c a l input i n the manufacture of
a g r i c u l t u r a l implements i s s t e e l and Zimbabwe's ZISCO s t e e l
provides t h i s basic component not only domestically but also
r e g i o n a l l y . At present, and consistent with p r a c t i c e s t r e t c h i n g
back over a number of years, the p r i c i n g p o l i c y of ZISCO generall
y involves charging the domestic customers of i t s products a
higher p r i c e than i t charges export customers. While t h i s has
the p o s i t i v e e f f e c t of encouraging immediate f o r e i g n exchange
maximisation, even i f at the cost of r a i s i n g the p r i c e to
domestic consumers, an important i n d i r e c t e f f e c t i s to reduce the
i n t e r n a t i o n a l competitiveness of export products made with the
higher-priced ZISCO s t e e l . In mid-1987, Zimplow and Bulawayo
Steel Products had to purchase ZISCO s t e e l at the p r i c e of $550 a
tonne. This same s t e e l was exported to a r i v a l company, Agrimol

i n Malawi^1, which produces implements of s i m i l a r q u a l i t y , at the
p r i c e of $150 a tonne - one t h i r d of the p r i c e Zimbabwean
purchasers have to pay to obtain the same product'2. C l e a r l y the
more extensive d i f f e r e n t i a l p r i c i n g and the more i n t e g r a t e d
industry i n Zimbabwe become, the greater w i l l be both the impact
of these sorts of anomalies and also the a b i l i t y to counterbalance
them by a d m i n i s t r a t i v e f i a t .
Tinto I n d u s t r i e s also provides two examples of the inadequacy
of comparative p r i c e data as the basis f o r determining
t r a d e - r e l a t e d p o l i c y f o r the manufacturing sector. The mid-1987
domestic p r i c e of the mainstream machine-drawn products manufactured
by the f i r m are estimated to have been between 10% to
15% higher than the landed cost of foreign-made a l t e r n a t i v e s . In
s p i t e of t h i s s u b s t a n t i a l d i f f e r e n t i a l , Tinto I n d u s t r i e s would
have few o b j e c t i o n s to import r e s t r i c t i o n s on s i m i l a r products
being l i f t e d and Zimbabwean farmers being given the choice of
buying the imported rather than the domestically-produced
product. The reason i s that l o c a l farmers w e l l know that the
Zimbabwean product i s of a far higher q u a l i t y , made f o r l o c a l
c o n d i t i o n s , engineered to plough to a greater depth and to handle
rougher s o i l s ^ ' . On the other hand, the use of heavier domestic
a l l y - u s e d s t e e l s provides a d i s i n c e n t i v e f o r expanding exports
outside the central/southern A f r i c a n region where (for example i n
West A f r i c a ) s o i l s tend to be l i g h t e r and the l e s s durable non-
Zimbabwean product would be p r e f e r r e d even i f i t were p r i c e d more
c o m p e t i t i v e l y .
F i n a l l y on the export f r o n t i s an instance of the l o s s of a
major market which had been acquired i n s p i t e of a s u b s t a n t i a l
lack of p r i c e competitiveness. U n t i l r e c e n t l y Tinto I n d u s t r i e s
had a major export market valued at some $2 1/2 mn i n Tanzania
even though i t s products were p r i c e d 40% higher than the competit
i o n . However i n 1985/86 r e a l i s i n g that with a massive increase
i n domestic demand for i t s products i t would not be able to
f u l f i l both domestic and a l l i t s export orders, the f i r m decided
to forego the export side of i t s business i n order to meet the
(more l u c r a t i v e ) domestic market dems^nd. The r e s u l t was that the
Tanzanian market has now been l o s t to B r a z i l and i t w i l l take f a r
more than attempting to narrow p r i c e d i f f e r e n t i a l s to win that
market back again to Zimbabwe - r e l i a b i l i t y i n d e l i v e r y being one
of the reasons f o r the Tanzanians being w i l l i n g to purchase the
h i g h e r - p r i c e d product.
Despite t h i s i n c i d e n t , Tinto I n d u s t r i e s do have the in-house
research, development and engineering c a p a c i t y to introduce,
develop and adapt products for the r e g i o n a l as w e l l as domestic
market. At the present time, however, the firm's a b i l i t y to
expand exports i s severely constrained - not p r i n c i p a l l y ( i n many
of i t s p o t e n t i a l markets) because of wide p r i c e d i f f e r e n t i a l s
v i s - a - v i s i t s i n t e r n a t i o n a l competitors but rather because i t s
p o t e n t i a l customers simply do not have the f o r e i g n exchange to
purchase the goods they would l i k e to buy.
The inadequacy of using p r i c e s i g n a l s as the major p o l i c y
determinant i n i n d u s t r i a l r e s t r u c t u r i n g i s i l l u s t r a t e d by

discussions held with a wide range of i n d u s t r i a l i s t s across
d i f f e r e n t sub-sectors. Two f i n a l examples i l l u s t r a t e t h i s point.
The f i r s t concerns Hunyani, one of the two leading, and p r i ­
vately-owned, manufacturers of paper and paper products i n the
country'". According to the 1982 DRC c a l c u l a t i o n s , Hunyani's
leading manufacturing u n i t s were deemed uncompetitive and
i n e f f i c i e n t . (DRCs for the industry averaged 2.40 and were as
high as 5.93.) However, recent a n a l y s i s by the company i n d i c a t e s
that, p r i m a r i l y as a r e s u l t of labour r a t i o n a l i s a t i o n and c a p i t a l
investment, these f i g u r e s have become t o t a l l y i n a p p l i c a b l e ; i t i s
estimated that over the past f i v e years the number of man-units
per tonne of product manufactured has been halved. As Hunyani,
l i k e most manufacturers, has been subject to the same sort of
e f f e c t s of the p r i c e c o n t r o l l e g i s l a t i o n as the a g r i c u l t u r a l
implement manufacturers, discussed above, i t would appear that
the p r o f i t squeeze has had some s i m i l a r p o s i t i v e side-effects^» .
At present, i f r e s t r i c t i o n s on competitive imports were removed,
an average t a r i f f of some 30% would be needed by domestic
producers to compete with imports but, as events over the past
f i v e years i n d i c a t e , there i s the expectation w i t h i n the company
that u n i t costs could be brought down s t i l l f u r t h e r . The general
lessons appear to be s t r i k i n g l y s i m i l a r to those drawn from the
d i s c u s s i o n of the a g r i c u l t u r a l implement manufacturers: del
i b e r a t e i n t e r v e n t i o n i s t p o l i c i e s have helped to achieve r a p i d
and s u b s t a n t i a l adjustment and greater i n t e r n a t i o n a l i s t compet
i t i o n .
An examination of Hunyani's exports f u r t h e r i l l u s t r a t e s the
weakness of the b e l i e f i n u t i l i s i n g i n t e r n a t i o n a l p r i c e comparisons
as the major t o o l f o r determining e x t e r n a l trade
p o l i c i e s . South A f r i c a n paper manufacturers c o n s t i t u t e the major
competition to Hunyani w i t h i n the region and the average 30%
t a r i f f c u r r e n t l y needed to keep out imports of l i k e products i s
required l a r g e l y to prevent South A f r i c a n imports entering the
Zimbabwean market. Nonetheless, South A f r i c a i s i t s e l f an export
market f o r Hunyani's products i n s p i t e of i t s e l f f a c i n g a 10%
t a r i f f i n that market. The apparent anomaly a r i s e s because South
A f r i c a n firms, l i k e Zimbabwean firms, f r e q u e n t l y operate a twot
i e r p r i c i n g system with t h e i r domestic sales helping to subs
i d i s e t h e i r exports. In the case of a range of paper products,
Hunyani's exports are p r i c e d lower than the i n f l a t e d domestic
p r i c e p r e v a i l i n g i n South A f r i c a . In general, therefore, there
are at l e a s t two p r i c e d i f f e r e n t i a l s one would need to know
before judging whether Zimbabwean manufacturers were able to
compete on the i n t e r n a t i o n a l market.
The second case concerns c i g a r e t t e s . At present i n terms of
p r i c e , Zimbabwean c i g a r e t t e s are i n t e r n a t i o n a l l y competitive:
domestic p r i c e s are some 10% lower than border p r i c e s (net of
excise duty e t c . ) . However i f import r e s t r i c t i o n s were l i f t e d and
i n t e r n a t i o n a l competition were allowed, Zimbabwean manufacturers
would simply not be able to compete. This i s because the power
of i n t e r n a t i o n a l brand names so i n f l u e n c e s the d e c i s i o n to
purchase c i g a r e t t e s that even quite s u b s t a n t i a l p r i c e d i f f e r e n ­
t i a l s can be s u s t a i n e d ' A n d of relevance to the debate about

emoving exchange c o n t r o l s , i t would be quite p o s s i b l e f o r
Zimbabwe's c i g a r e t t e manufacturers to produce i n t e r n a t i o n a l
brands f o r domestic consumption, (they have the machinery and
s k i l l s ) but to do so, the patent holders would require i n t e r ­
n a t i o n a l standards f o r packaging, f i l t e r s , t i p s , paper and
cellophane wrappings. This would n e c e s s i t a t e importing these
items which f o r only one of the two major tobacco manufacturers,
Rothmans, would mean spending an a d d i t i o n a l $300,000 i n f o r e i g n
currency a month, or $3.6 mn a year.
3.3 Some Concluding Observations
In t h i s s e c t i o n some conclusions w i l l be drawn from the
previous d i s c u s s i o n . At a general l e v e l (confirmed by the
a n a l y s i s i n sections 2 and 3, above) there seems to be l i t t l e
dispute that at Independence Zimbabwe i n h e r i t e d an i n d u s t r i a l
base developed and expanded by an i n c e n t i v e s t r u c t u r e , establ
i s h e d during the UDI years, which protected and nurtured
domestic i n d u s t r y ' ' . That at the end of t h i s period much of
Zimbabwean i n d u s t r y emerged i n t e r n a t i o n a l l y competitive, or
nearly so, would seem to have been due to the f o l l o w i n g f a c t o r s :
f i r s t of a l l , the r e l a t i v e openness of the economy during the
Federal period encouraged the establishment of a wide range of
competitive i n d u s t r i e s at that time; second, domestic consumer
pressure f o r i n t e r n a t i o n a l l y - s u b s t i t u t a b l e products ( p a r t i c u l a r l y
on a par with many South A f r i c a n and B r i t i s h products) cont
r i b u t e d to the replacement of domestic goods; t h i r d , Zimbabwe
had i n place a s u f f i c i e n t s k i l l / e n g i n e e r i n g base to adapt
technology and production processes and make h i g h l y e f f i c i e n t use
of f o r e i g n exchange f o r c a p i t a l investment - frequently by
purchasing adequate second-hand equipment. F i n a l l y , i t had a
s u f f i c i e n t l y - b e n e f i c i a l export i n c e n t i v e system to encourage
external trade, boosted by the more l u c r a t i v e gains from sanct
i o n s - b u s t i n g operations.
There was one a d d i t i o n a l and p o t e n t i a l l y important element
i n the c o n t r o l - l e d p r o t e c t i o n i s t system of the UDI period which
could have encouraged competition. I f a manufacturer or a
p o t e n t i a l manufacturer could prove to the f o r e i g n exchange
a u t h o r i t i e s that s/he was able to manufacture a product with a
lower f o r e i g n exchange outlay than the current holder of an
import l i c e n s e , then that l i c e n s e would be t r a n s f e r r e d to the
more e f f i c i e n t user of the f o r e i g n exchange. There i s , however,
l i t t l e evidence to show that t h i s p a r t i c u l a r mechanism was widely
used.
Together with adequate f o r e i g n exchange (provided i n the
main by expanded non-manufacturing exports) to import both
necessary inputs to manufacturing and c a p i t a l f o r import subs
t i t u t i o n and expanding productive capacity, the f a c t o r s r e f e r r e d
to above i n general worked during most of the UDI period to
counter a widening d o m e s t i c / i n t e r n a t i o n a l p r i c e d i f f e r e n t i a l and
high l e v e l s of i n e f f i c i e n c y u s u a l l y expected to r e s u l t from
expanding import s u b s t i t u t i o n under extreme p r o t e c t i o n i s t
p o l i c i e s . In the f i n a l 1974-79 recessionary/war period, a f a l l
i n domestic demand, greater s c a r c i t y of f o r e i g n exchange leading

to deep cuts i n import a l l o c a t i o n s and l o g i s t i c a l problems
d e t e r r i n g external trade a l l provided the context f o r aggregate
manufacturing sector c o n t r a c t i o n - At the f i r m l e v e l while t h i s
led to a f a l l i n p r o f i t s , a s u b s t a n t i a l curtailment i n i n v e s t ­
ment, a h a l v i n g of the value of the r e g i s t e r e d nominal c a p i t a l of
new manufacturing companies and more than a doubling of the
number of companies struck off the company r e g i s t e r , the adverse
business climate i n part was cushioned by manufacturers, even
some of those subject to more s p e c i f i c p r i c e c o n t r o l r e g u l a t i o n s ,
being able to increase t h e i r s e l l i n g p r i c e s i n the knowledge that
t h e i r market was protected from external competition""- What
t h i s suggests i s that Zimbabwe's i n h e r i t e d p r o t e c t i o n i s t environment
was b e t t e r able to encourage a more i n t e r n a t i o n a l l y e f f i ­
c i e n t manufacturing base i n times of expansion rather than i n a
period of c o n t r a c t i o n - And i t was thus only i n the l a t t e r period
when the normal, market-related, i n d i c a t o r s of f i r m - l e v e l success
began to be l e s s i n d i c a t i v e of longer term v i a b i l i t y that the
s u r v i v a l of high cost and i n e f f i c i e n t firms became a more
worrying issue which i n c r e a s i n g l y needed to be addressed.
But what can be s a i d about the 1980s experience? Contrary
to much conventional opinion, the post-Independence period has
been a time when quite s u b s t a n t i a l adjustment has taken place
w i t h i n the manufacturing sector - as the f i r m - l e v e l evidence
discussed here r e v e a l s . While the system of i n s t i t u t i o n a l
c o n t r o l s has become more rather than l e s s extensive during the
1980s ( p a r t i c u l a r l y i n r e l a t i o n to the s e l l i n g p r i c e of manufactures)
t h e i r e f f e c t s have tended to make the sector more
rather than l e s s competitive; with t i g h t e r domestic p r i c e
c o n t r o l s manufacturing exports have begun to expand again while
as the case studies reveal changes, e s p e c i a l l y i n management
p r a c t i c e , have led to some s u b s t a n t i a l increases i n p r o d u c t i v i t y
and reductions i n u n i t costs. Nor have these changes been
p a i n l e s s as nearly 10% more firms have been e i t h e r l i q u i d a t e d or
struck off the company r e g i s t e r i n the f i v e years a f t e r Independence
than i n the troubled f i v e years p r i o r to Independence''.
What i s more, there i s l i t t l e to suggest that the removal of
c o n t r o l s and the e x c l u s i v e use of the p r i c e mechanism to encourage
or discourage f i r m and sub-sectoral l e v e l expansion would
have l e d to a more r a p i d or more favourable process of adjustment
.
To argue, however, that a g e n e r a l l y favourable process of
adjustment has taken place should by no means be taken as
advocacy f o r a perpetuation of these p o l i c i e s i n the future-
There i s no doubt that severe and growing f o r e i g n exchange
shortages and i n c r e a s i n g l y widespread p r o f i t l e v e l s , which are so
low that both replacement and new investment have dropped'to
dangerously low l e v e l s , present policy-makers with fundamental
decisions which need to be taken - and q u i c k l y - i f sustained
manufacturing growth i s to continue and manufacturing exports are
to expand- And r e l a t e d to t h i s , the choice has to be made
whether manufacturing export growth should take place i n the
general context of attempts to narrow f u r t h e r the d i f f e r e n c e s
between i n t e r n a t i o n a l and domestic p r i c e s or of widening d i f -

f e r e n t i a l s and hence the domestic s u b s i d i s a t i o n of exports i n th
framework of extensive c o n t r o l s .
These issues w i l l be discussed f u r t h e r i n the second case
study paper on Zimbabwe. Now, we turn to a b r i e f examination o
the e v o l u t i o n and present status of the country's food sector.

IV. THE FOODSTUFFS SUB-SECTOR'°
In many respects, the e v o l u t i o n of the f o o d s t u f f s branch of
Zimbabwe's manufacturing sector has tended to f o l l o w the most
common pattern experienced i n developing countries as they have
i n d u s t r i a l i s e d : the branch's o v e r a l l c o n t r i b u t i o n to MVA has
f a l l e n over the longer term, fewer manufactured food products
have been imported as more have been produced at home ( o r i g i n a ­
t i n g from the a g r i c u l t u r a l sector) and most growth has occurred
as a r e s u l t of the r i s e i n domestic demand. This performance,
however, conceals some marl

Figure 13. Index of Industrial Production,Foodstuffs Sector,1964-86
130 -T
120 -
110 -
100 -
o
o
90 -
"[ 80 -
o 70 -
a
60 -
D
C
50 -
40 T
30 -
20 -
10 -
0 -1
Time perod in Years
+ MVA lr>d.(Fpxed Pr )
Source for
Figures 13 & 14: As f o r Figure 5, above
Figure 14. Sources of Growth,Foodstuffs Sector, 1952/53 to 1982/83.
z
1 9 5 2 / 3 - 8 2 / 3
1 9 5 2 / 3 - 6 4 / 5 1 9 6 4 / 5 - 7 8 / 9 1 9 7 8 / 9 - 8 2 / 8 3
1/ /I Domestic dcn^nd
IV^ Exports Imp, Subsl.

sectors was s t a t i c or else when i t contracted. Third, the
s e v e r i t y of the poor o v e r a l l 1981-83 performance of the manuf
a c t u r i n g sector i s h i g h l i g h t e d p a r t i c u l a r l y , r e v e a l i n g that by
1983 the r a t i o had r i s e n to 17% - a l e v e l i t had not p r e v i o u s l y
achieved since the l a t e 1940s!
Those i n d i c a t o r s r e v e a l i n g perhaps the most s i g n i f i c a n t
changes i n the f o o d s t u f f s sub-sector and i n the food import
dependence of the country as a whole are those f o r long run food
exports, gross output and manufactured food imports. The s t o r y
i s simply and c l e a r l y t o l d i n Figures 16 and 17. In 1938/39,
over 40% of a l l manufactured exports o r i g i n a t e d i n the f o o d s t u f f s
sub-sector. Then, as shown i n Figure 16, t h i s proportion
s t e a d i l y and c o n s i s t e n t l y f e l l over the 25 years to the s t a r t of
the UDI period. The top l i n e , showing the r a t i o of a l l manufactured
food exports to t o t a l manufactured exports, then r i s e s
s l i g h t l y r i s e during the UDI period, h a l t i n g the long term
f a l l i n g trend and h i g h l i g h t i n g the f a c t (also shown i n Figure 14)
that export growth i n the f o o d s t u f f s sub-sector remained s i g ­
n i f i c a n t i n the UDI as i n the Federal period.
The r i s i n g importance of food exports during the UDI period,
however, needs to be treated with some caution. While some
Figure 15. The Ratio of Manufacturing Value Added for the Foodstuffs
Sub-sector to Manufacturing Value Added for the
Manufacturing Sector as a Vhole.
20 -
19 -
18 -
K
T
17 ^ 1 f ° \ !
16 -
o>
c 16 -
14 -
13 -
12 -
<
11 -
10 -
X, 9 -
8 -
• 7 -
n
T)
o 6 -
o
5 -
L.
4 -
3 -
2 -
1 -
1 I 1 ) 1 I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 r 1 1 1 r 1 I 1 1 1 1 1
38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82
Yoars
Source: As for Table 5, above.

s u b s t a n t i a l export expansion d i d take place during UDI and new
manufactured food products were exported - f o r instance the
exports of malted barley rose from zero to $2.8 mn and of
stockfeeds from zero to $4 mn over the 15 year period - most of
the export expansion was a t t r i b u t a b l e to a s i n g l e a g r i c u l t u r a l l y -
caused f a c t o r : the r a p i d expansion of c h i l l e d and frozen meat
{mostly beef) exports. The lower l i n e of Figure 16 shows that
when these exports are excluded, the long term steady d e c l i n e
continued during the UDI period'^ , reaching a low of some 6% of
t o t a l manufactured exports i n 1976/77. In the f i n a l period, the
two l i n e s almost r e j o i n e d , r e f l e c t i n g the dramatic f a l l i n
c h i l l e d / f r o z e n beef exports i n the 1981/82 period although they
began to diverge again a f t e r 1983".
A f a l l i n the r a t i o of food to t o t a l manufactured exports
i s , of course, to be expected with a deepening of a country's
i n d u s t r i a l base and e s p e c i a l l y i f i t i s accompanied by a more
r a p i d increase i n the exports of other manufacturing sub-sectors
i s a f a r from discouraging trend. And, as Figure 7, above,
reveals, there was a steady increase i n the r a t i o of manuf
a c t u r i n g to t o t a l commodity exports i n the 40 year period from
1939 to 1979.
Figure 16. Food Exports as a Proportion of Total Manufactured Exports
1938/39 to 1982/83.
38/9 42/3 46/7 50/1 S4/5 58/9 62/3 66/7 70/1 74/5 78/9 82/3
2 Yr *vs. 1936-83 (Various Y)
+ Excpt a Fd E>p/AII Kf.Exp. CtnifenChrmc
Source: as for Table 5, above. (1986/87 based on 1986 data).
But the trend has been f a r too extreme, as i s h i g h l i g h t e d i n
Figure 17. This shows that not only have f o o d s t u f f s c o n s t i t u t e d
a d e c l i n i n g share of t o t a l manufacturing exports but that the
exports of the f o o d s t u f f s sub-sector have c o n s t i t u t e d a d e c l i n i n g
share of the t o t a l gross output of the sub-sector, f a l l i n g from a

high of 22% i n 1938/39 to as low a f i g u r e as 4% by 1983. There
i s , however, one extremely p o s i t i v e feature recorded i n Figure
17: the progressive d e c l i n e i n both the s i z e and share of
manufactured imported f o o d s t u f f s i n t o the country. The value of
manufactured f o o d s t u f f s has d e c l i n e d p r o g r e s s i v e l y from over 20%
of t o t a l gross output of the sub-sector at the s t a r t of the
Federal period to a minute 1% by the end of the UDI period, with
l i t t l e change recorded i n the pace of import s u b s t i t u t i o n between
the Federal and UDI periods. In absolute terms and at current
p r i c e s , the value of manufactured food imports f e l l from $7.8 mn
i n 1952/53 to an average of $7.1 mn over the l a s t s i x years.
Perhaps the most important question these r e s p e c t i v e trade
to output trends r a i s e i s the extent to which the drop i n export
shares and i n manufactured food imports arose as a r e s u l t of
higher domestic costs of manufactured food products v i s - a - v i s
imports. If the Jansen a n a l y s i s of s t a t i c comparative advantage,
using 1982 data, i s any guide, then the answer, as reproduced i n
Table 13, below, i s that i n general the sub-sector remained
competitive with a l t e r n a t i v e imports, i n d i c a t i n g that both the
expansion of the sector and the reduction i n import dependence
were not achieved at the cost of s u b s t a n t i a l domestic subsidies
Figure 17. External Manufactured Trade in Foodstuffs in Relation to
Gross Output of the Foodstuffs Sub-sector, 1938/39-82/83.
24 -
22 -
20 -
o
cr
D 18 -
c X,^ '——
^ 16 -
o
• 14 -
D
T3
12 -
D
91
O 10 -
a.
X
f) a -
0
•
IT
6 -
4 -
^ ^ ^ ^
2 -
0 — f r ] 1 1 I I 1 1 1 t 1 1 1 1 1 I 1 1 1 1
3 8 / 9 4 2 / 3 4 6 / 7 50/1 5 4 / 5 5 8 / 9 6 2 / 3 6 6 / 7 70/1 7 4 / 5 7 8 / 9 8 2 / 3 '
2 Yr Avs, 1 9 3 8 - 6 3 (Various Yr^)
a Exp/Otput + l(cif)/DDd O Exp/Q.\css txssf
Source: as for Figure 5.

paid for by higher domestic food p r i c e s v i s - a - v i s imported a l t e r ­
n a t i v e s . More r e c e n t l y t h i s conclusion has been confirmed by the
World Bank's I n d u s t r i a l Sector Study of Zimbabwe which for mid-
1986 p r i c e s found that food products i n Harare were about 45%
lower than i n Washington DC.
In summary, then, the expansion of the f o o d s t u f f s sub-sector
has occurred broadly i n l i n e with increases i n domestic demand
and with the o p p o r t u n i t i e s presented by the changing s t r u c t u r e of
the a g r i c u l t u r a l sector, leading both to a reduction i n imported
f i n a l products and to the f u r t h e r processing of a wider range of
crops and l i v e s t o c k . I t was l a r g e l y these f a c t o r s rather than
any change i n the macro-context of p r o t e c t i o n which appeared to
have been of most importance to the growth of the sub-sector.
But why, i t needs to be asked, was export performance so
miserable and what i n h i b i t e d f u r t h e r export expansion?
Table 13
Comparative Advantage Indicators for Foodstuffs Sub-sector, 1982 Data.
Share
of Value DRC
Branch of Sub-sector Added DRC S/run DRC Range (if given)
Slaught/process.of meat 33 0.69 0. .55
Grain, animal feeds 2B 1.03 0, ,83 0.53 to 1.14
Bakery products 5 0.70 0, .56
Dairy products 14 1.11 0, ,89
Sugar i confectionery pdcts 10 0.83 0. ,66 0.72 to 1.95
Other food products 10 0.74 0. 59
ALL FOODSTUFFS 100 0.88 0. ,70
Source: Jansen (1983,1: 48-67, 11:34).
At a general l e v e l there would appear to have been a number
of f a c t o r s at work. F i r s t , the progressive and consistent
expansion of domestic demand probably provided an i n c r e a s i n g l y
s u f f i c i e n t market for the firms involved i n food manufacturing,
the high r a t i o of food exports to gross output i n the l a t e 1930s
i n part being explained by the small absolute numbers involved'".
Thus the move away from exports by no means represented a loss of
export demand but rather the switch i n demand to an ever-growing,
c l o s e r domestic market". I t was p a r t l y f o r t h i s reason that i n
Zimbabwe f o r at l e a s t three decades there has been very l i t t l e
" t r a d i t i o n " of exporting among food producers, i n marked con-

t r a s t , for example, to manufacturers i n the c l o t h i n g , t e x t i l e ,
tobacco, f u r n i t u r e and leather i n d u s t r i e s .
Figure 18. Index of Food Production, 1967-82,Constant(1980)Prices,
GNI Prices: Heat Products, Fruit and Vegetable Processing
and Grain and Animal Feeds.
Source: Censusof Production 1983/84 and1976/r7,CS0, Harare and
Monthly Digest of Statistics, December 1986.
Second, as most raw material inputs come from the a g r i c u ­
l t u r a l sector and output tends to vary s u b s t a n t i a l l y from year to
year because of d i f f e r e n c e s i n r a i n f a l l , there was l i t t l e
i n c e n t i v e to introduce plant of a capacity s u f f i c i e n t to cater
for a s u b s t a n t i a l export market, e s p e c i a l l y when i n t e r n a t i o n a l
p r i c e s f o r such products have experienced long term progressive
d e c l i n e s . This f a c t o r i s confirmed by the recent wide v a r i a t i o n s
i n the value added of three sub-groups of food manufacturing over
the past 15 years: meat products, canning and preserving of f r u i t
and vegetables and g r a i n and animal f o o d s t u f f s , shown i n Figure
18. Third, while the sector was only minimally (and decreasingly)
dependent upon access to f o r e i g n exchange for raw material
inputs, there was a major and i n c r e a s i n g f o r e i g n exchange
c o n s t r a i n t i n expanding the c a p i t a l base of the sub-sector; given
t h i s shortage, the f i r s t p r i o r i t y went to p r o v i d i n g c a p i t a l to
meet the domestic demand for f o o d s t u f f s rather than to add

f u r t h e r capacity so to expand food e x p o r t s ' 6 . food manufactures
tend ( d i s p r o p o r t i o n a t e l y to many other manufactured goods)
to be high bulk and low value products, margins are small and
therefore a f a r higher throughput and even greater c a p i t a l outlay
are f r e q u e n t l y needed to make exporting a v i a b l e p r o p o s i t i o n .
F i n a l l y , not a l l products made f o r the domestic market were
s u i t a b l e f o r export, e s p e c i a l l y without i n c u r r i n g s u b s t a n t i a l
c a p i t a l costs i n v e s t i n g i n c h i l l e d and frozen containers to
transport products to the l a r g e r markets beyond A f r i c a ' ' .
To these longer term explanations need also to be added
those of more recent o r i g i n , discussed p a r t i c u l a r l y i n s e c t i o n
I I I above. There i s l i t t l e doubt, f o r example, that i n p a r t i ­
cular the c o n s t r a i n t s of p r i c e c o n t r o l , i n c r e a s i n g l y severe
f o r e i g n exchange shortages, the lack of f o r e i g n exchange i n
neighbouring states and the higher f r e i g h t and insurance costs
r e s u l t i n g from d i s r u p t i o n to the Mozambique transport routes have
had an equally severe e f f e c t on recent production l e v e l s of the
f o o d s t u f f s sub-sector and on expanding manufactured food exports.
Indeed i n the case of the sugar industry, ZSR argues that the
e f f e c t of l e s s than s u f f i c i e n t domestic p r i c e increases has meant
that necessary investment to expand capacity even to meet future
domestic demand has been i n serious doubt for the l a s t few years.
So much f o r the "broad-brush" a n a l y s i s of the f o o d s t u f f s
sub-sector. Further i n s i g h t s i n t o i t s development, i t s current
problems and p o t e n t i a l , can be gleaned by examining some companybased
evidence.
4.2 Some Firm-Level Evidence
A recent o v e r a l l study of f o r e i g n investment i n post-
Independent Zimbabwe, with case-study company evidence'', has
h i g h l i g h t e d the f a c t that although there has been minimal new
f o r e i g n investment since 1980, among the most s i g n i f i c a n t
investors have been companies with i n t e r e s t s i n the food b u s i ­
ness: Dandy (Denmark), s e t t i n g up a new company to manufacture
and export chewing gum; Heinz's major investment ( i n excess of
US$15 mn) i n O l i v i n e I n d u s t r i e s , also with a view to exporting
and the UK's Dalqhety i n a j o i n t venture with the l o c a l conglomerate.
Cairns Holdings. The involvement of at l e a s t two of
these f o r e i g n companies was based i n large measure on t h e i r
b e l i e f i n the p o t e n t i a l f o r manufactured food exports. This
confirmed a view held by a number of Zimbabwean companies that
one of t h e i r fundamental weaknesses i n expanding s u b s t a n t i a l l y
i n t o export markets was the absence of both modern technologies
for food development, t h e i r outdated and inadequate research
f a c i l i t i e s and i n the high cost of reaching the most l u c r a t i v e
markets outside the A f r i c a n continent, rather than i n crude p r i c e
and q u a l i t y f a c t o r s . This explains the w i l l i n g n e s s of l o c a l
firms to form c o l l a b o r a t i v e ventures with m u l t i n a t i o n a l corporations'
' .

Zimbabwe's food canning i n d u s t r i e s i l l u s t r a t e w e l l the range
of problems and o p p o r t u n i t i e s f a c i n g the f o o d s t u f f s sub-sector
today. The experience of Super Canners, a family-owned meatcanning
f a c t o r y i n Bulawayo, both h i g h l i g h t s the competitiveness
of Zimbabwean industry and challenges the widely-expressed view
among manufacturers that firms are only able to expand substant
i a l l y i n t o the export f i e l d i f they have a secure domestic
market upon which they can f a l l back. Not only does Super
Canners export (1986 figures) some $15 mn of food products,
c o n s i s t i n g almost e n t i r e l y of corned beef and making i t the
second l a r g e s t food exporter i n the country to the Cold Storage
Commission (CSC), but i t exports i t s e n t i r e output and not to
neighbouring countries w i t h i n A f r i c a but (at present) s o l e l y to
the United Kingdom.
Some recent developments i l l u s t r a t e the p o t e n t i a l . While
one of the main reasons f o r i t s l o c a t i o n i n Bulawayo was to be
near to i t s main sources of raw materials - the CSC a b a t t o i r i s
s i t u a t e d across the road and Metal Box's canning f a c t o r y was,
u n t i l r e c e n t l y located nearby - recent developments i n d i c a t e that
these f a c t o r s are by no means fundamental to i t s competitiveness.
Not only has the canning f a c t o r y moved to Harare but i t s move l e d
to q u a l i t y problems and South A f r i c a n cans (some 20% more
expensive) had r e c e n t l y to be imported by Super Canners to
Bulawayo. But of even more cost significance"°°, f o r three
months i n the past year the CSC was not able to supply the basic
i n g r e d i e n t , beef. As a r e s u l t supplies were obtained from as f a r
away as the Republic of I r e l a n d , transported to Bulawayo f o r
canning and returned to Europe, t h i s time to the UK, to be sold.
Although during t h i s unique exercise l i t t l e more than current
running costs were covered, the scale of the operation i n d i c a t e s
the p o t e n t i a l f o r e s t a b l i s h i n g competitive i n d u s t r y i n Zimbabwe.
What has made Super Canners competitive i n the manufacture
of a product where i n t e r n a t i o n a l competition i s so f i e r c e ' " ' ?
According to management i t s success has depended upon the
f o l l o w i n g f a c t o r s : good management that i s v e r s a t i l e and f l e x i b l -
good job s e c u r i t y f o r the firms's employees and competitive
wages leading to low labour turnover; access to the European
market under the Lome Convention; l o c a l s u p p l i e s of beef and t i n -
cans ( u s u a l l y ) ; high q u a l i t y of engineering c a p a b i l i t y w i t h i n the
f i r m , the a b i l i t y to adapt a modern, h i g h l y - e f f i c i e n t plant
c o n s i s t i n g mostly of imported machinery to l o c a l conditions and
q u i c k l y to deal with breakdowns, and, f i n a l l y , c o n t i n u i t y of high
q u a l i t y personnel able to maintain sales and, i f necessary, to
a n t i c i p a t e the need to f i n d a l t e r n a t i v e markets.
The importance placed on a l l these d i f f e r e n t f a c t o r s puts i h
sharp perspective the inadequacies of those whose advocacy of
industry/export s t r a t e g i e s depends e x c e s s i v e l y on " g e t t i n g p r i c e s
r i g h t " . This i s w e l l i l l u s t r a t e d i n p a r t i c u l a r by the h i s t o r y of
Super Canners. In 1981, the main market f o r the firms's products
was South A f r i c a , made p r i c e competitive i n part because of
s u b s t a n t i a l c a p i t a l investment and plant refurbishment which took
place during the decade of the 1970s. Then suddenly and without

p r i o r n o t i f i c a t i o n , South A f r i c a imposed a n i n e f o l d increase i n
i t s canned beef import t a r i f f , r a i s i n g the l e v e l of duty from 11c
per kg to $1.00 per k g " " . The e f f e c t was that, at a stroke, the
major s i n g l e market was eliminated. However a l l was not l o s t and
quite r a p i d l y the f i r m was able to expand s u b s t a n t i a l l y i n t o the
United Kingdom market, absorbing the l o s t South A f r i c a n sales.
Super Canners' a b i l i t y to switch to the UK market, e v e n t u a l l y for
a l l i t s product, had i t s o r i g i n s a good many years before South
A f r i c a ' s t a r i f f r a i s i n g a c t i o n occurred. A n t i c i p a t i n g p o l i t i c a l
independence, the f i r m began to i n v e s t i g a t e the UK market as
e a r l y as the mid-1970s and s t r a i g h t a f t e r Independence i n 1980 i t
approached the EEC f o r v e t e r i n a r y approval f o r i t s f a c t o r y ; EEC
c e r t i f i c a t i o n was obtained i n that year. While t h i s research
i n t o a l t e r n a t i v e markets l e d to minimal export d i s r u p t i o n , i t s
United Kingdom market sales are by no means permanently "safe",
e s p e c i a l l y from other exports to Europe protected by the Lome
Convention. The most recent threat has been an a n t i c i p a t e d
dumping of Ethiopian canned beef i n t o that market.
Without wishing to detract from the considerable achievement
of Super Canners, two s u b s t a n t i a l f a c t o r s working i n i t s favour
need to be h i g h l i g h t e d , both of which have a s s i s t e d the lowering
of u n i t costs. The f i r s t i s that over the longer term the f i r m
has b e n e f i t e d from the r e l a t i v e l y low p r i c e of Zimbabwean beef in
comparison with i n t e r n a t i o n a l prices'"'' . The second i s that even
though the f r e i g h t and insurance costs of shipping i t s product tc
Europe are comparatively low (estimated at only some 5% of the
ex-factory p r i c e ) , i t s competitiveness i s a s s i s t e d by the large
subsidies under which the National Railways of Zimbabwe (NRZ)
have operated i n recent years'"'.
Of course, these b e n e f i t s would apply to any f i r m operating
i n the canned meat business. I t i s therefore of more than
passing i n t e r e s t to look b r i e f l y at the operations of Lemco, the
l a r g e s t producer of canned meat, vegetable and f r u i t products i n
Zimbabwe, because exports have t r a d i t i o n a l l y played only a very
minor part i n i t s o v e r a l l operations (accounting f o r between 5%
and 15% of turnover)'"'. The company i t r e l i e s almost e n t i r e l y
on the domestic market where f o r canned meats and a l s o f o r canned
f r u i t s , jams and
vegetables i t has the l a r g e s t market share. I t s l i m i t e d exports
have tended to go to r e g i o n a l markets'"'.
The root cause of Lemco's f a i l u r e to expand i n t o the export
market would appear to l i e with i t s management'"'. Past p o l i c y
appears to have been to r e s t content with supplying the domestic
market f o r canned beef, which i t almost e n t i r e l y dominates'"'.
While i t s near-monopoly p o s i t i o n has not led to domestic prices
becoming widely out of l i n e with border p r i c e s there i s l i t t l e to
i n d i c a t e that dt has aggressively sought to lower u n i t costs at
l e a s t to the extent of being able to penetrate the much l a r g e r
European market f o r i t s products or, more simply, to even think
much about expanding s u b s t a n t i a l l y i n t o the export f i e l d . If
import r e s t r i c t i o n s were l i f t e d i t would s t i l l be able substant
i a l l y to hold the domestic market i n the face of South A f r i c a n

competition. There would appear to be a chain of f a c t o r s that
together have r e s t r i c t e d export expansion: to export to the EEC
requires E E C - r e g i s t r a t i o n of the canning f a c t o r y ; t h i s has not
been obtained because the West Nicholson plant i s too small and
too o l d to meet modern standards; a few years ago the cost of
expanding and up-grading the f a c t o r y would have been about $1 1/2
mn but no d e c i s i o n has been made on going ahead with t h i s
investment programme. To some extent Lemco are i n a f a r b e t t e r
p o s i t i o n to export than Super Canners - they are part of a
worldwide corporation with a l l the mari'eting e x p e r t i s e t h i s
brings and, d o m e s t i c a l l y , they own s u b s t a n t i a l c a t t l e ranches
located near t h e i r f a c t o r y and so have d i r e c t access to the main
raw m a t e r i a l . On the other hand, there are problems of water
supply to the f a c t o r y at West N i c h o l s o n ' . The Super Canners
s t o r y shows that w i t h i n Zimbabwe are the i n g r e d i e n t s f o r h i g h l y
e f f i c i e n t food manufacturing which i s competitive worldwide; the
story of Lemco shows that e s p e c i a l l y with a captive and expanding
domestic market and wheredomestic p r i c e s are not out of l i n e with
border p r i c e s , there i s no guarantee that t h i s export p o t e n t i a l
w i l l be e x p l o i t e d ' ' ' .
I f one sets aside the i n t e r e s t i n g , but somewhat anomalous,
case of temporarily importing beef from Europe to send back i n
cans, i t does appear that there i s a large untapped p o t e n t i a l f o r
expanding Zimbabwe's resource-based food manufactured exports''^.
Besides the canned meat industry, t h i s i s i l l u s t r a t e d w e l l by the
plans and actions of Cairns Holdings, seen, f o r instance i n i t s
recent a c q u i s i t i o n of the former family f i r m of Border Streams,
processor of a wide range of jams, preserves, f r u i t and f r u i t
j u i c e s .
Border Streams i s one of some half-dozen privately-owned
firms i n the f r u i t and vegetable preserving/canning business i n
Zimbabwe. In s p i t e of quite f i e r c e competition among producers
f o r i n c r e a s i n g shares i n the domestic market ( a l l companies argue
that the market i s "over-traded") there has been l i t t l e expansion
of the i n d u s t r y as a whole i n t o the export market: i n 1983,
exports of jams, i n c l u d i n g pulps, were valued at $3,000, of f r u i t
j u i c e s at $22,000 and of processed vegetables at $2.7 mn. This
i s i n s p i t e of both Zimbabwe's a b i l i t y to grow t r o p i c a l and semit
r o p i c a l f r u i t s and v e g e t a b l e s ' " and the large and growing
markets i n the Middle East, the EEC and Japan f o r such processed
products which, i n the case of the EEC, could be imported under
the concessional terms of the Lome Convention. Three key f a c t o r s
appear have to have i n h i b i t e d export expansion. F i r s t , the lack
of a r e l i a b l e supply of high q u a l i t y products from the farming
community; second, the age, q u a l i t y and s i z e of the processing/canning
plants which were e s t a b l i s h e d f o r a smaller
domestic market, and, t h i r d , a reluctance on the part of management
to attempt to e x p l o i t these p o t e n t i a l export markets.
The case of Border Streams i s of i n t e r e s t because i t has
attempted to address each of these c o n s t r a i n t s . While the
takeover by Cairns was i n part meant to provide greater r a t i o n a l ­
i s a t i o n f o r more e f f i c i e n t production f o r the domestic market,
the r a d i c a l steps taken - moving the f a c t o r y to Mutare, i n t e g r a ­
t i n g the operation with i t s Tomanqo Foods operation i n Mutare to

increase throughput and i n s t a l l i n g a wider range of more modern
c a p i t a l equipment - have provided the company with most of the
t e c h n i c a l i n g r e d i e n t s necessary to produce high q u a l i t y export
products. A j o i n t marketing strategy with other companies,
marketing under a j o i n t l a b e l i s also under c o n s i d e r a t i o n . As
for the raw m a t e r i a l supply problems, although these are by no
means a l l solved, the expansion of i r r i g a t i o n f a c i l i t i e s ,
increased pest c o n t r o l , a f a r greater r e a l i s a t i o n amongst farmers
that d i v e r s i f i c a t i o n to t h i s type of farming can be h i g h l y
p r o f i t a b l e ' 1 " and greater s p e c i a l i s a t i o n to a smaller range of
products have a l l a s s i s t e d them overcoming t h i s c o n s t r a i n t . I t
also seems l i k e l y that l o c a l high q u a l i t y p e c t i n w i l l soon be
produced to replace imports. F i n a l l y , there i s an increased
awareness among management that there i s a huge p o t e n t i a l for
export expansion, even i f awareness has also grown of the
i n t e r n a t i o n a l competition'''. Greatest a t t e n t i o n i s being
focussed on a range of high value products, i n c l u d i n g asparagus,
t r o p i c a l f r u i t j u i c e s and jam pulps (guavas, mangoes, grenadi
l l a s ) and, with tomatoes, canned t r o u t . What i s more, container
loads of these products to Europe have r e c e n t l y been exported'''.
That s u b s t a n t i a l progress has been made over the past few
years to address the c o n s t r a i n t s i n h i b i t i n g exports i s borne out
by recent trade s t a t i s t i c s . In 1985, the exports of jams wwere
valued at $48,000, compared with $2,000 i n 1983, while f r u i t
j u i c e exports i n 1986 were valued at $1.1 mn compared with
$22,000 i n 1983. By 1988, canned guavas were appearing r e g u l a r l y
on supermarket shelves i n B r i t a i n ' ' ' .
For these food manufacturers, however, and indeed f o r the
whole of the manufacturing sector, other c o n s t r a i n t s e x i s t at
present which need, f i n a l l y , to be mentioned. Foreign exchange
shortages f o r c a p i t a l equipment and spares are not only i n h i b i t ­
ing current exports but, more fundamentally, they are slowing
down - and i n some cases preventing - the process of adjustment
and change needed to adapt plant and equipment to create or
extend longer term competitiveness. The food industry i s
p a r t i c u l a r l y a f f e c t e d by the p e r i o d i c , and growing, shortage of
tin-cans and the v a r i a b l e q u a l i t y of the cans which Metal Box i s
c u r r e n t l y manufacturing. Importantly, too, a noticeably slower
speed of bureaucratic decision-making i s becoming a major
handicap to both i n d u s t r i a l e f f i c i e n c y and i n p a r t i c u l a r to
securing export orders p r e c i s e l y at a time when the speed of
decision-making needs to increase with the commitment to increase
exposure to the export market. Not only do these delays lead to
p o t e n t i a l export orders being l o s t but i t has already l e d to
s u b s t a n t i a l losses of current exports. To take one example from
the experience of Super Canners, p r i o r to o b t a i n i n g permission to
import beef from I r e l a n d the f a c t o r y stood completely i d l e for
three months, i n c u r r i n g a loss to the n a t i o n a l economy of f o r e i g n
exchange amounting to close to $4 mn. The problem i s simply
t o l d : Super Canners had r e a l i s e d w e l l i n time that the Cold
Storage Commission would be unable to supply i t with a l l i t s beef
requirements some months hence. However i n s p i t e of g i v i n g p r i o r
warning of the impending shortage of domestic beef, permission

was only given f o r i t to import i t s beef requirements three
months a f t e r domestic supplies stopped.
C l e a r l y , as t h i s example i l l u s t r a t e s , the l i n k s between the
food i n d u s t r y and the fortunes of Zimbabwe's a g r i c u l t u r a l
industry are intimate. However, as shown i n the next s e c t i o n ,
the l i n k s between manufacturing and a g r i c u l t u r e are f a r more
complex and more important than might i n i t i a l l y be thought. I t
i s to these that we now turn.

V. AGRO-INDUSTRIAL LINKAGES
5.1 Macro-Trends
A g r i c u l t u r e and manufacturing are (and/or have the p o t e n t i a l
to be) l i n ) i e d i n a v a r i e t y of ways. Most obviously, manufacturing
sector output can be used as inputs to the a g r i c u l t u r a l
sector, commonly to replace the importation of those products
while, f o r i t s part, a g r i c u l t u r a l output can be used as inputs to
the manufacturing sector. To the extent that t h i s l a t t e r linlcage
leads to e i t h e r c o s t - e f f e c t i v e import s u b s t i t u t i o n of domestic
consumption goods or f o r e i g n exchange earnings of what would
otherwise be raw a g r i c u l t u r a l exports then there w i l l also be a
f o r e i g n exchange gain f o r the country. A d d i t i o n a l l y there are
demand e f f e c t s that can be important: a r i s e i n a g r i c u l t u r a l
incomes not only provides a d d i t i o n a l p o t e n t i a l produce to process
w i t h i n manufacturing i t a l s o r a i s e s o v e r a l l demand by i n j e c t i n g
higher disposable incomes i n t o the economy, s t i m u l a t i n g demand
f o r manufactured products w i t h i n the a g r i c u l t u r a l sector and
elsewhere. A n a l y s i s of these d i f f e r e n t sorts of linltages i s
l i m i t e d i n the Zimbabwean case because of lack of r e l i a b l e time
s e r i e s data. Thus while t h i s s e c t i o n of the paper w i l l attempt
to point to the d i f f e r e n t forms of r e l a t i o n s h i p e x i s t i n g between
the two sectors, many of the f i n d i n g s must remain rather tentat
i v e ' ' 8 .
A number of analysts (such as Hawkins (1987)) have argued
that i n Zimbabwe a g r i c u l t u r e i s the key motor of contemporary
development and thus that changes i n GDP l e v e l s and, more
narrowly, i n manufacturing growth are determined by a g r i c u l t u r a l
performance. I n d i r e c t support f o r such a viewpoint i s suggested
by the data i n Figures 5, 7, 16 and 17, above, which reveal the
small and d e c l i n i n g outward o r i e n t a t i o n of manufacturing over
time. More d i r e c t evidence i s provided i n Figures 19, 20 and 21,
below, which examine these d i f f e r e n t r e l a t i o n s h i p s from the e a r l y
1950s. Figure 19, showing the r e l a t i v e c o n t r i b u t i o n s of manufact
u r i n g and a g r i c u l t u r e to GDP, appears to suggest that the
o v e r a l l i n f l u e n c e of a g r i c u l t u r e has p r o g r e s s i v e l y d e c l i n e d while
that of manufacturing has stepped i n not only to replace i t but
to gain increased prominence and i n f l u e n c e . Figure 20, recording
the changes i n absolute value added over the same time period,
shows c l e a r l y that the l i n k s were strong and close i n the period
p r i o r to 1967, the year that i n absolute terms manufacturing
value added exceeded a g r i c u l t u r a l value added for the f i r s t time.
Thereafter, however, two trends are observable: f i r s t , the annual
v a r i a t i o n s i n a g r i c u l t u r a l performance''' are f a r more marked
than the annual v a r i a t i o n s i n manufacturing production; second,
the absolute c o n t r i b u t i o n of each sector to the o v e r a l l economy
a l t e r s q u i t e d r a m a t i c a l l y over time such that i n the two year
period 1985/86, annual MVA was estimated to be $2,303 mn with
a g r i c u l t u r e ' s c o n t r i b u t i o n $ 943 mn, only 40% of that achieved by
manufacturing. Together, Figures 19 and 20 would tend to suggest
that the Hawkins t h e s i s i s becoming f a r l e s s robust.

Figure 19. The Percentage Contribution of Agriculture
and Manufacturing to Gross Domestic Product
1954 to 1986.
"T-T 1 ; r—I I I 1 I — r — 1 — i — i — i — i — r — i — i — i — t — i — i — i — p — r — i — i i i — i — i —
54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 8283 84 85 8<
Years- 1954 lo 1986
• WVA/GDP + AgricVal.Added/GDP
Source: National Accounts (1986) and UNCTAD (1980).
Figure 20. Manufacturing and Agricultural Value Added (at factor
cost),1954 to 1985, $ bn Current Prices.
64 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 8£
• MVA. current Prices
Yeors- 1 954 to 1 986
+ Agric Volue Added

F i n a l l y the data from Figure 21, showing the annual v a r i a ­
t i o n s i n GDP, MVA and AVA ( A g r i c u l t u r a l Value Added), need to be
considered. Consistent with the data from Figure 20, these
r e v e a l the f a r greater v o l a t i l i t y i n a g r i c u l t u r a l production than
i n e i t h e r manufacturing or i n o v e r a l l GDP over the past 16 years.
However there does appear to be a c l o s e r r e l a t i o n s h i p between
annual changes i n a g r i c u l t u r a l and manufacturing growth before
and a f t e r Independence: before Independence the annual changes
i n the two sectors r e v e a l no d i s c e r n i b l e common pattern but a f t e r
that date there i s f a r c l o s e r movement d i s c e r n i b l e between a l l
three i n d i c a t o r s and i n the same d i r e c t i o n .
Figure 21. Annual Changes in Gross Domestic Product, Kanufacturinq
Value Added and Agricultural Value Added, 1970 to 1986.
-| 1 1 1 1 1 1 1 1 1 1 -T"
70-7171-7272-7373-7474-7S75-7676-7777-7S78-7S79-8Q30-8181-82B2-aB3-6«4-65e5-f
Years
O Ajnc VoliJe Added
Source: Quarterly Monthly Digest of Statistics, December 1986 and
National Income and Expenditure Report 1986.

As at l e a s t part of these linkages can be analysed better by
considering the input/output data between the sectors, we s h a l l
now examine the evidence which e x i s t s - crude though i t i s .
5.2 A g r i c u l t u r a l Inputs i n t o Manufacturing
The data i n Table 14 c l e a r l y show that over the past 16
years the manufacturing sector has absorbed an i n c r e a s i n g share
of the output from a g r i c u l t u r e , r i s i n g from 13% i n 1965 to 44% by
1981/82. At constant p r i c e s , t h i s implies a sevenfold increase i n
a g r i c u l t u r a l products used by manufacturing. I f only the output
of commercial a g r i c u l t u r e i s considered, the r e l a t i o n s h i p i s even
c l o s e r , with manufacturing absorbing 16% of t o t a l marketed output
i n 1965, but as high as 59% by the e a r l y 1980s. That t h i s
increased linkage between the two sectors has been of importance
to manufacturing i s i n d i c a t e d by the f a c t that as a proportion of
t o t a l inputs purchased by manufacturing, those o r i g i n a t i n g i n the
domestic a g r i c u l t u r a l sector rose from 10% i n 1965 to 20% i n 1975
and almost to 30% by 1981/82.
Table 14
Agricultural Output and Manutacturing Inputs
1965 1975 1981/82
Percent of Agricultural
output used as input by 12.8
manufacturing sector
31.1 43.9
Percent of commercial
agricultural output 16.0
used as input by the
manufacturing sector
Percent of inputs used
by manufacturing sector 9.7
originating in the
domestic agricultural
sector
38.6 59.2
20.4 29.2
Source: National Accounts and Balance of Payments of Rhodesia 1965,
Harare, CSO, 1966, Table 60; UNCTAD (1980:Annex III); for 1981 unpublished
data provided by the CSO, Harare, in part reproduced in UNIDO (1986b:126-
140;Annexes A to D) ; Census of Production 1983/84 and 1979/80, Harare, CSO. '
Not s u r p r i s i n g l y , most of a g r i c u l t u r e ' s inputs to manufact-'
u r i n g are used as inputs i n t o the Foodstuffs and Beverages and
Tobacco sub-sectors - accounting f o r 90% of a l l a g r i c u l t u r a l
production used by manufacturing up to the e a r l y 1970s; however
i n more recent years with the expansion of cotton production and
cotton ginning f a c i l i t i e s , sub-sector 3, T e x t i l e s , has increased
i t s share d r a m a t i c a l l y , r i s i n g to 21% of a l l a g r i c u l t u r a l
products u t i l i s e d by manufacturing i n 1981/82, amounting to $96

mn, compared with $310 mn used by sub-sector 1, Foodstuffs, and
over $21 mn used by sub-sector 2, Beverages and Tobacco'^" .
Although the data j u s t presented suggest s t r o n g l y that the
manufacturing sector has continued to make greater use of the
expanded production from Zimbabwe's a g r i c u l t u r a l sector, t h i s i s
by no means the complete p i c t u r e . From the point of view of
maximizing net f o r e i g n exchange earnings, a more d i s t u r b i n g trend
i s d i s c e r n i b l e i f , a d d i t i o n a l l y , a g r i c u l t u r a l export data are
examined. Although Figure 22 gives a p o s i t i v e view of both
r i s i n g raw and processed a g r i c u l t u r a l exports i n recent years,
two p a r t i c u l a r features need to be h i g h l i g h t e d : f i r s t the
proportion of processed to raw a g r i c u l t u r a l exports has changed
l i t t l e over time and, second, the absolute q u a n t i t i e s of nonprocessed
a g r i c u l t u r a l exports have r i s e n very markedly - from
$50 mn i n 1966 to over $220 mn i n 1979. What these f i g u r e s
suggest i s a large and i n c r e a s i n g loss of p o t e n t i a l f o r e i g n
exchange.
Figure 22. Value of Raw and Processed Agricultural Exports,1966-79.
E
t o
a.
Rcw Agric Exports ProccsE-^d Exports
Source: Muir {1981).

This i s confirmed by the r i s i n g r a t i o of raw a g r i c u l t u r a l
exports to gross a g r i c u l t u r a l output, which increased from j u s t
over 30% i n 1966 to 50% i n 1979, having peaked at 60% i n the mid-
1970s: while the i n c r e a s i n g export o r i e n t a t i o n of the a g r i c u l ­
t u r a l sector demonstrates greater absolute and r e l a t i v e f o r e i g n
exchange earning over previous periods, i t also i n d i c a t e s an
i n c r e a s i n g p o t e n t i a l loss through not maximising value added
p r i o r to exporting. This i s revealed, f o r instance, by some
trade and output data f o r 1985. In that year, the value of
coffee, tea, raw sugar, unmanufactured tobacco and cotton and
cotton l i n t exports was $638 mn, some 41% of domestic (non-gold)
exports. However, l e s s than 20% of the tea and coffee produced
and only some 2% of the tobacco i s c u r r e n t l y processed and
manufactured; $52 mn was earned from the export of raw sugar at
an average p r i c e of $264 a tonne while only $16 mn was earned
from exporting r e f i n e d sugar at a p r i c e of $421 a tonne; $150 mn
of cotton exports contrast with only $30 mn earned from the
export of t e x t i l e products. S i m i l a r l y f o r l i v e s t o c k products,
excluding the more expensive cuts and those r e c e i v i n g premium EEC
p r i c e s under the Lome Convention, expanding the export of canned
meats at t h i s point of the production process would earn the
country f a r more f o r e i g n exchange than concentrating on expanding
the export of c h i l l e d and frozen beef. For instance Zimbabwe has
r e c e n t l y been s e l l i n g "manufactured" meat to West Germany at $4 a
kilogramme. I f t h i s had been processed i n t o canned meat i t would
have earned the country $7 a kilogramme'^i.
5.3 Manufacturing Inputs i n t o A g r i c u l t u r e
The second major area of linkage concerns the manner and
degree to which Zimbabwe's manufacturing sector provides inputs
i n t o the a g r i c u l t u r a l sector. The main i n d i c a t o r s of t h i s
r e l a t i o n s h i p are shown i n Table 15.
As the data i n Table 15 show, i n respect of t h i s set of
linkages, the a g r i c u l t u r a l sector i s f a r more dependent upon
manufacturing (accounting for some 45% of i t s t o t a l inputs) than
manufacturing i s upon a g r i c u l t u r e , as l e s s than 10% of the output
of manufacturing i s channelled i n t o a g r i c u l t u r e - even though the
data suggest that t h i s l a t t e r r a t i o has been r i s i n g s i g n i f i c a n t l y
i n recent years. Another s t r i k i n g feature of Table 15 i n
comparison with Table 14 i s that whereas over time an i n c r e a s i n g
proportion of a g r i c u l t u r a l produce has been u t i l i s e d by manufact
u r i n g , the proportion of inputs from manufacturing u t i l i s e d by
a g r i c u l t u r e appears to have increased only slowly from 1966 to
1981/82 - r i s i n g from 42% to 48%. Although Table 13 i n d i c a t e s
l i t t l e v a r i a t i o n i n the proportion of inputs used by a g r i c u l t u r e
which are imported (indeed a s l i g h t r i s e i n t h i s f i g u r e i s shown
i n the 1980s data) there has been a marked d e c l i n e i n the
proportion of imports used by a g r i c u l t u r e to inputs obtained from
manufacturing (not shown i n the t a b l e ) ; t h i s r a t i o has f a l l e n
from 22% i n 1965 to 17% i n 1975 and to 10% by 1981/82. Inputs to
a g r i c u l t u r e o r i g i n a t i n g from the manufacturing sector c o n s i s t
mainly of the f o l l o w i n g items: stockfeeds (31% of the t o t a l ) ;

paper and packaging (1%); f e r t i l i z e r s and crop chemicals (54%),
machinery (11%) and transport equipment (3%)iz2_
Table 15.
The Supply of Material Inputs To The Agricultural Sector
1965 1975 1981/82
Percent of Inputs provided
by the Manufacturing Sector' 42 43 48
Percent of Inputs Directly
imported^ 9 7.5 10.4
Inputs from Manufacturing
to Agriculture as a
percentage of total 3 6 7
Manufacturing Output
Notes: 1. The data for 1981/82 do not refer to capital purchases
by the Agricultural Sector.
2. The data in this row are broadly consistent with those
of Muir for the period 1966 to 1979.
Source: as for Table 14 and Muir (1981).
The data on trends i n the r e l a t i v e shares of inputs sourced
from imports and domestic i n d u s t r y are of l i m i t e d value because
they capture only the d i r e c t and f i n a l t r a n s a c t i o n s , thus f a i l i n g
to encompass the i n d i r e c t import component of domestically
manufactured products. For instance i n the case of crop chemic
a l s , almost a l l of the d o m e s t i c a l l y "manufactured" products
c o n s i s t of simple formulation and packaging of imports, t h e i r
import content being w e l l i n excess of 70% of t h e i r domestic
s e l l i n g p r i c e . A more complete (although s t i l l l e s s than f u l l y
accurate) p i c t u r e of t h i s aspect of a g r o - i n d u s t r i a l linkages can
be obtained by l o o k i n g i n more d e t a i l at the supply of and demand
f o r the key m a t e r i a l inputs required by the a g r i c u l t u r a l sector.
These would include the f o l l o w i n g : f e r t i l i z e r s , crop chemicals,
a g r i c u l t u r a l t o o l s and implements i n c l u d i n g t r a c t o r s and packagi
n g m a t e r i a l s .
Table 16 shows the t o t a l m a t e r i a l input purchases made by
the a g r i c u l t u r a l sector i n 1984 sub-divided i n t o the commercial
and other ( l a r g e l y communal) s u b - d i v i s i o n s of a g r i c u l t u r e . In
terms of value, f e r t i l i z e r s and stockfeeds dominate t o t a l
m a t e r i a l supply purchases, accounting f o r 85% of t o t a l m a t e r i a l
inputs. Sub-dividing a g r i c u l t u r e i n t o two, however, produces
some marked v a r i a t i o n s . The commercial sector purchased 83% of
a l l input purchases i n 1984, the remainder j u s t 17%. Although
t h i s d i f f e r e n c e i s c l e a r l y very great, i t has narrowed considerably,
e s p e c i a l l y since Independence; f o r instance i n 1976,

commercial a g r i c u l t u r e accounted f o r 93% of t o t a l m a t e r i a l input
purchases. Within each of the s u b - d i v i s i o n s , notable v a r i a t i o n s
occur between the communal/small-scale and the l a r g e - s c a l e
commercial sector; i n the former, purchases are dominated by
f e r t i l i z e r with packaging materials (mostly g r a i n bags) accounting
f o r 12% of a l l purchases - and n e a r l y h a l f the n a t i o n a l
demand f o r such purchases. The r e l a t i v e d i f f e r e n c e s i n purchases
of stockfeeds and f e r t i l i z e r s between the two sub-sectors of
a g r i c u l t u r e i s due n e i t h e r to the d i f f e r e n c e s i n l i v e s t o c k
population nor to the area planted to p a r t i c u l a r crops but rather
to the r e l a t i v e commercialisation of l i v e s t o c k production and
i n t e n s i t y of crop production*^'.
On current cropping patterns, maize i s f a r and away the
l a r g e s t absorber of f e r t i l i z e r , accounting f o r 61% of a l l
purchases, followed by 8% f o r winter c e r e a l s , 8% f o r tobacco and
Table 16
Purchase of Material Inputs by the Agricultural Sector 1984.
$000s
Item Commer­ % Communal % Total %
c i a l Tot & Small- Tot a l l each
al scale al agric. input
Fertilizers 107,916 72 42,420 28 150,336 46
Crop Chemicals 30,043 97 682 3 30,725 10
Pacliaging Materials 8,760 57 6,532 43 15,292 5
Stockfeeds/fodder 121,568 96 4,755 4 126,323 39
TOTALS 268,287 83 54,389 17 322,676 100
Source: Central Statistical Office, Zimbabwe: Production Account of
Agriculture, Forestry and Fishing, 1976-84, Harare, Agricultural
Statistics CSO, 1987 and Unpublished data from CSO.

6% f o r cotton. With the greater absolute and also p r o p o r t i o n a l
increase i n maize production o r i g i n a t i n g i n the communal areas
and with domestic demand r i s i n g by between three and four percent
a year, i t i s t h i s part of a g r i c u l t u r e which i s l i k e l y to see the
l a r g e s t increase i n demand f o r f e r t i l i z e r s over the coming
decade' 2 4 ,
To meet growing demand, Zimbabwe has had a long h i s t o r y of
f e r t i l i z e r manufacture. I t s o r i g i n s go back to the e a r l y 1920s
when a superphosphate f a c t o r y was opened i n Harare but the major
developments occurred i n the l a t e 1960s/early 1970s when an
ammonia plant, based on an e l e c t r o l y t i c process, was e s t a b l i s h e d .
There are c u r r e n t l y four main f e r t i l i z e r companies, two upstream
plants producing ammonium n i t r a t e and phosphate f e r t i l i z e r s and
two plants which manufacture, package and d i s t r i b u t e a broad
range of f e r t i l i z e r from l o c a l manufacture and from imports. Of
the four broad groupings of product, Zimbabwe has been s e l f -
s u f f i c i e n t i n superphosphates f o r 25 years (made from l o c a l raw
materials) but has been t o t a l l y import-dependent upon potash (for
the production of which there are no l o c a l raw materials) and
sulphur i n recent years. As for nitrogenous f e r t i l i z e r s -
accounting for greater tonnage consumption than the other three
f e r t i l i z e r products combined'^' - i n recent years the Sable plant
has been able to produce about two-thirds of domestic r e q u i r e ­
ments with the balance imported'^' .
There are three issues r e l a t e d to the f e r t i l i z e r industry of
p a r t i c u l a r i n t e r e s t to the present d i s c u s s i o n : why d i d Zimbabwe
e s t a b l i s h i t s f e r t i l i z e r i n d u s t r y when i t d i d , how cost competit
i v e i s i t and what future plans are there for f u r t h e r domestic
sourcing of products? ZFC, Windmill and Zimphos were a l l set up
with f o r e i g n c a p i t a l before the UDI period i n l i n e with the
general pattern of tapping a s i z e a b l e l o c a l and r e g i o n a l market
with, i n t h i s p a r t i c u l a r case, s u b s t a n t i a l growth p o t e n t i a l .
None was set up with the i n t e n t i o n of p r o v i d i n g a base for
s u b s t a n t i a l export of t h e i r r e s p e c t i v e products. They were
e s t a b l i s h e d i n a r e l a t i v e l y s t a b l e p o l i t i c a l environment and with
the n a t i o n a l capacity to be s e r v i c e d with competent engineers and
technicians. The case of Sable i s r a t h e r d i f f e r e n t , not because
the p o t e n t i a l f o r e i g n exchange gains were any l e s s - indeed they
were greater - but because of a number of other f a c t o r s : the
high cost method of production chosen, the timing of the d e c i s i o n
and the d i r e c t involvement of the government which p r e v i o u s l y had
not taken such an immediate i n t e r e s t i n manufacturing, a f a r
higher degree of l o c a l c a p i t a l than i n the past and, of the
f o r e i g n partners, considerable South A f r i c a n involvement. In
t h i s instance the paramount o b j e c t i v e of attempting to save
f o r e i g n exchange appeared to over-ride any other p o t e n t i a l drawbacks
of the Sable s c h e m e ' G i v e n the high and r i s i n g costs of
e l e c t r i c i t y (the main "raw m a t e r i a l " of the process) and the fact
that domestic demand o u t s t r i p p e d the plant's capacity w i t h i n
about ten years of i t coming on stream, the d e c i s i o n to go ahead
with the Sable scheme has not been without i t s c r i t i c s ' ^ a .

How do the p r i c e s of d o m e s t i c a l l y produced f e r t i l i z e r s
compare with comparable p o t e n t i a l imports? Figures for 1981 and
for 1986 i n d i c a t e not only a high l e v e l of e f f i c i e n c y , measured
i n terms of DRCs, but also a range of measures f o r a l l four firms
of l e s s than u n i t y with, a d d i t i o n a l l y , only a f a i r l y small l e v e l
of e f f e c t i v e p r o t e c t i o n . The relevant summary data are rs^produced
i n Table 17'2 9 _
Table 17
Competitive Measures for Zimbabwe's Fertilizer Industry
Study/Year EPC DRC DRC Range
25%
Devaluation
Jansen, 1981i 1.17 0.83 0.66 0.65 to 0.99
World Bank, 1986^
Plant A 1.41 0.72
Plant B 1.43 0.91
Plant C 0.10 0.28
Motes: 1. Calculated prior to the substantial hikes in electricity
prices.
2. The World Bank figures, in contrast to the Jansen ones
use shadow rather than estimated world prices.
Source: Jansen (1982) and World Bank (1987).
As for the future, not only have a number of reports
recommended the i n s t a l l a t i o n of f u r t h e r f e r t i l i z e r manufacturing
capacity i n the country''" but the Government i s involved i n
analysing s p e c i f i c plans f o r expansion. One f i n a l and worrying
contemporary problem r e l a t e s to the issue of p r i c e s . The p r i c e s
of a l l f e r t i l i z e r products are s t r i c t l y state c o n t r o l l e d . Both
the World Bank and the companies themselves have argued r e c e n t l y
that the r e s u l t of recent p r i c i n g d e c i s i o n s i s that p r o f i t s have
been squeezed to the extent that the major f e r t i l i z e r firms have
not had funds to invest i n the necessary maintenance and expansion
of t h e i r p l a n t s . However, and i n s p i t e of t h i s c o n s t r a i n t ,
one of the companies, Zimbabwe Phosphate I n d u s t r i e s (Zimphos), i s
completing a s u b s t a n t i a l investment p r o j e c t j o i n t l y with the
Anglo-American Corporation, valued at $17 mn, to expand the l o c a l
production of s u l p h u r i c a c i d such that from the end of 1987
imports of elemental sulphur w i l l no longer be necessary. As
some 85% of the a c i d i s used to produce superphosphate ' f e r t i l i z e r
and the increased q u a n t i t i e s manufactured w i l l , at l e a s t f o r the
next f i v e years, exceed domestic demand, the completion of t h i s
project w i l l not only save f o r e i g n exchange through e l i m i n a t i n g
imports but w i l l earn f o r e i g n exchange through exports.
Besides f e r t i l i z e r the story of the other inputs supplied by
manufacturing i n d u s t r y can be quict:ly t o l d . Stocltfeeds are
almost e n t i r e l y l o c a l l y produced from inputs themselves supplied

y the a g r i c u l t u r a l sector; they include maize meal, limestone,
f l o u r , milk powder and groundnut, sunflower, soyabean and cotton
seed cake. The only imported items are e i t h e r s p e c i a l i s e d
products with l i m i t e d demand (such as fishmeal f o r p o u l t r y
breeding stock) or of raw m a t e r i a l s for h i g h l y complex m a t e r i a l s ,
l i k e s a l t and vitamins which are not l o c a l l y a v a i l a b l e . 1986
estimates suggested that out of 400,000 tonnes of stockfeeds
a v a i l a b l e i n the country, only 14,000 tonnes needed to be
imported at a cost of $5.2 mn and equivalent to only 5.7% of the
current value of the stockfeeds produced (The F i n a n c i a l Gazette,
6 June 1986). Imported g r a i n bags, c o s t i n g some $28 mn i n
1985''!, but averaging about $5 mn a year i n recent years, are
being phased out with the coming on stream of a $10 mn polyweave
bag plant b u i l t by the l o c a l company Treqers of Bulawayo (see The
F i n a n c i a l Gazette, 20 June 1986).
A g r i c u l t u r a l crop chemicals c o n s i s t of a wide array of d i f ­
ferent, mostly s p e c i a l i s e d , products of which the most important
are i n s e c t i c i d e s , h e r b i c i d e s and f u n g i c i d e s , accounting f o r over
80% of o v e r a l l crop chemical demand, followed, i n order of
p r i o r i t y , by d i s i n f e c t a n t s , hormones, v e t e r i n a r y medicaments,
l i v e s t o c k dip chemicals and various a n t i b i o t i c s . By f a r the
biggest s i n g l e user i s the tobacco i n d u s t r y which i n 1984/5
purchased $24 mn of chemicals''^ . Most of the dozen or so firms
involved i n the crop chemical industry are i n v o l v e d i n e i t h e r the
d i s t r i b u t i o n of products imported i n t h e i r f i n a l formulated form
or of c a r r y i n g out simple formulation with e m u l s i f i e r s , solvents
and s u r f a c t a n t s ; only one product i s manufactured i n the country
- copper oxychloride made by Cecon E n t e r p r i s e s from l o c a l raw
m a t e r i a l s . L i t t l e basic research appears to be done w i t h i n the
i n d u s t r y to develop new manufacturing p o t e n t i a l , r e f l e c t i n g the
o v e r a l l lack of a basic chemical i n d u s t r y i n the country (Cochrane
and Donoso, 1987:18). As a r e s u l t , l i t t l e s u b s t a n t i a l change
i n the l o c a l manufacture/import r e l a t i o n s h i p of crop chemicals i s
l i k e l y to occur u n t i l the l a r g e r debate about the development of
the wider chemical i n d u s t r y and the ethanol or methanol route to
expansion i s r e s o l v e d ' " .
The l o c a l supply of a g r i c u l t u r a l implements has already been
discussed above. However, a word should be added about t r a c t o r s
and s p e c i a l i s e d mechanised equipment, such as combines. A l l
these high-cost items have t r a d i t i o n a l l y been imported i n t o the
country, more r e c e n t l y i n unassembled form, and have been made
ready f o r operation l o c a l l y , with varying degrees of l o c a l
content c o n t r i b u t i n g to the f i n a l product. Most l o c a l development
has occurred i n the t r a c t o r market although increases i n
l o c a l content and i n the domestic manufacture of spares has been
hampered both by the array of d i f f e r e n t models imported (some
under the auspices of f o r e i g n a i d programmes), now widely
acknowledged by farmers as a problem, and by the smallness of the
market and the'age of the current t r a c t o r f l e e t ' ' " .
Amongst recent advances have been the production of the
Zambezi A445 (45 horse-power) and the Zambezi A124 (24 horsepower)
t r a c t o r s by the Zambezi Engineering Group. Although
neither of these v e h i c l e s i s p a r t i c u l a r l y s u i t e d to the l a r g e r

commercial farming sector'"', there does seem to be an increased
domestic and r e g i o n a l market e s p e c i a l l y f o r the smaller v e h i c l e s .
Currently the d i r e c t l o c a l content of these v e h i c l e s ranges from
30% to 50% of value of inputs used. While there has been some
d i s c u s s i o n (for example with both Romania and India) about the
p o s s i b i l i t y of b u i l d i n g a s o p h i s t i c a t e d t r a c t o r f a c t o r y i n the
region, l i t t l e s u b s t a n t i a l f e a s i b i l i t y and c o s t i n g work on such a
p r o j e c t has yet been c a r r i e d out. Meanwhile f o r both l a r g e r
t r a c t o r s and h i g h l y s o p h i s t i c a t e d machinery l i k e combines, the
domestic manufacturing component of such equipment i s u n l i k e l y to
change r a d i c a l l y over the coming few years. Hence the current
acute shortage of such v e h i c l e s i s only l i k e l y to be addressed i n
the medium term with an easing of the current o v e r a l l f o r e i g n
exchange shortage.

VI.
COMCLUSIONS
6.1 Some Missing Elements
Although t h i s paper on the process and e v o l u t i o n of Zimbabwe's
manufacturing sector i s lengthy, a word or two needs to be
added to e x p l a i n a number of issues of importance which have
received i n s u f f i c i e n t a t t e n t i o n . For instance, two features of
Zimbabwe's evolving i n d u s t r i a l s t r u c t u r e i n s u f f i c i e n t l y highl
i g h t e d i n the previous d i s c u s s i o n are the extent of the development
of the c a p i t a l goods sector and the l e v e l and degree of
i n t e r - l i n k a g e that has developed w i t h i n the manufacturing sector
between the d i f f e r e n t sub-sectors'''.
Figure 23. Sources of Growth, Metals Sub-Sector, 1952/53 to 1982/83.
120
1 9 5 2 / 3 - 8 2 / J 1&52/3-€.4/S 1 9 6 4 / 5 - 7 6 / 9 1 9 7 8 / 9 - 6 2 / 6 3
1/ /I Dcmeslc cte.-nand [^Sl E>.portE V//A IrriP' Sutjst.
Source:
As for Figure 5, above.

The s t a t i c c h a r a c t e r i s t i c s of today's manufacturing sector,
shown i n Table 1, above (page 3) f a i l to capture these important
features. Although the importance of sub-sector 9, Metals and
Metal Products, i s i n d i c a t e d there, i t should be added that i t s
p a r t i c u l a r c o n t r i b u t i o n to t o t a l MVA had already reached 17% by
1960; i t rose to a peak of 32% i n 1975 and has only r e c e n t l y
f a l l e n back to below 25% of t o t a l MVA. The unique development
over time of the Metals and Metal Products sub-sector (9) i s
shown c l e a r l y , i n Figure 23, derived from the "sources" of
growth data.
Comparing Figure 23 with the pattern f o r manufacturing as a
whole shown i n Figure 5, above, reveals not only the dominance
played by import s u b s t i t u t i o n i n contrast with domestic demand
but the long term and r i s i n g s i g n i f i c a n c e of export expansion i n
o v e r a l l growth.
The extent of intra-manufacturing linkages present i n
Zimbabwe i s revealed by the data i n Table 18. I t shows that
Table 18.
Inputs into Manufacturing Obtained From Within the
Manufacturing Sector, 1975 and 1981/82.
Total
% of
from
Manufact
Sub- Total of which Manuf­ uring In-
Sector Inputs imported acturing puts f rom
$ mn. $ mn. % $ mn. % s/sector 9
1 214.0 19.2 9 52.9 25 12.8
2 40.5 4.1 10 17 .5 43 11.7
3 92.0 32.2 35 46 .9 51 10.4
4 52.5 13.1 25 33 .7 64 4.2
5 20.8 8.3 40 9 .4 45 18.8
6 37.9 19.7 52 14. .2 38 10.4
7 102.7 60.9 59 27, .5 27 16.9
8 23.5 7.0 30 7, .8 33 57.3
9 183.4 86.3 47 57, .1 31 82.3
10 32.2 26.4 82 5 .3 16 48.5
11 6.3 3.8 60 0, .5 8 51.4
TOTAL 805.8 281.0 35 272.! i 34 31.0
Notes: 1. All data are for 1975 except the last column which
are for 1981/82.
Source: UNCTAD (1980:354-355) and UNIDO (1986b:153).

o v e r a l l , 34% of a l l the inputs used by the d i f f e r e n t manufact
u r i n g sub-sectors are obtained from w i t h i n the manufacturing
sector i t s e l f and that f o r sub-sector 9, over 30% of a l l inputs
are obtained from w i t h i n other parts of the manufacturing sector.
For s i x of the 11 sub-sectors, the value of inputs obtained from
w i t h i n manufacturing exceeds the value of imported inputs - f o r
sub-sector 1, Foodstuffs, a greater value of inputs are obtained
from manufacturing than from the a g r i c u l t u r a l sector of the
economy. F i n a l l y , the l a s t column of Table 16 reveals that of
the inputs obtained from w i t h i n manufacturing, a s i g n i f i c a n t
proportion (31%) come from sub-sector 9, Metals and Metal
Products, ranging from a low of 4.2% f o r sub-sector 4 to a high
of 82% f o r sub-sector 9 i t s e l f .
6.2 Towards I n d u s t r i a l i s a t i o n i n t o The 1990s
The story of i n d u s t r i a l i s a t i o n i n Zimbabwe i s undoubtedly
one of success. Among the main achievements are the f o l l o w i n g :
widespread and sustained expansion; a deepening of the i n d u s t r i a l
s t r u c t u r e with the development of s u b s t a n t i a l i n t e r - l i n k a g e s
w i t h i n manufacturing and with other sectors of the economy and
the e v o l u t i o n of a manufacturing sector much of which appears to
be i n t e r n a t i o n a l l y competitive. I t i s also apparent, however,
that the successes that have been achieved down to the present
day provide l i t t l e guarantee that they can be repeated over the
next h a l f century - indeed over the next 10 years - unless
changes take place and, i n t e r a l i a , the p o l i c y environment i s
a l t e r e d to address the s u b s t a n t i a l problems now f a c i n g the
sector .
Since Independence i n 1980, the performance of the manufact
u r i n g sector has been c h a r a c t e r i s e d by a much greater and more
enduring v o l a t i l i t y than during any other s i x to seven year
period since the 1939-45 war. On the supply side, shortages of
f o r e i g n exchange f o r intermediate inputs, spares and f o r c a p i t a l
expansion present an e v e r - i n c r e a s i n g c o n s t r a i n t not only by
severely r e s t r i c t i n g future expansion even i n the short to medium
term but, as a r e s u l t of i n h i b i t i n g replacement investment and
preventive maintenance, by eroding the very foundations of the
manufacturing base of the country. There i s no doubt, too, that
the inward-looking nature of the sector has accelerated since the
mid-1970s and that as a r e s u l t manufacturing's c o n t r i b u t i o n to
n a t i o n a l f o r e i g n exchange saving and earning has d e t e r i o r a t e d .
There i s nothing i n t r i n s i c a l l y wrong i n the f a c t that manufacturing
i s an i n c r e a s i n g user of f o r e i g n exchange; what i s d i s t u r b i n g
i n the Zimbabwean case i s that t h i s has been o c c u r r i n g a f t e r a
prolonged period of i n d u s t r i a l i s a t i o n and at a time when the
capacity of the primary exporting sectors to earn more f o r e i g n
exchange f o r the country has i t s e l f been constrained.
These problems have been p a r t i c u l a r l y h i g h l i g h t e d by c r i t i c s
and commentators as have c e r t a i n demand problems such as f a l l i n g
r e a l incomes i n the modern sectors of the economy and the
decreasing a b i l i t y of neighbouring countries to purchase Zimbabwean
manufactured exports, many of which remain (or i n some
instance have r e c e n t l y become) i n t e r n a t i o n a l l y competitive. I t

i s the combination of these f a c t o r s which has led to i n c r e a s i n g
demands f o r the i n s t i t u t i o n a l framework of the sector to be
changed and f o r a more l i b e r a l / o p e n s t r u c t u r e to be i n s t a l l e d
which w i l l provide the i n c e n t i v e s to reverse some of these
adverse trends and to r e - o r i e n t the sector more to the e x t e r n a l
economy through both easing the import supply problems and by
r a i s i n g the absolute and p r o p o r t i o n a l l e v e l of i t s exports. I t
i s , however, by no means c l e a r that the i n t e r n a t i o n a l economy
w i l l act i n the b e n e f i c i a l way expected f o r these v i r t u o u s
r e s u l t s to occur.
There are other broader issues which need to be faced. For
instance, the growth of Zimbabwe's manufacturing i n d u s t r i e s
occurred not only because of the fortunate i n t e r a c t i o n of a
favourable p o l i t i c a l environment, the i n f l o w of f o r e i g n c a p i t a l
and the presence of an able stock of t e c h n i c i a n s , engineers and
entrepreneurs at key points i n i t s c o l o n i a l h i s t o r y and during
the UDI period, but also to a d i s t r i b u t i o n of income, n a t i o n a l l y
and r e g i o n a l l y at l e a s t , which ensured a sustained, but a r t i f i ­
c i a l l y r e s t r i c t e d , demand f o r a range of reasonably high q u a l i t y
goods that Zimbabwe was able to produce. While t h i s c e r t a i n l y
a s s i s t e d the smooth t r a n s i t i o n from supplying the domestic to
supplying the (regional) export market f o r a range of products
manufactured, i f the d i s t r i b u t i o n of income i n Zimbabwe had been
or were to be l e s s skewed and unequal, then the need f o r both the
current l e v e l of imported inputs and f o r seeking e x t e r n a l rather
than an expanded domestic market would be reduced. R a i s i n g the
income l e v e l s of the r u r a l poor majority would lead to an
expansion i n the demand for and hence the domestic production of
l e s s complex and thus l e s s import-dependent manufactured products
which would a s s i s t i n c r e a t i n g the f l e x i b i l i t y now required to
a l t e r what could r a p i d l y become an o s s i f i e d i n d u s t r i a l base. I t
would also provide a l e s s r i s k y a l t e r n a t i v e than r a p i d l y dismant
l i n g the system of c o n t r o l s which has served the sector w e l l f o r
so many years and exposing Zimbabwe's manufacturing industry to
the vagaries of the i n t e r n a t i o n a l economy. C l e a r l y d i f f i c u l t
choices have to be made.
There appears to be a tendency i n the contemporary problemfocussed
debate about Zimbabwean i n d u s t r y to conceal or f a i l to
l a y emphasis upon many of i t s continuing strengths and assets
which have e i t h e r been maintained or even enhanced i n the post-
Independence period. The ingenuity, a d a p t a b i l i t y and resourcefulness
of those running the manufacturing sector, an important
c o n t r i b u t o r to the country's i n d u s t r i a l achievements, i s not only
s t i l l a predominant feature of Zimbabwe i n the l a t e 1980s but i t
has been enhanced by two recent developments: f i r s t , - the exodus
of some 50% of the more r a c i s t (and c l e a r l y more mobile) members
of the s e t t l e r community and, second, by the success achieved by
black Zimbabweans i n a c q u i r i n g these d i v e r s e s k i l l s which, f o r
decades, they were denied from a c q u i r i n g through i n s t i t u t i o n a l
f i a t and s o c i a l mores. This covers the range of p o s i t i o n s from
senior managerial and engineer, to t e c h n i c i a n and s k i l l e d and
s e m i - s k i l l e d operatives.

In s p i t e of f o r e i g n exchange shortages, new investment i n
manufacturing i s continuing - the expansion of the t e x t i l e and
f o o d s t u f f s sub-sectors, f o r example, has been i n large measure
the r e s u l t of the most s u b s t a n t i a l i n j e c t i o n of new c a p i t a l i n t o
these sub-sectors f o r decades. Zimbabwe's f i n a n c i a l i n f r a s t r u c ­
ture remains h i g h l y developed by worldwide and not j u s t " A f r i c a n "
standards, while the steady process of computerisation w i t h i n
both the f i n a n c i a l and commercial sectors i s equipping the
country i n c r e a s i n g l y with the basic i n f r a s t r u c t u r e necessary to
compete world-wide. S i m i l a r l y the p h y s i c a l i n f r a s t r u c t u r e i s
improving while, i n general, being maintained i n a high degree of
e f f i c i e n c y with the e l e c t r i f i c a t i o n of the r a i l w a y system, a
h i g h l y interconnected and w e l l maintained road system, adequate
e l e c t r i c a l power to s u s t a i n r a p i d and, i f i t were to occur, even
more e l e c t r i c a l l y - i n t e n s i v e manufacturing expansion and an
i n c r e a s i n g l y automatic, s a t e l l i t e - l i n k e d telecommunications
system.
I t i s the presence, maintenance and f r e q u e n t l y the expansion
of a l l these e s s e n t i a l b u i l d i n g - b l o c k s required f o r the f u r t h e r
enlargement of Zimbabwe's manufacturing sector - so often absent
or inadequate i n so many t h i r d world and e s p e c i a l l y SSA countries
- which places i n proper context the problems which the sector
undoubtedly faces as the country moves i n t o and plans f o r
development i n t o the 1990s. P r e c i s e l y what options Zimbabwe has
for the development of i t s manufacturing sector i n the mediumterra
and the room f o r manoeuvre i t has to loosen the c o n s t r a i n t s
i t faces w i l l be discussed i n the second paper i n t h i s s e r i e s .

MOTES
1. The need for s u b s t a n t i a l s t r u c t u r a l change i s discussed, i n t e r
a l i a , i n Stoneman (1984), Government of Zimbabwe (1986), UNIDO
(1986b), Ndlela i n Mandaza (1986), World Bank (1987), Robinson
(1987) and Hawkins (1987). These d i f f e r e n t w r i t e r s , however, are
f a r from unanimous about the p r e c i s e nature of the s t r u c t u r a l
change required and therefore about the best p o l i c i e s to adopt
for the future.
2. A comprehensive Census of Production i s produced annually
covering a wide v a r i e t y of i n d u s t r i a l s t a t i s t i c s grouped i n t o 33
sub-sectoral categories; a d d i t i o n a l l y a manufacturing volume
index broken down i n t o 11 sub-sectors i s published monthly while
comprehensive trade s t a t i s t i c s are published annually. Most time
s e r i e s data goes back to 1954, some as f a r back as 1938, although
dis-aggregated trade data i s not a v a i l a b l e f o r Zimbabwe alone
during the period of the Federation of Rhodesia and Nyasaland
(1954 to 1963).
3. The p u b l i c a t i o n s l i s t e d i n note 1 provide a wide range of
d i f f e r e n t p r e s c r i p t i v e p o l i c i e s for the future.
4. The s e l e c t i o n of these p a r t i c u l a r aspects of Zimbabwe's
manufacturing i n d u s t r y r e l a t e s to methodology of the l a r g e r
p r o j e c t " I n d u s t r i a l i s a t i o n i n Sub-Saharan A f r i c a " of which the
Zimbabwean case c o n s t i t u t e s only one element.
5. The Rhodesian Iron and S t e e l Commission was e s t a b l i s h e d
i n 1942.
6. For some d i s c u s s i o n of the o r i g i n s of manufacturing i n
Zimbabwe see A r r i g h i (1967), I r v i n e (1959), Barber(1961). More
recent and comprehensive work i s c u r r e n t l y being done by Ian
Phimister at the U n i v e r s i t y of Cape Town. See, f o r example,
Phimister (1987).
The current Zimbabwean i n d u s t r i a l c l a s s i f i c a t i o n and the one
mostly used throughout t h i s paper (unless s p e c i f i c reference i s
otherwise made) d i v i d e s manufacturing i n t o 11 sub-sectors as
f o l l o w s :
1. Foodstuffs.
2. Beverages and Tobacco.
3. T e x t i l e s .
4- C l o t h i n g and Footwear
5- Wood and F u r n i t u r e .
6. Paper and Paper Products.
7. Chemical and Pharmaceutical Products.
8. Non-Metallic Minerals.
9. Metals and Metal Products.
10. Transport Equipment.
11. Miscellaneous Manufactured Products.
For the manner i n which the 33 sub-sectoral c l a s s i f i c a t i o n i s
grouped to produce the 11 sub-sectoral c l a s s i f i c a t i o n see UNIDO

(1986b:62-63).
7. S t r i c t l y speaking i t was the manufacturing sector of "Southern
Rhodesia", f o r under i n t e r n a t i o n a l convention the country was not
known as Zimbabwe u n t i l Independence i n A p r i l 1980. Those l i v i n g
i n the country a f t e r the U n i l a t e r a l D e c l a r a t i o n of Independence
{UDI) i n 1965 c a l l e d the country "Rhodesia" u n t i l they again
changed the name i n 1979 to "Zimbabwe Rhodesia". For
s i m p l i c i t y ' s sake the country w i l l be r e f e r r e d to here as
"Zimbabwe" throughout.
8. Given the poor q u a l i t y , or not i n f r e q u e n t l y the non-existence,
of the n a t i o n a l s t a t i s t i c s of many A f r i c a n countries, these can
only be rough comparisons; yet they would tend to underplay the
contrasts between most SSA countries today and Zimbabwe of the
l a t e 1930s. Zimbabwean f i g u r e s are estimated from (Barber,
1961:98-115,198-202; Irvine,1959:324 and CSO,1955:6); SSA
s t a t i s t i c s from the f o l l o w i n g sources: f o r the MVA/GDP r a t i o ,
UNIDO (1986a:Table 2), trade data from World Bank(1987:222-223)
and f o r employment data, (110,1984:255-265).
9. Throughout the paper, the "$" sign w i l l be used to represent
Zimbabwe d o l l a r s , unless otherwise s p e c i f i c a l l y stated.
10.It i s a f a r from easy task to decide which products to include
w i t h i n the broad "manufacturing" group and which, f o r example to
group w i t h i n " a g r i c u l t u r e " and mining". As can be seen from
these d i f f e r e n t export f i g u r e s , to c l a s s i f y cotton l i n t and
f e r r o - a l l o y s as manufactured products almost doubles the f i g u r e
of t o t a l exports f o r the country. A good d i s c u s s i o n of these
sorts of problems i s contained i n UNIDO (1986b:47-57). For the
purposes of the present paper, we f o l l o w the p r a c t i c e of the
Central S t a t i s t i c a l O f f i c e , Harare, and consider as
"manufacturing" a l l enterprises incorporated i n t o the annual
census of production. In broad terms t h i s means that cotton l i n t
and f e r r o - a l l o y production and exports are included i n the
d e f i n i t i o n of manufacturing but that the processing/manufacturing
of other metals (such as t i n , copper and n i c k e l ) are excluded
both from the production and trade data f o r the manufacturing
sector.
11. Throughout t h i s paper, both Gross Output and Net Output
exclude sales of goods not produced on the premises. Value Added
i s defined as net output l e s s payments f o r s e r v i c e s .
12. As i s brought out i n more d e t a i l below, there were, of
course, v a r i a t i o n s year by year i n l e v e l s of i n d u s t r i a l product
i o n : the rate of expansion slowed, f o r instance i n the l a t e
1940s and l a t e 1950s, c o n t r a c t i o n set i n i n the l a t e 1970s and i n
the 1980s greater v o l a t i l i t y i n production have been experienced.
13. For data and a d i s c u s s i o n on these issues see Clarke (1975)
and Harris (1974).
14. For a good o u t l i n e of the array of b a r r i e r s put i n the way of
blacks i n the productive sector see ILO (1978).

15. Of the more s u c c e s s f u l , mention could be made of Mr. Enos
Chiura, the Chairman of the Delta Corporation, the l a r g e s t
conglomerate xn the country, Mr. A r i s t o n Chambati, the Chief
Executive of TA Holdings, Mr. Charles Nyereyegona, Chairman of
Lever Brothers and Mr. George Nyandoro, the Chairman of Art
P r i n t e r s - a l l companies that have expanded s u b s t a n t i a l l y and
e i t h e r maintained or r a i s e d p r o f i t l e v e l s since coming under thrmanagement
c o n t r o l of black Zimbabweans.
16. See UNIDO (1986b:71-78).
17. In e a r l y November 1987, the Government had acquired 37% of
the stock of Delta and had declared i t s i n t e n t i o n s (at l e a s t
temporarily halted) of a c q u i r i n g a t o t a l of at l e a s t 50.1% of
Delta's stock.
18. As r e f e r r e d to i n Note 9, above, data used i n these c a l c u l a ­
tions include f e r r o - a l l o y s and i r o n and s t e e l but exclude the
production, export or import s u b s t i t u t i o n of processed metals.
The equation used was:
50 = Ol X 5DD + Ol X 5X + { 0,2 - Oi I y (O
+M)2
(O + M)i (O + M)i (O + M)2 (O + M)i
where O = Gross Output,
DD = Domestic Demand
X = Exports
M = Imports.
The f i g u r e s were c a l c u l a t e d net of sales tax. Published
i n t e r n a t i o n a l trade s t a t i s t i c s are given as f o b / f o r . For the
purposes of the current a n a l y s i s t h i s was acceptable f o r exports
but not f o r imports. Thus import data had to be changed to
include the cost of f r e i g h t and insurance ( i . e . to be imports
c . i . f . ) . IMF trade s t a t i s t i c s use an a r b i t r a r y 15% increase to
convert imports from fob to c i f . This crude estimation was
r e j e c t e d because of the s u b s t a n t i a l v a r i a t i o n i n f r e i g h t and
insurance costs f o r imports coming from southern A f r i c a ( l a r g e l y
from South A f r i c a ) and those obtained from overseas. Unpublisheci
data k i n d l y provided to the author for t h i s exercise by the
Central S t a t i s t i c a l O f f i c e , Harare, showed that over the two year
period 1984 and 1985 the c i f value of imports from southern
A f r i c a averaged 10% a year more than t h e i r fob value whereas the
c i f value of imports from overseas was 30% higher than t h e i r
respective fob values. As the d i r e c t i o n of fob imports f o r the
years 1952/53, 1964/65 1980/81 and 1982/83 could be found from '
published fob trade data, these increased c i f amounts were added
p r o p o r t i o n a t e l y to the trade data r e c l a s s i f i e d i n t o the 11
i n d u s t r i a l sub-sectors. This gave a weighted increase of between
23% and 25% f o r a l l manufactured imports f o r these years. For
the UDI years, estimates of trade d i r e c t i o n were made based on
the known d i r e c t i o n of trade s t a t i s t i c s f o r 1964/65 and 1980/81 .
In Zimbabwe t a r i f f l e v e l s have h i s t o r i c a l l y been t y p i c a l l y

low f o r manufactured imports both because of the importance of
Commonwealth preferences and because of the s p e c i a l trade
agreement with South A f r i c a (see Jansen (1983) and Cole (1968)).
Customs duties f o r most raw material inputs range from zero to
only 5% of the c i f value; at Independence i n 1980 Jansen
estimated that weighted average customs duties and taxes on
imports were l e s s than 5%. With the i n c l u s i o n of the 20% import
surtax, the 1986 Commission of Inquiry i n t o Taxation c a l c u l a t e d
that the average t o t a l t a r i f f f o r a l l imported goods averaged
only 21.1%, i n c l u d i n g an e f f e c t i v e t a r i f f rate of over 60% f o r
f u e l , i t s e l f responsible f o r over 60% of t o t a l import d u t i e s ;
the average rate for machinery was 9.2% and of other i n t e r ­
mediates 10.5%, again i n c l u d i n g the 20% surtax charge. (See
C h e l l i a h 1986: 96-98.)
Estimates of the sources of growth f o r 1982 and 1983 were
made with and without the i n c l u s i o n of t a r i f f s . As the o v e r a l l
r e s u l t i n g data d i d not vary by more than 1% from the data
c a l c u l a t e d without the i n c l u s i o n of t a r i f f s to imports (and
because the exercise of estimating c i f imports i n c l u s i v e of
t a r i f f s would have taken many weeks to complete) the current
c a l c u l a t i o n s do not incorporate the increases i n imports due to
t a r i f f s . Hence, the o v e r a l l data therefore would tend (marginally)
to under-estimate the importance of import s u b s t i t u t i o n i n
decomposing the d i f f e r e n t elements of growth.
19. The f i g u r e s contained i n t h i s paper and those f o r 1965 to
1979 i n the World Bank's 1987 I n d u s t r i a l Sector study of Zimbabwe
(p. 12) d i f f e r quite markedly, except f o r C l o t h i n g and Footwear
and Paper and Paper Products. As the World Bank provides no
d e t a i l s of how i t s f i g u r e s were derived i t i s not possible to
compare the methodologies used.
20. As can be seen from the graph, p o s i t i v e export growth and
domestic demand growth i n excess of 100% i s achieved because of
the negative e f f e c t of import s u b s t i t u t i o n change.
21. Supported, i f only marginally, i n the contrast between the
Federal and UDI periods when, r e s p e c t i v e l y , the change i n
domestic demand rose from 36% to 60% of the t o t a l and the change
i n export growth f e l l from 10% to 9%.
22. I am g r a t e f u l to Rob Davies for b r i n g i n g t h i s point to my
a t t e n t i o n . Davies i l l u s t r a t e s h i s point by taking the hypothetic
a l example of Zimbabwe e s t a b l i s h i n g a t r a c t o r f a c t o r y which
leads to a h a l v i n g cif the number of t r a c t o r s imported. Using the
Chenery methodology t h i s would show up as import s u b s t i t u t i o n
only i n year one but surely, he argues, we should count the
t r a c t o r s produced i n year two also as import s u b s t i t u t i o n . In
other words to give a more accurate p i c t u r e , the import s u b s t i t u ­
t i o n e f f e c t s should be cumulatively assessed, although there
would be problems and a greater component of value judgment i n
the attempt to address adequately t h i s anomaly.

23. For instance m J u l y 1987, A f r i c a n D i s t i l l e r s announced plans
to i n s t a l l new plant and technology with the o b j e c t i v e of
r e p l a c i n g a l l imported brandy with a l o c a l l y manufactured
product. This w i l l save over h a l f a m i l l i o n d o l l a r s annually. A
month e a r l i e r Hoechst, Zimbabwe announced the commissioning i n
September of a chemical plant which i s expected to save between
$1.4 mn and $1.5 mn a year through import s u b s t i t u t i o n . See The
F i n a n c i a l Gazette, 19 June 1987 and 24 J u l y 1987. These
i n i t i a t i v e s are f a r from exceptional; i t i s rare f o r an announcement
of s i m i l a r i n i t i a t i v e s not to appear i n the Zimbabwe press
on a monthly b a s i s .
24. S t r i c t l y speaking i t i s not " a l l " , f o r the trend i s reversed
for sub-sector (11) Miscellaneous. However t h i s grouping
contains both a rag-bag of i n d u s t r i e s and, a d d i t i o n a l l y , a
grouping whose separate i n d u s t r i e s have changed s i g n i f i c a n t l y i n
the course of the past 30 years.
25. While t h i s tends to f l y i n the face of a good deal of the
theory of the i n d u s t r i a l i s a t i o n process i n t h i r d world countries,
i n seeking an explanation f o r such a phenomenon one would also
need to look i n t o the respective p r i c e / p r o f i t a b i l i t y i n c e n t i v e s
i n the two periods.
26. For Foodstuffs ( l ) , t h e d i f f e r e n c e s were i n f a c t only
marginal. However the contrast even for Foodstuffs was greater
i n comparison with the other sub-sectors when the r e l a t i v e drop
i n export growth was very marked.
27. Cotton production was n e g l i g i b l e i n 1952/53 and was valued at
l e s s than $1 mn i n 1964/65; by the end of UDI, however,
production had r i s e n to $70 mn. Cotton l i n t exports were none
x i s t e n t i n 1952/53, and 1964/65 but had r i s e n to $43 mn by
1978/79. For t h e i r part, f e r r o - a l l o y exports were valued at a
mere $48,000 i n 1953, r i s i n g to a s t i l l small $3.4 mn i n $1964/65
and to a s u b s t a n t i a l $40 mn by the end of the UDI period {when,
i t should be added, d i f f i c u l t i e s of exporting during sanctions
had l e d to s t o c k p i l i n g ) .
23. The s t r u c t u r e of exports changed quite d r a m a t i c a l l y during
the e a r l y part of the UDI period, e s p e c i a l l y during the f i r s t few
years of UDI. For instance, the exports of unmanufactured tobacco
f e l l back from $94 mn i n 1965 to $17 mn i n 1966 and d i d not reach
t h e i r pre-UDI l e v e l s again (at current prices) u n t i l j u s t before
Independence. Also during UDI there was a more than f i v e f o l d
increase i n the current p r i c e value of a g r i c u l t u r a l exports and a
doubling of non-gold mineral exports. According to CSO f i g u r e s ,
manufactured exports rose s t e a d i l y a f t e r 1968 f o l l o w i n g an
immediate 25% f a l l i n t h e i r value at current p r i c e s . They then
increased s t e a d i l y and rose s l i g h t l y as a proportion of t o t a l
commodity exports. Thus the s t r a i g h t l i n e trend shown i n Table 5
does conceal some f l u c t u a t i o n s e s p e c i a l l y i n the three or four
years immediately f o l l o w i n g UDI.

29. As gross output data f o r i r o n and s t e e l , ferro-chrome and
cotton l i n t production i s not separately a v a i l a b l e , i t i s not
possible to provide data of the export to gross output r a t i o
without the i n c l u s i o n of these products.
30. Data compiled from the June 1987 e d i t i o n of the Quarterly
Digest of S t a t i s t i c s , Table 10.5
31. Trade data r e v e a l the f o l l o w i n g trend i n manufacturing to
t o t a l exports;
Manufactured Exports
As Proportion of a l l Commodity exports
1981 1985 1986
Manufactured exports 36.6 45.9 41.8
( i n c l u d i n g ferro-chrome
and cotton l i n t )
Less ferro-chrome and
cotton l i n t 16.2 19.1 17.7
Source: CSO, Export Data by Commodity and Country of Origin,1984
to 1986, (mimeo), 1988.
32. CZI, State of the Manufacturing Sector Triannual Survey For
The Month Period Ending 20 November 1987, Harare, CZI, 1988, p.13.
33. Hence r i s i n g manufactured imports over time would be a
p o s i t i v e not a negative i n d i c a t o r of development.
34. Aggregate data can give l i t t l e but a crude i n d i c a t i o n of
these expected trends because import data, e s p e c i a l l y of those
sub-sectors embracing intermediate and c a p i t a l goods, would
include both those imports of simpler intermediate products and
of f i n a l f i n i s h e d goods. Thus, f o r instance, a r i s e i n the
imports of "chemicals" might be occurring because of a r i s e i n
domestic demand f o r f i n a l chemical products with l i t t l e change i n
the s t r u c t u r e of the chemical i n d u s t r y or i t might be because of
a deepening of the productive base of the sector due to f u r t h e r
import s u b s t i t u t i o n and/or export expansion.
35. Sub-sectors (1),(2),(3),(4),(5) and (8) are c l a s s i f i e d as the
simpler, more consumption products while sub-sectors (6),(7),(9)
and (10) are grouped together as the more intermediate and
c a p i t a l goods sub-sectors.
36. There has, p e r i o d i c a l l y , been intense debate about whether
Zimbabwe's manufacturing sector i s a net user or earner of
f o r e i g n exchange f o r the country. At t h i s l e v e l , and f o r the
purposes of p o l i c y change, such debate i s s t e r i l e and of l i t t l e
value, both because f o r most countries attempting to i n d u s t r i a l i ­
se, t h e i r manufacturing sectors are net users of f o r e i g n exchange
f o r many decades (see Chenery et a l . 1987) and because a s t a t i c
a n a l y s i s of f o r e i g n exchange earning and absorption ignores an

equally s t e r i l e question of the f o r e i g n exchange saved by
importing the inputs to manufacture goods rather than importing
the f i n a l product. The 1986 UNIDO study made some crude ( s t a t i c )
estimates of d i r e c t f o r e i g n exchange usage and earnings of the
manufacturing sector. I t showed that i n 1982, the manufacturing
sector u t i l i s e d some $480 mn i n f o r e i g n exchange,whereas
manufactured exports t o t a l l e d $277 mn, g i v i n g a "net l o s s " to the
economy of $203 mn, but also, c o r r e c t l y pointed out that were
Zimbabwe to have closed down i t s manufacturing sector, foregone
i t s manufactured exports and imported those products i t was
c u r r e n t l y manufacturing then the net f o r e i g n exchange loss f o r
that year would have amounted to $2,237 mn, over twice the t o t a l
import b i l l f o r that year. (1986b:38-43)
37. Such a f i g u r e would be extremely d i f f i c u l t to compute f o r i t
would have not only to be based on the value of d i r e c t imports
from d i f f e r e n t sources but a l s o on the estimated f o r e i g n exchange
component of d o m e s t i c a l l y produced goods, i n c l u d i n g - i f i t were
to be accurate - the discounted f o r e i g n exchange component of the
c a p i t a l equipment used i n the manufacturing process, as w e l l as
the f o r e i g n exchange component of energy u t i l i s e d .
38. The f i g u r e s by sub-sector were as follows (UNIDO, 1986b:70):
(I) - 2.4% imported; (2) - 24%; (3) - 23%; (4) - 39%; (5) - 14%;
(6) - 24%; (7) - 52%; (8) - 16%; (9) - 41%; (10) - 60%;
(II) - 25%.
39. The complex linkages e x i s t i n g between the i n d u s t r i a l subsectors
and between manufacturing and the other sectors of the
economy are discussed most completely i n UNIDO, 1986b, e s p e c i a l l y
i n Chapter 4 and Annexes A to F, pages 355 to 404.
40. C l e a r l y such an index, which records a c t u a l trade flows,
cannot r e f l e c t trends i n e i t h e r p o t e n t i a l or suppressed demand.
As during the UDI period one o b j e c t i v e of p o l i c y was to maintain
balance of the current account of the balance of payments, import
a l l o c a t i o n s were fine-tuned not to exceed more than marginally
the value of export r e c e i p t s . This l e d to a lower l e v e l of
imports than under a l e s s c o n t r o l l e d environment would have been
achieved. I t would have been l i k e l y to have had the e f f e c t of
i n f l a t i n g the s e l f - s u f f i c i e n c y index.
41. The 1982 data was produced by a team of United States
consultants and graduate students under the leadership of a
p r i v a t e independent consultant. Dr. Doris Jansen. As the raw
data c o l l e c t e d was taken from Zimbabwe to the United States i t
has subsequently not been p o s s i b l e to examine the raw data. See
Jansen (1983) .
42. E s p e c i a l l y i f one concurs with the widely-held view that
because the 1982 c a l c u l a t i o n s almost c e r t a i n l y use a s u b s t a n t i a l ­
l y over-valued exchange rate (at l e a s t 15% too high) and because
they f a i l to use shadow p r i c e s , they s i g n i f i c a n t l y underscore the
degree of competitiveness. See R i d d e l l (1983), Stoneman (1985),
IBRD (1987:66).

43. Regrettably the a v a i l a b l e data does not permit one to t e s t
the hypothesis that Zimbabwe's manufacturing sector would have
been even more competitive i n t e r n a t i o n a l l y i n the absence of
these inward-oriented p o l i c i e s .
44. See e s p e c i a l l y pages 41 to 48.
45. For a good d i s c u s s i o n of both the t h e o r e t i c a l problems of DRC
approaches and the s p e c i f i c problems of t h e i r use (and misuse i n
Zimbabwe) see Stoneman (1988b>.
46. This includes cotton l i n t , ferro-chrome and s t e e l exports but
excludes a l l other processed metal products. These f i g u r e s were
derived from published Statement of External trade data and
information provided by the Central S t a t i s t i c a l O f f i c e .
47. That i s , i n c l u d i n g s t e e l and ferrochrome exports; i f
ferrochrome exports are excluded the proportionb r i s e s to 40%.
For the 1980 data see R i d d e l l (1981a).
48. The apparent dichotomy shown i n the DRC i n d i c a t o r s of a
r e l a t i v e l y high l e v e l i n t e r n a t i o n a l competitiveness and the lower
l e v e l of competitiveness i n d i c a t e d by these plant adequacy
f i g u r e s can, i n part, be explained by the bias of DRC data. As
DRC data i s an i n d i c a t o r of i n t e r n a t i o n a l competitiveness
comparing domestic with border p r i c e s and because Zimbabwe's
borders are located f a r from the coast, the r e s p e c t i v e DRC
f i g u r e s do not r e v e a l i n d u s t r i a l / s u b - s e c t o r a l competitiveness i n
overseas markets which would have to take i n t o account the double
disadvantages of Zimbabwe's land-locked geographical l o c a t i o n .
49. This means that the i n f l u e n c e of these r a t i o s o r i g i n a t i n g i n
changes i n technology w i l l have been smaller. For an a n a l y s i s of
c a p i t a l shortage see UNIDO (1986b:322 to 354).
50. The data i n these graphs provides two i n d i c a t o r s of r e a l MVA,
one using the Central S t a t i s t i c a l O f f i c e ' s Volume Index, the
other using Census of Production f i g u r e s to derive MVA, d e f l a t i n g
these with the Gross National Income d e f l a t o r found i n National
Accounts s t a t i s t i c s . While the pattern of change i s s i m i l a r over
time, d i v e r g i n g most markedly f o r the 1983 data which i s l i k e l y
to be a l t e r e d f o l l o w i n g r e v i s i o n of most recent d e f l a t o r s , the
sub-sectoral data reveals a volume i n d i c a t o r some 6 to 12 points
above the other index except f o r sub-sectors (2) and (6) where
the p a t t e r n i s i n general reversed and sub-sector (10) when no
systematic r e l a t i o n s h i p i s apparent. These two estimates are
provided to i n d i c a t e both the d i f f e r e n c e s between them and hence
the danger of r e l y i n g e x c l u s i v e l y on one i n d i c a t o r as a basis f o r
a n a l y s i s of r e a l changes i n MVA. For a d i s c u s s i o n of some of the
issues r a i s e d see Ramsay (1974b).
51. Averaging the 1982 and 1983 f i g u r e s gives the MVA/GDP r a t i o
as 34.95 compared with 34.55 i n 1960.

52. I am g r a t e f u l to Ian Phimister f o r these l a t t e r poir.-s vhxr.-.
are covered f a r more f u l l y i n h i s An Economic and S o c i a l H i s t c r y
of Zimbabwe (forthcoming).
53. The u n i t value of imports rose by 10% and of exports f e l l by
10% between 1965 and 1966.
54. French, Japanese and German c a p i t a l goods and intermediate
inputs l a r g e l y replaced those p r e v i o u s l y obtained from B r i t a i n
which could not be sourced from South A f r i c a .
55. By 1970, manufacturing investment had doubled from 1965
l e v e l s and by 1972 manufactured exports had exceeded t h e i r 1965
values. Between 1965 and 1973, t o t a l exports to South A f r i c a
quadrupled from $26 mn to S102 mn while the extent of increased
i l l e g a l t r a d i n g i s evident from o f f i c i a l data r e v e a l i n g reexports
from South A f r i c a to Europe and North America r i s i n g from
$9 mn i n 1965 to $65 mn by 1974.
Between 1963 and 1970 the number of separately i d e n t i f i a b l e
products manufactured i n the country had r i s e n from 602 to 3,837
and to 6,200 by 1980 (See R i d d e l l 1981b:196).
56. In the period 1966 to the l a t e 1970s, the r u l i n g Rhodesian
Front party never l o s t a s i n g l e seat i n the s e r i e s of e l e c t i o n s
and bye-elections that tooJt place among the white e l e c t o r a t e .
57. Defense and p o l i c e expenditure rose from $65 ran i n 1974 to
$205 mn, three years l a t e r ; net white immigration of 8,000 a year
i n the e a r l y 1970s turned to net emigration l e v e l s of 11,000 a
year by the end of that decade.
58. The war d i d lead to an increase i n demand f o r war-related
manufactures. In p a r t i c u l a r demand f o r mine-proof v e h i c l e s was
created while demand for uniforms and food f o r the expanded
services expanded r a p i d l y .
59. During the whole of the UDI period. Reserve hank p o l i c y was
to maintain the current account i n balance almost on an annual
b a s i s . The r e s u l t was that l i t t l e scope or f l e x i b i l i t y was
provided to adjust to balance of payments c o n s t r a i n t s , f o r
example through f o r e i g n borrowing. As a r e s u l t , f o r e i g n exchange
c o n s t r a i n t s quic)ily worlted t h e i r way through the economy.
60. The o v e r a l l import volume index rose by 38% from 1979 to 1980
and by a f u r t h e r 23% i n the f o l l o w i n g year.
61. See pages 13-16, above.
62. Figures are from the Confederation of Zimbabwe I n d u s t r i e s
Economics Research department.
63. I t should be noted, however, that i n the post-Independence
period, p r i c e c o n t r o l s have become more all-embracing and many
a p p l i c a t i o n s f o r p r i c e r i s e s have been subject to long delays.
In some instances t h i s has l e d to such an erosion i n p r o f i t

l e v e l s that both replacement investment and much-needed expansion
has not occurred, as, f o r instance, has occurred i n the sugar
industry.
64. Most of the d e t a i l e d f i r m - l e v e l evidence i s drawn from f i e l d
work c a r r i e d out i n Zimbabwe during June 1987.
65. The d i s c u s s i o n here i s not based on the evidence of a
r i g o r o u s l y analysed sample survey, rather on the basis of
d e t a i l e d d i s c u s s i o n at the f i r m l e v e l , complimented by more
macro-based survey m a t e r i a l (for example from the CZI, the CSO
and the U n i v e r s i t y of Zimbabwe surveys) already i n existence. The
choice of "successful and unsuccessful" i s r e l a t e d to the o v e r a l l
framework f o r the wider ODI p r o j e c t , of which t h i s Zimbabwe casestudy
forms a c o n s t i t u e n t part.
66. For recent sector-wide surveys of a g r i c u l t u r a l implement
manufactures see CZI (1986) and Mazhar and Ndlela (1987) .
67. Zimplow's Annual Reports (various), Tinto I n d u s t r i e s ' s Annual
Report 1983 and The F i n a n c i a l Gazette (supplement), 31 October
1986. Bulawayo S t e e l Products does not p u b l i s h separate r e s u l t s
i n Zimbabwe; i t i s owned by the B r i t i s h f i r m Amalgamated Metal.
68. At l e a s t i n i t i a l l y , the severe drought and r e l a t e d drop i n
domestic demand for products would, of course, have been an
i n f l u e n c e i n short-term s a l e s .
69. Bulawayo S t e e l Products as long ago as 1952.
70. The main imported input i s sheet s t e e l ; however Tube and
Pipe I n d u s t r i e s w i l l soon be r o l l i n g t h i s product which w i l l
reduce even f u r t h e r the import dependence of manufacturing - yet
another example of contemporary import s u b s t i t u t i o n i n Zimbabwe
(see Note 18).
71. Some forges and presses are made i n Zimbabwe, for example by
A l l Metal Founders , Hytech and D. H a d f i e l d . I am g r a t e f u l to
C o l i n Stoneman f o r t h i s p o i n t .
72. The term "adequate" w i l l be expanded upon, below. To have a
high degree of competitiveness among j u s t two firms i s , of
course, not always the case. For instance there are also j u s t two
firms that manufacture cement i n Zimbabwe. Not only i s the p r i c e
of cement government-controlled but there i s agreement among the
two firms that no p r i c e c u t t i n g should take place and, i n
a d d i t i o n , there i s an agreed market-sharing arrangement whereby
each f i r m supplies cement to only s p e c i f i e d parts of the country
- f a r indeed from the world of perfect competition.
73. Indeed i n the recent Annual Reports of Zimplow the comment i s
made that the domestic market should finance exports!
74. The Standard Chartered Bank's corporate p r o f i t a b i l i t y index
jumped from a value of 50 i n 1978 to almost 200 i n 1981, the year
when the p r i c e c o n t r o l l e g i s l a t i o n was tightened.

75. For instance, m 1982, a 39% p r i c e increase was requested
f o l l o w i n g a 25% r i s e i n domestic s t e e l p r i c e s (accounting for 80%
of d i r e c t input costs) and an 18% increase was given a f t e r over
s i x months delay. S i m i l a r l y i n 1985, a 20% p r i c e increase was
granted f o l l o w i n g a 46% p r i c e r i s e a p p l i c a t i o n and t h i s r i s e was
only given at the end of the p l a n t i n g season when the annual
purchase of a g r i c u l t u r a l implements had taken place.
76. Although p a r t l y r e l a t e d to the drought years, Zimplow
suffered an a f t e r tax l o s s of $22,000 i n 1983, no p r o f i t s
recorded i n 1984 and f o r 1985 and 1986 an average a f t e r tax
p r o f i t rate 40% lower than that achieved i n the three year period
1980 to 1983 (and at current p r i c e s ) .
77. Zimplow reported a post-tax p r o f i t of $124,000 (2% of
turnover), while Bulawayo S t e e l Products's p r o f i t l e v e l was about
h a l f that amount.
78. One needs to be e s p e c i a l l y wary of extending too f a r the
argument e i t h e r that because f o r e i g n exchange f o r c a p i t a l
investment has been at a low l e v e l for a decade or more or
because machinery and equipment i s sold i t therefore needs
r e p l a c i n g and r e p l a c i n g with new equipment. For instance,
Bulawayo S t e e l Products maintains that even though most of t h e i r
c a p i t a l equipment i s o l d i t remains adequate to requirements for
both domestic and export production; and of that which needs to
be replaced there e x i s t s q u i t e adequate second-hand equipment on
the market. As for the argument from age, Bulawayo S t e e l
Products are s t i l l using an 1897 press which i s w e l l maintained,
quite adequate and c e r t a i n l y does not need r e p l a c i n g . S i m i l a r l y ,
both Lemco and the country's l a r g e s t tannery i n Bulawayo have
machines that are pre-World War I and n e i t h e r company would wish
to see them replaced.
The experience of Metal Box Central A f r i c a provides yet
another i l l u s t r a t i o n of the complexities of t h i s issue. Although
the plant operated by Metal Box i s over 20 years o l d and f a r
removed from the "state of the a r t " technology, senior personnel
at the f i r m b e l i e v e that i t i s s t i l l quite adequate. The main
reason i s that both the domestic and r e g i o n a l market i s small by
i n t e r n a t i o n a l standards and as the company produces a wide range
of products the key f a c t o r i s the a b i l i t y to adapt the machinery
q u i c k l y to the d i f f e r e n t shapes and s i z e required. Not i n f r e ­
quently only an eight hour machine "run" i s needed to s a t i s f y
demand for a month or two whereas the new high-speed machinery
can take up to four days to adjust and adapt ready to produce
runs f a r i n excess of demand i n Zimbabwe and the region. ,
79. The d i f f e r e n t i a l between the landed p r i c e of Zimbabwean
products and a l t e r n a t i v e s has thus probably been widening.
80. I t should be added, however, that at l e a s t three firms have
s t a t e d that they have been prevented from doing business with at
l e a s t one SADCC neighbour because t h e i r firms have not allowed
t h e i r s t a f f to provide back-handers and other i n c e n t i v e s as part
of the export deal; as other i n t e r n a t i o n a l competitors do engage

i n such a c t i v i t i e s , Zimbabwean trade has thereby been c u r t a i l e d
and orders worth many hundreds of thousands of d o l l a r s have not
m a t e r i a l i s e d i n s p i t e of Zimbabwean products being p r i c e
competitive.
81. A j o i n t venture of C h i l l i n g t o n s of the United Kingdom and the
Government of Malawi.
82. Another Bulawayo f i r m reports a s i m i l a r problem with
Zimbabwean t i n purchases. In mid-1987, the London p r i c e of t i n
was £4,100 ($11,070) a tonne, but Zimbabwean purchasers had to
pay the l o c a l Kamativi mine the d o m e s t i c a l l y - s e t p r i c e of $18,250
a tonne. However i n t h i s case, "some" discount would be provided
i f the t i n was used i n manufacturing f o r export.
This phenomenon does not always wort: against Zimbabwe's
i n t e r e s t s though. For instance. Metal Box C e n t r a l A f r i c a (the
Zimbabwe firm) i s able (at 1987 prices) to produce t i n - p l a t e at
about 30% lower u n i t cost than i t s South A f r i c a n competitors even
though the raw m a t e r i a l used by both Zimbabwean and South A f r i c a n
t i n - p l a t e maimers comes from South A f r i c a ' s s t e e l plant ISCOR.
The reason i s that ISCOR wants to maintain the Zimbabwe market
(Zimbabwe exports upwards of 15% of i t s output) while Metal Box
South A f r i c a does not b e n e f i t from export discounts for t h e i r
exports.
83. When i t was not p o s s i b l e to export by road to Malawi, Tinto
I n d u s t r i e s r a i l e d t h e i r Malawian exports down to Johannesburg and
a i r - f r e i g h t e d them up to Malawi at an increased landed cost of
40%. In s p i t e of t h i s p r i c e hike, the Malawian market s t i l l
purchased the Zimbabwean product rather than European and f a r
cheaper " a l t e r n a t i v e s " .
84. In the year ended September 1986 t o t a l turnover of Hunyani
was $68.8 mn, up from $39.8 mn i n 1982, with a f t e r tax p r o f i t s
recorded of $$6.9 mn i n 1986 and $2.3 mn i n 1982.
85. Much i s made by Hunyani's management of the rate of i n v e s t ­
ment (ROD as a measure of success i n business. This i s defined
as the p r o f i t a f t e r tax but before extraordinary items expressed
as a percentage of the share of shareholders' eguity. Hunyani's
ROI f o r the year ended September 1986 was 12.42% and over the
whole post-Independence period has f l u c t u a t e d from a low of 4.4%
to a high of 15.8%. The management of the company maintains that
the r a t i o needs to achieve a l e v e l of 25% as a minimum target.
86. Some years a f t e r UDI, the then Rhodesian Government i n t r o ­
duced a u s t e r i t y c i g a r e t t e s onto the l o c a l market and since then
(for over 10 years) no i n t e r n a t i o n a l c i g a r e t t e brands have been
g e n e r a l l y a v a i l a b l e i n Zimbabwe. Nonetheless on a regular basis
advertisements•for these i n t e r n a t i o n a l brands (such as Benson and
Hedges) appeared i n the Zimbabwean press and provided the basis
f o r other a d v e r t i s i n g such as at the race course where the
"Benson and Hedges" race remains one of the most p r e s t i g i o u s
events i n the Borrowdale annual r a c i n g
calender.

87. Sadly, no measures of comparative i n t e r n a t i o n a l p r i c e s f o r
the pre-UDI period are a v a i l a b l e to compare trends over time.
88. The a b i l i t y of firms to u t i l i s e t h e i r monopoly power i n t h i s
way was, of course, r e l a t e d to the r e l a t i v e e l a s t i c i t i e s of
demand for t h e i r products. Sub-sectors (4),(5),(6),(8) and (9)
s u f f e r e d from the severest drops i n production over t h i s period,
for sub-sectors (1),(2),(3) and (7) l e v e l s of production e i t h e r
rose or remained
s t a t i c .
89. The numbers are 4,331 firms i n the 1981-85 period compared
with 4,002 i n the period 1975-79. (Quarterly Digest of S t a t i s ­
t i c s , December 1986, Table 26.1,p.85.)
90. In t h i s s e c t i o n d i s c u s s i o n i s e x c l u s i v e l y of the f o o d s t u f f s
sector; t h i s does not include beverages and tobacco.
91. The 1986 UNIDO report estimates that f o r Foodstuffs, d i r e c t l y
imported inputs c o n s t i t u t e d 2.4% of the t o t a l , compared to a
sector-wide average of 25.3%. The next least-dependent sector
was Wood and F u r n i t u r e (sub-sector 5), f o r whom imported inputs
c o n s t i t u t e d some 14% of t o t a l inputs. (UNIDO, 1986b:70.) To
point out the low l e v e l of import dependence f o r raw m a t e r i a l
inputs i s not, of course, to argue that there i s no f o r e i g n
exchange problem for food manufacturers; indeed as a l l f o r e i g n
exchange purchase of raw m a t e r i a l inputs are v i t a l to production,
i t could be argued that output of the f o o d s t u f f s sub-sector i s
even more s u s c e p t i b l e to cuts i n f o r e i g n exchange than other subsectors
because the r i p p l e e f f e c t s are f a r greater. In 1987, the
stockfeeds industry was p a r t i c u l a r l y hard-hit by f o r e i g n exchange
shortages, covering a wide range of imports such as vitamins,methionine
and amino-acids (see The F i n a n c i a l Gazette, 21 August
1987).
92. As already discussed, there are those who would argue that
such exports should be omitted because they are s c a r c e l y
processed or manufactured products and because they arose almost
e x c l u s i v e l y from an expansion of the stock of exportable c a t t l e .
Nonetheless, the expanded throughput does/did e n t a i l c a p i t a l
expansion, mostly of the f a c i l i t i e s of the p a r a s t a t a l Cold
Storage Commission, defined as a manufacturing u n i t .
93. These d i d begin to r i s e again with the o b t a i n i n g of the
guarantee of 8,100 tonnes of beef a year to the l u c r a t i v e EEC
market under the t h i r d Lome Convention, i n c r e a s i n g , f o r instance,
from $10.9 mn i n 1983 to $31.3 mn i n 1985. However i n 1986 the
domestic beef shortage meant that only 4,500 tonnes were exported
to the EEC, even though t o t a l sales amounted to over $30 mn.
Mid-year estimates by the Cold Storage Commission suggested that
a f i g u r e of 7,000 tonnes would be reached f o r 1987, g i v i n g t o t a l
f o r e i g n exchange earnings of some $70 mn (The F i n a n c i a l Gazette,
31 J u l y , 1987) .

94. In 1938/39, t o t a l food exports may have accounted for over
40% of t o t a l gross output but they only amounted to less than
$500,000 mn (at current p r i c e s ) , with gross output valued at l e s s
than $1 mn.
95. For an i n c r e a s i n g l y large number of products domestic demand
f a r outweighs the current a b i l i t y of the food industry to supply
the l o c a l market. For instance, i n a "good" year, the major f i s h
manufacturer (I & J) estimates that i t meets about 10% of l o c a l
demand while estimates from the A g r i c u l t u r a l Marketing A u t h o r i t y
reveal that the "apparent consumption" of a l l meats and meat
products i n Zimbabwe was no higher (109,000 tonnes) i n 1986 than
i t was i n 1972, during which the n a t i o n a l population has
increased by 60% (AMA, 1987).
96. And on t h i s basis the f o o d s t u f f s sub-sector on balance d i d
very w e l l f o r i n 1982 i t i s estimated that the t o t a l c a p i t a l
stock of the sector was worth $573 mn, 15% of the t o t a l f o r a l l
manufacturing and with f o o d s t u f f s being the second l a r g e s t user
of c a p i t a l to sub-sector 9, Metals and Metal Products.
97. There are, f o r instance, only l i m i t e d markets for bread and
bakery products, responsible i n 1983 f o r some 10% of the output
of the sector and valued at nearly $100 mn.
98- R i d d e l l (1987), "Zimbabwe's Experience of Foreign Investment
P o l i c y " , prepared f o r the Commonwealth S e c r e t a r i a t , London,
produced, i n abridged form i n Cable and Persaud (1987).
99. Hunvani's cooperative arrangement with TetraPak of Switzerland
can also be seen as an attempt to remain competitive i n the
i n t e r n a t i o n a l market through means of a t e c h n o l o g i c a l agreement.
The example of Lever Brothers also confirms t h i s general
perspective. Expected exports of some $5.5 mn i n 1987/88 have
been achieved through s u b s t a n t i a l investments amounting i n 1987
to $5. In the l a s t f i v e years, the company has spent over $4 mn
on purchasing new technology from abroad to help promote exports
i n both r e g i o n a l and overseas markets (The F i n a n c i a l Gazette, 20
November 1987) .
100. The cost element of a can of corned beef c o n s t i t u t e s only
about 5% of the f i n a l s e l l i n g p r i c e .
101. Major competitors i n Europe are B r a z i l , Argentina, Kenya,
Uruguay and Botswana.
102. Management of s u c c e s s f u l companies are not u n l i k e l y to laud
t h e i r own merits and a t t r i b u t e s but i n t h i s instance confirmation
was obtained by other firms i n the meat canning industry.
103. The a c t i o n taken by South A f r i c a was p a r t l y i n response to
lobbying by South A f r i c a n companies and p a r t l y because the
Namibian f a c t o r i e s were only working at 50% capacity. I t was far
e a s i e r , p o l i t i c a l l y , for the South A f r i c a n a u t h o r i t i e s to

concede to these pressures a f t e r rather than before Zimbabwe
became independent.
104. In the years 1980 to 1986, the world p r i c e of beef (fob US
ports) has been 80% higher than the domestic p r i c e of Zimbabwean
beef, i n d i c a t i n g a f a r wider d i f f e r e n t i a l i n comparative border
p r i c e s (average world p r i c e US227c/ltg, average Zimbabwe p r i c e
USl27c/kg). Nonetheless with i t s 8,100 tonne quota under the
Lome Convention Zimbabwe i s able to export t h i s quantity of beef
at premium p r i c e s : i n 1987/88, the domestic s e l l i n g p r i c e of beef
was $2,563 a tonne, f o r the export market i t was $4,346 a tonne.
105. As of June 1986 the accumulated unpaid d e f i c i t of NRZ
amounted to $123 mn while i n e f f i c i e n c i e s i n the o r g a n i s a t i o n
were pinpointed i n the Committee of Inquiry Report on the
N a t i o n a l Railways of Zimbabwe, tabled i n parliament i n Harare i n
August 1987.
106. Lemco changed i t s name from L e i b i g s s h o r t l y a f t e r Independence.
Even more r e c e n t l y , f o l l o w i n g a takeover outside
Zimbabwe, i t has been taken over by U n i l e v e r .
107. I t has, however, r e c e n t l y sent a consignment of canned meat
to Europe and a f t e r the Chernobyl d i s a s t e r received a number of
export enquiries from p o t e n t i a l buyers i n Europe looking for
nuclear-free beef.
108. A new managing d i r e c t o r has r e c e n t l y taken over at Lemco and
the points r a i s e d here i n no way r e f l e c t on h i s perspectives on
the company; indeed he appears to be f u l l y aware of the company's
export p o t e n t i a l and i s d i r e c t l y involved i n pursuing these.
109. There are no other large domestic manufacturers of canned
beef; smaller q u a n t i t i e s are supplied by General Meat Products
and D e l i c a t e s s Meat Products. However there i s some competition
with Colcom the large and sole manufacturer of canned pork
products.
110. Not that Super Canners are free from water problems for
there has been severe water r a t i o n i n g i n the C i t y of Bulawayo
throughout 1987 and f u r t h e r cuts are being a n t i c i p a t e d .
111. I t was not p o s s i b l e i n t h i s present research to f i n d out
whether i n t e r n a t i o n a l l y L i e b i q s has been operating a market
d i v i s i o n p o l i c y which might have had the e f f e c t of r e s t r i c t i n g
the Zimbabwe s u b s i d i a r y from seeking access to c e r t a i n p o t e n t i a l
export markets.
112. There i s also considerable p o t e n t i a l f o r expanding the
exports of other resource-based products. Besides Super Canners,
the p a r q u e t - f l o o r i n g manufacturer. Art F l o o r i n g , i s another
Zimbabwean manufacturing company which exports the bulk (over
75%) of i t s product, and has done so f o r a decade or more. (One
of i t s more recent export orders was f o r the new H e l s i n k i Opera
House.) In mid-1987 i t s order book was f i l l e d for two years
ahead. The product i t manufacturers and exports holds i t s own on

the l u c r a t i v e European (mostly West German) marl^et l a r g e l y
because of the unique q u a l i t y of the hardwood raw m a t e r i a l
obtained from both w i t h i n Zimbabwe and from across the border i n
neighbouring Mozambique. With modern machinery and an engineer-
/ t e c h n i c i a n running the Mutare f a c t o r y who, according to the
general manager i n Harare, i s the "key" to the success of the
operation, export markets are a l l but guaranteed. The reason why
export expansion i s not o c c u r r i n g s i g n i f i c a n t l y at present (1987
exports are estimated to be $650,000 compared with $222,000 i n
1986) i s not because of p r i c e , plant and machinery inadequacy,
s k i l l shortages, higher transport costs or a lack of export
demand. I t i s simply that unrest i n Matabeleland, i n southern
Zimbabwe, and across the border i n Mozambique has meant that the
hardwood logs cannot be cut down i n the q u a n t i t i e s required.
113. Located i n the southern hemisphere, i t s season i s both
longer than South A f r i c a ' s and s t a r t s some two months before hand.
114. This has been h i g h l i g h t e d r e c e n t l y i n a report on Zimbabwe's
h o r t i c u l t u r a l sector prepared f o r the Government by the Netherlands-based
B.V. P r o j e c t Development (Prode).
115. While Zimbabwe would stand to gain from any i n t e r n a t i o n a l
sanctions imposed on South A f r i c a r e s t r i c t i n g i t s imports i n t o
the major markets. South American s u p p l i e r s have been quick to
step m here already. For instance w i t h i n a few days of the
Swedish ban on South A f r i c a n a g r i c u l t u r a l produce a plane load of
Chileans was i n Sweden attempting - with great success - to f i l l
the vacuum, even to the extent of taking order f o r f r e s h
h o r t i c u l t u r a l produce three and four years hence.
116. Border Streams began exporting marmalades to B r i t a i n i n
1984, p r i o r to i t s purchase by the Cairns group, but i n minute
q u a n t i t i e s and at the cost of c r e a t i n g shortages i n the domestic
market.
117. One brand of them, strangely, appearing under the "Sharewood"
brand name, associated with curry products, complete with
"By Appointment To Her Majesty The Queen"!
118. The most u s e f u l type of information to analyse linkages are
contained i n d e t a i l e d input/output analyses. For Zimbabwe a
comprehensive input/output matrix was constructed for 1964 and
1965 data by the C e n t r a l S t a t i s t i c a l O f f i c e (CSO) i n Harare.
This was extrapolated forward to 1975 by Zimbabweans working at
UNCTAD p r i o r to Independence to provide a crude 10 year comparison.
C u r r e n t l y the CSO are processing input/output data f o r
the year 1981 but to date no large matrix has been published.
Some of t h i s data, r e f e r r i n g most p a r t i c u l a r l y to transactions
w i t h i n the manufacturing sector was used i n the UNIDO (1986b)
study. In t h i s s e c t i o n , use i s made of a l l three sources i n the
attempt to h i g h l i g h t , even i f crudely, the changes i n linkages
over time.

119. Caused l a r g e l y by r a i n f a l l d i f f e r e n c e s - s a i d to be
responsible for at l e a s t a 20% p o t e n t i a l v a r i a t i o n i n production
l e v e l s - and, e s p e c i a l l y i n the 1974-79 period by the war.
120. For some reason, the a v a i l a b l e 1981/82 input/output data
does not show the value of tobacco products u t i l i s e d i n the
manufacture of tobacco see UNIDO (1986b:136). This f i g u r e of $21
mn therefore underestimates the a g r o - i n d u s t r i a l linkage for t h i s
sub-sector. Data provided by the tobacco i n d u s t r y suggests that
t h i s was valued at about $2.5 mn i n 1981/82.
121. Information supplied by the meat canning industry.
122. These proportions are derived from the averages of the 1965
and 1975 input/output data - no r e l i a b l e data i s a v a i l a b l e for
the post-1975 period.
123. In 1986, the communal lands held 80% more c a t t l e than the
commercial farming areas - 3.45 mn to 1.91 mn - twice as many
sheep and 24 times the number of goats. S i m i l a r l y i n 1983/4,
the large commercial farms planted 223,000 hectares to maize, the
small-scale, communal and resettlement areas j u s t over one
m i l l i o n hectares to maize. See Quarterly Digest of S t a t i s t i c s ,
March 1987, Tables 11.2 and 11.3 and AMA data (1987) for maize
p l a n t i n g s .
124. P r i o r to Independence, the s m a l l - s c a l e and communal areas
were responsible for l e s s than 10% of marketed maize sales but by
1986 they accounted f o r over 40%, i n c r e a s i n g t o t a l tonnage from
less than 40,000 to w e l l over 700,000 i n the s i x year period
(averaged out to allow f o r drought years). See AMA (1987) gram
data.
As w e l l as co-ordinating the food s e c u r i t y plans f o r the Southern
A f r i c a n Development Coordination Conference (SADCC) region,
Zimbabwe i s also planning i t s e l f to have a v a i l a b l e a surplus of
maize f o r export for the foreseeable future.
125. These f i g u r e s come from Chavunduka (1981:140-148).
126. In i t s recent I n d u s t r i a l Sector Study, the World Bank
i n c o r r e c t l y maintains that "Zimbabwe's f e r t i l i z e r firms can meet
most of the country's present f e r t i l i z e r needs..." (World Bank
(1987:101).
127. Some i n d u s t r i a l i s t s have a l s o remarked that a number of key
government m i n i s t e r s and party members whose i n f l u e n c e was
important i n pushing f o r t h i s t e c h n i c a l option and having the
d e c i s i o n to go ahead taken were open to p a r t i c u l a r persuasion,
128. Some of the c r i t i c i s m , however, does seem to be rather
c i r c u l a r . For instance i t was the World Bank which i n s i s t e d on
massive hikes i n e l e c t r i c i t y charges i n the e a r l y 1980s to help
repay q u i c k l y the loans provided for the development of the
Hwange Power S t a t i o n but i t i s the high cost of t h i s input (Sable
absorbs some 20% of n a t i o n a l e l e c t r i c i t y consumption) which

h i g h l i g h t e d the divergence between the ex-factory cost of
production and the border p r i c e of competitive imports.
129. Some of these f i g u r e s do appear to be on the low side or
else somewhat out of date. For instance the Commercial Farmers'
Union argued i n l a t e 1986 that "urea i s p r i c e d i n Zimbabwe at
about 2.2 times the cost at which i t could be imported and s o l d
to our farmers" CFU, (1986:7).
130. See f o r instance Chavunduka (1982), UNIDO (1986b) and
Cochrane and Donoso (1987).
131. CFU estimate.
132. Imports of i n s e c t i c i d e s and d i s i n f e c t a n t s i n 1984 and 1985
averaged $25 mn.
133. There are, of course, exceptions. For instance i n November
1987, a $4mn s o p h i s t i c a t e d chemical plant, s i m i l a r to those
erected by the company i n 35 other countries was o f f i c i a l l y
opened f o r Hoechst (Zimbabwe) to manufacture a range of chemical
products both to replace imports and to tap at l e a s t the r e g i o n a l
export market. I n i t i a l l y the f i r m i s to produce t e x t i l e
chemicals, immediately saving the country about $1.5 mn a year i n
f o r e i g n exchange (The F i n a n c i a l Gazette, 19 June, 1987 and 20
November 1987) .
134. The commercial farming sector has about 17,000 t r a c t o r s of
which some 40% are over 11 years o l d , the maximum recommended
l i f e of a machine p r i o r to the cost of spares becoming excessivel
y high. See, for instance, Zimbabwe, Report on the Tractor and
Tractor Implement Operating Cost Survey f o r Large Scale Commerc
i a l Farming Units, Harare, The Farm Management Research Section,
Economics and Markets Branch, M i n i s t r y of A g r i c u l t u r e , October
1984.
135. Recent M i n i s t r y of A g r i c u l t u r e surveys show that the average
horse-power on these farms ranges from 60 to 70 per t r a c t o r .
136. The growth and e v o l u t i o n of Zimbabwe's c a p i t a l goods sector
has been researched and developed by Dr. Dan Ndlela of the
U n i v e r s i t y of Zimbabwe. See f o r example Ndlela (1985).

REFERENCES
A g r i c u l t u r a l Marketing A u t h o r i t y (AMA), (1986) Economic Review of
the A g r i c u l t u r a l Industry of Zimbabwe 1985, Harare, AMA.
A r r i g h i , G. (1967), The P o l i t i c a l Economy of Rhodesia, The Hague,
Mouton.
Barber, W.J. (1961) The Economy of B r i t i s h Central Africa,London,
Oxford U n i v e r s i t y Press.
Cable, V. and Persaud, B. (Eds) (1987) Developing With Foreign
Investment,London, Croom Helm and the Commonwealth S e c r e t a r i a t .
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