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Industry embraces import controls

Manufacturers have welcomed the move by government to control imports, saying it should be complemented by the removal of duty on raw materials to boost local production.

BY TARISAI MANDIZHA

Last Friday the Ministry of Industry and Commerce gazetted stringent regulations meant to control the importation of goods available locally.

The regulations, gazetted under SI 64 of 2016 become effective on July 1. Under the new rules, those who want to import listed goods have to apply for a permit which costs $30 and is valid for three months. Before acquiring the permits, those applying have to justify the need to import the particular goods.

Confederation for Zimbabwe Industries president Busisa Moyo said the industrial body supported the programme of industrialisation through value addition and beneficiation, the enhancement of value chains, growth of value added exports and import substitution of commodities and essential goods that the country is capable of producing locally.

“We believe the import restrictions should be complemented by removing duty on all raw materials for production, removing requirements for export permit requirements for non-essentials to increase Nostro balances; this includes bananas and coffee,” Moyo said.

He said the manufacturing sector needed a kickstart and the restrictions would encourage the retail sector to support local industries.

“Most of the things on the list have local or equivalent substitutes that are manufactured locally. It will increase capacity utilisation and encourage factories that were about to close to restart operations, for example, in the furniture sector,” he said.

“The technology used, price and quality will certainly have to be looked at and improved, which will materialise at higher economies of scale. We have seen this with cooking oil and green bar soaps and it’s very possible.”

Nestlé Zimbabwe managing director Ben Ndiaye commended the new regulations to control imports, saying the smuggling of goods was affecting his business and the economy as a whole.

“Promoting local production and local job creation is always the best way to go for the entire community,” Ndiaye said.

He said Nestlé had the capacity to meet national demand after undertaking a $30 million capital investment project to refurbish the dairy, creamer and cereals manufacturing line, thereby increasing production capacity.

Buy Zimbabwe economist Kipson Gundani said the restrictions on imports was a timely intervention that came at a time when the country was suffering from the debilitating effects of an unsustainable import bill.

“It is common cause that a country that fails to rein in its import bill against declining export income is surely and certainly digging its own grave.

Even those who could import tonnes and tonnes of anything foreign suddenly are realising that without a thriving local economy that is supported by a robust industry, gains can only be short-lived,” Gundani said.

He said in real terms, Zimbabwe’s import bill remained very high and unsustainable, averaging $7 billion annually since 2011.

Gundani said Buy Zimbabwe partners like Cairns, National Foods, Nestlé, Dairibord and Lyons among others should take advantage of these measures and significantly increase production.

Finance minister Patrick Chinamasa said restrictions on imports were meant to reduce the import bill and to support local industries.

“We did not say we are banning the importation of products. we are aware of the Sadc protocol and we respect that. everything that we are doing is in line with Sadc protocol. It’s just that we are going to be using the licensing system,” he said.

Zimbabwe is a member of the World Trade Organisation, ACP-EU Cotonou Agreement, regional trade arrangements (Sadc, Comesa), and signed bilateral trade agreements with neighbouring countries, that is the Trade Agreement Group, which includes Botswana, Namibia, Malawi, Zambia and South Africa.

These arrangements provide frameworks for further liberalisation of trade, and Zimbabwe has made commitments within each of these arrangements towards that objective.

Prior to the 1991 reforms, Zimbabwe imposed stringent controls on trade, foreign currency flows, the exchange rate and environmental protection grounds.

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