‘Offer tax concessions to stimulate investment’

Business Reporter
THERE is a need for the government to consider offering tax concessions and credits for innovation as part of measures to stimulate investment and economic growth, former Industry and Commerce Minister Professor Welshman Ncube has said.

Developing a vibrant economy, he said, should be hinged on robust development of the manufacturing sector as opposed to relying on raw commodity exports such as minerals and tobacco.

Prof Ncube said Zimbabwe stands a better chance to regain its lost regional industrial status through adoption of modern production techniques in the manufacturing sector, in particular.

He sees increased investment in innovation and supporting infrastructure covering critical areas such as water, energy, roads and railway networks.

“Sometimes it’s good for the government even to exempt large-scale machinery and raw materials from duty in order to kick start industrialisation. Policy ‘exemptions’ can also be extended to labour and institutions of higher learning, because human capital must be allowed to develop and move freely,” said Prof Ncube.

The ex-minister’s views dovetail with the ideals of the government’s five-year-economic blue-print, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset 2013-18).

Through this policy the government seeks to achieve an average seven percent economic growth and create up to two million jobs by 2018.

“I know that President Mugabe’s government has been talking a lot about export processing zones. Nevertheless, these are not enough if, as CZI observes, ‘access to trade finance, access to imported inputs at competitive prices, identifying potential markets and buyers, procedures at foreign borders and technical requirements and standards abroad’ are not attended to. In simple terms, merely posturing around the EPZ gospel is insufficient without support mechanisms,” Prof Ncube added.

“Let’s remember that modern civilization was driven by the industrial revolution, which is nothing more than intensive and sustained manufacturing. A nation cannot be modern without manufacturing.”

He warned that while industrialisation comes with a cost to both the climatic and social environment, the country needs to tread carefully with free market approaches.

“Free markets have to be approached carefully because the gap between the rich and the poor widens if a sustainable social safety system is not in place,” he said.