Nestle Zimbabwe and the minister of education. Image credit nestle-ea.com

ZIMSEC O Level Geography Notes: The Effects of TNC in Zimbabwe

  • TNC activities have both positive and negative effects to the economies and people of the host countries in which they operate.
Positive effectsNegative effects
Employment creationDestruction of local infant firms
Provision of revenue to the country through taxes, commissions and royaltiesRepatriation of large profits to mother country
Government earning foreign currencyLittle reinvestment in host country
Development of infrastructure-Roads, rails, airstrips, power supply and sanitationOccupying vast tracts of land while indigenous people are landless
Provision of services- health, education and recreationLow wages to local labour
Development of industriesLocal people doing menial jobs while managerial jobs are reserved for foreigners
Transfer of technology to indigenous peopleIndulgence in local politics
Urbanisation and good quality housingCareless exploitation of resources and moving on when these are exhausted
General raising of living standardMonopoly of the market

The character and distribution of industry in Zimbabwe

  • The character of industry in a country refers to the issues of historical growth of the industries, the types and patterns of industry as well as policy issues on industrialization and problems being faced.
  • Distribution simply means the spread of the industries in the space economy of the country.
  • The character and nature of industries found in Zimbabwe includes the metallurgical industries, iron and steel and basic metals, mechanical industries such as engineering, car assembly, electrical goods and railway stock.
  • There are also light industries like food stuff, drinks, tobacco, textiles and footwear.
  • Then we have chemical industries such as manufacture of chemicals, oil refining, fuel and fertilizer making.
  • Other industries include paper and printing, furniture making, rubber goods, cement manufacture, power stations and tourism.
  • At policy level, the industry scenario in Zimbabwe has the following thrust:
  1. Promoting small businesses, the informal sector, which is cheap to run with little capital input and creating many jobs for example craft industries have always existed in Zimbabwe and these are simply upgraded.
  • Included here are metal goods or products like window and door frames, utensils, wire and then pottery, carving, basketry etc.
  • The Zimbabwean government, like its third world counterparts, is promoting the informal sector in a number of ways and for various reasons.
  • These methods include establishing co-operatives, establishing small business development corporation such as the Small Enterprises Development Corporation (SEDCO), offering technical, financial and other business advice to small firms and building factory shells for rent by small businesses.
  • The reasons are for provision of goods at affordable prices for the poor local markets, import substitution and savings in foreign exchange, employment and savings in foreign currency, employment, employment generation, promotion of self-employment and is designed to meet local needs.
  • Luckily, this policy ensures that output can be changed to meet changing demand.
  1. Processing for export and semi-processing of primary products from agriculture, mining and forestry.
  • This is done because some raw materials are perishable in their raw state.
  • This reduction in bulk results in cheaper transport costs.
  • Their raw materials are available and easy to exploit.
  • Processed or semi-processed goods fetch higher prices on international markets raising their export value.
  1. Privatization of government companies.
  2. Indigenization of the whole economy.
  3. Decentralization of industries and other economic activities to growth points in rural areas.
  4. Promoting take-overs of closing firms by workers.
  5. Promoting joint partnerships between locals and foreigners.
  6. Establishing Export Processing Zones (EPZs).
  7. Government joining regional groupings to improve on industry, trade and other economic sections.
  • In terms of distribution, Harare easily dominates, followed by Bulawayo in most industries except metal and paper.
  • Metals are concentrated in the central Midlands and pulp and paper in Mutare and Marondera.
  • Service industries are found in all urban centres as well as the resort centres of the country.

Industries in Zimbabwe as well as government strategies for industrial growth face the following problems:

  • Shortage of capital by both the state and the target population – the indigenous population.
  • Corruption and inefficiency.
  • Unwillingness of private companies to assist or decentralize.
  • Lack of industrial and other expertise by the indigenous population.
  • Demand by the private sector and foreign forces to let market forces to operate in Zimbabwe.
  • Trade unionization of workers demanding higher wages and salaries leading to industrial action and reduced productivity.
  • Shortage of foreign currency to import raw materials.
  • Regular power cuts, water supply shortages and transport blues.
  • Competition between the informal sector and private companies leading to the closure of large enterprises for example Cone Textiles.
  • Political mistrust between government and private entrepreneurs.
  • Indebtedness and high interest rates of loans.
  • With all these problems, the industrial future of Zimbabwe looks very bleak indeed.

To access more topics go to the O Level Geography Notes page

 

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