Companies affected by the recent Statutory Instrument restricting imports have been advised to collate their grievances as a sector for consideration by the ministry of Industry and Commerce.
BY TATIRA ZWINOIRA
In June, government introduced SI 64 of 2016 which removed 43 products from the open general import licence.
Standardbusiness was last week informed that companies affected by the restriction had been advised to sign memorandum of understanding (MoU) as a sector, citing common grievances. The grievances would then be taken to the ministry.
Most of the affected companies are those that have been importing raw materials that are not found locally. They include steel manufacturers, miners, pharmaceuticals, those into synthetic hair business, and manufacturers involved in personal care products, according to Confederation of Zimbabwe Industries (CZI) vice-president Sifelani Jabangwe.
He said there were also manufacturers that had complained that some of the products, included on the import restriction list were not found locally.
“So right now we are getting those sectors to come up with a list of products that can be manufactured locally together with another with products that cannot be found in Zimbabwe and, therefore, need to be imported. When we take these positions to government, they are adopting them because they are the positions coming from importers,” he said.
“As we said, the thrust is to do import substitution where those products that cannot be manufactured locally, government is giving out licences to avoid the issue of shortages.”
He said CZI had also received positive responses from industrialists who had recorded increased sales following the new law — some to “the extent that there is now pressure on packaging manufacturers”.
Recently, Zimbabwe National Chamber of Commerce president Davison Norupiri said the import restrictions had seen companies registering “significant capacity utilisation uptake”.
He said such growth had been witnessed especially in the cooking oil sector.
Founder of Nutrition for Africa, Justice Moyo, said the import restrictions had lessened competition from foreign sources resulting in orders coming from local retail stores. The local producers’ capacity was however being affected by lack of raw materials and other inputs and ingredients that were not found locally.
“These raw materials are mostly preservatives. We wanted to approach the ministry (Industry and Commerce) not as individuals but as an association of some sort. But, unfortunately in the maheu business we do not have an association. If you go as an individual, it will be difficult to present your case as one that is common among all maheu producers. So I am still trying to call other players to find out if they have the same challenges,” Moyo saidNutrition for Africa manufactures corn soya blend, overnight maheu powder, instant maheu, cooking oil and soya meal.
Through Nutrition for Africa, Moyo owns the “Vovita Maheu” which in May this year enjoyed 25% market share.
The local manufacturing industry complained it had been suffocated by imports which were also stunting its growth.
Government responded with protective measures restricting imports. These measures include SI 6 and 126 of 2014, SI 18, 19, 20 and 64 of 2016 which all restricted imports.
SI 6 of 2014 lists sugar, poultry and pork.
SI 126 of 2014 lists liquid or powdered milk, potatoes, tomatoes, onions, biscuits, yeast, cement, soap and soap preparations, plastic bags of polymers, and tubes, pipes, conveyor belts and rubber hoses.
SI 18 of 2016 listed several pharmaceutical medicines while SI 19 of 2016 listed second hand clothing, shoes, and blankets. SI 20 of 2016 listed specific kinds of batteries, candles, floor polish and tobacco twine.
Schweppes Zimbabwe managing director Charles Msipa said putting a ban on imported water would increase their sales.
The import regulations have mainly affected trade between Zimbabwe and South Africa. As a result, SA pushed government to reduce surtax and duties on 112 products in order to reduce the impact on the effects of SI 64.
Industry and Commerce minister Mike Bimha took the proposed review before Cabinet which said it was going to consider the request item by item.
Bimha said Zimbabwe advised Sadc on “where we were and both countries [Zimbabwe and South Africa] were happy on our deliberations”.
Sadc members endorsed our report,” Bimha said.
He said reducing imports was part of a Sadc effort where countries in 2012 committed to reduce unwanted imports.
High imports have been blamed for the low productivity in Zimbabwe.
At its peak, the manufacturing sector used to contribute 32% to the gross domestic product or $4, 44 billion. Currently, the sector is contributing 13,1% ($1,82 billion), according to CZI.