Zimbabwe’s mining industry is poised for growth and prospects for 2021 are looking positive compared to this year, with the increase in the Mining Business Index (MBCI) from 2,2 to 3,1 showing confidence among mining executives.
The confidence among mining executives is spelt out in the latest State of the Zimbabwe Mining Industry Report Prospects for 2021, which was unveiled by the Chamber of Mines of Zimbabwe (CoMZ) yesterday.
The MBCI measures mining business sentiments on prospects for the next 12 months.
The increase in the index comes at a time when President Mnangagwa has indicated that mining and agriculture are the cornerstones on which Zimbabwe will build its economic revival and the Government has been continuously engaging the private sector in the quest to ramp up production.
Presenting the research findings in Harare yesterday, University of Zimbabwe economics lecturer Professor Albert Makochekanwa said it was encouraging to note the executives’ optimism for growth despite the drawbacks caused by Covid-19.
Variables that informed the executives’ positivity include prospects for growth, part of which supports the sector’s 2023 milestone which seeks to grow annual export earnings from US$2,7 billion in 2017 to US$12 billion by 2023.
Commodity outlook characterised by rising prices on the international market has also added to the positivity.
“For the next 12 months prospects are positive at 3,1 which is higher compared to the prospect which we got last year when we were projecting for 2020 where it stood at 2,2,” said Professor Makochekanwa the lead researcher.
“What it simply means in summary is that overall, the mining executives are slightly confident about the prospects for businesses in 2021 when compared to 2020. In summary we are saying, despite Covid-19 and other issues the future is brighter than where we are.
“Variables that contributed to the positive are mining sector growth prospects, profitability prospects as well as commodity outlook in terms of the market outlook,” he said.
The findings also show that most respondents are planning to increase capacity utilisation in the next 12 months which could see the sector’s average capacity utilisation attaining a five year high of 80 percent up from the current 61 percent.
It must also be noted that capacity utilisation has been fluctuating in the last five years as it stood at 71 percent in 2017, 75 percent in 2018, and 70 percent in 2019 and now a plunge to 61 percent which has largely been attributed to the effects of Covid-19.
Despite the positivity, respondents also expressed reservations on challenges bedevilling the sector and among them is the investment environment which still remains uncompetitive.
The Government and market watchers have over the years noted that Zimbabwe’s lure as an investment environment has been negatively affected by illegal economic sanctions.
Speaking at the same event, Mines and Mining Development Minister Winston Chitando expressed his delight at the sector’s positivity and also highlighted that the Government is committed to address challenges affecting the sector.
“I give you my commitment, I give you the Government’s commitment that we will have to sit with the chamber and address this issue head-on . . .” said Minister Chitando.