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Is the non-metallic minerals manufacturing sub-sector in Zimbabwe efficient?

David Damiyano, Nirmala Dorasamy

Abstract


The study analysed the efficiency of the non-metallic minerals manufacturing sector in Zimbabwe. The background to this study is the continuous decline of the manufacturing sector in Zimbabwe and in particular the non-metallic minerals manufacturing sector in Zimbabwe. The manufacturing sector is the strength and stimulus of both the extractive and service sector in any economy. It has a large contribution to vital economic indicators like employment, Gross Domestic Product (GDP) and export. A non-parametric methodology, Data Enveloping Analysis (DEA) was used to measure efficiency in the non-metallic minerals manufacturing sector in Zimbabwe and estimating the drivers and barriers to efficiency using STATA econometric software. ZIMSTAT data from the non-metallic minerals manufacturing sector in Zimbabwe was used to calculate efficiency scores of Decision Making Units (DMUs) in the sector. Input variables used were; cost of raw materials (CM), energy (E), water and sewage (WS), cost of services (CS) and output variables used were; sales (S), value added (VA), gross value of production (GVP). The sector was analysed under the two assumptions; constant returns to scale (CRS) and variable returns to scale (VRS). Under CRS, 33% of the DMUs are efficient and 67% are inefficient. At least 48% of the DMUs are operating above the average efficiency of 74%, whereas 52% of the DMUs are struggling below the average efficiency level. Under VRS, 48% of the DMUs are efficient and 52% are inefficient. At least 67% of the DMUs are operating above the average efficiency of 83% whereas 33% of the DMUs are struggling below the average efficiency level. Therefore, this sector should attempt to scale operations and assume VRS.


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