Zimbabwe factory output doubles in 1st-half '09-industry

By Nelson Banya

HARARE (Reuters) - Zimbabwe's factory output doubled in the first six months of 2009, partly due to policy changes by the country's unity government, including the use of multiple foreign currencies, an industry group said on Wednesday.

President Robert Mugabe and Prime Minister Morgan Tsvangirai agreed to share power in February, following last year's disputed elections and have tried to fix an economy ravaged by years of hyperinflation and political uncertainty.

A survey carried out by the Confederation of Zimbabwe Industries (CZI) showed that factory capacity utilisation had risen from below 10 percent before the unity government was formed, to about 32.3 percent now.

"Consequently, signifying this improvement ... overall output grew by 110 percent in the first six months of the year. At the beginning of the year there was a positive policy change that saw the government introduce the use of multiple currencies," CZI chief economist Lorraine Chikanya said at the launch of the report in Harare.

"This policy framework ushered in a breath of life into what was becoming a dying sector."

The CZI said the unity government had restored confidence, with $1.5 billion being invested in the manufacturing sector, mainly for plant rehabilitation and expansion.

BACK TO WORK

Zimbabwe's average working week, which had come down to two days as firms laid off staff amid hyperinflation, raw material shortages and price controls, is now at five days.