The country’s industrial capacity utilisation rose to 47% in 2020 from 36.4% in 2019, according to the Confederation of Zimbabwe Industries (CZI)’s latest manufacturing report.
Launching the 2020 Manufacturing Sector Report this morning, CZI says it further sees capacity utilisation rising further to 61% this year, provided exchange rate stability is maintained and inflation tamed.
Capacity utilisation is the extent to which industrial infrastructure is being used versus its maximum installed capacity.
According to ZimPriceChecks, capacity utilisation of less than 100% usually means something is wrong and preventing the business/ country from achieving its best. A fall in capacity typically means a fall in GDP (wealth) of the given country.
There is a clear direct relationship between a fall in capacity utilisation and economic misery.
Fall in capacity utilisation may come from runaway inflation, complex and burdensome tax regimes, acute foreign currency shortages, power shortages and crippling power cuts, fuel shortages, shortages of essential raw material etc.
-Zwnews
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