BY TATIRA ZWINOIRA
Government is in the final stages of crafting a National Local Content Policy (LCP), which will be tabled to cabinet this week, an official has said.
Zimbabwe first started formulating the LCP in May 2017 to try and rein in the unsustainable trade deficit. Adoption of the policy had initially been set for March this year, but was later postponed as the policy needed to be fine-tuned.
Industry and Commerce permanent secretary Mavis Sibanda told Standardbusiness that government was eager to see its speedy adoption.
“The cabinet committee of officials has seen it (LCP) and it has been passed…It is being submitted together with the Industrial Development Policy because the Local Content Policy is being informed by the Industrial Development Policy.
“So, the two of them have been seen by the ministers, who have been very good and gracious to give us additional input, which has been factored in and sent to the ministers. We are hoping they (ministers) will discuss next week, early next week, and if it is passed, it should be tabled to Cabinet as soon as it is cleared.”
The Industrial Development Policy will provide the blueprint to increase production for both the domestic and export markets through the promotion of viable industrial and commercial sectors.
The last Industrial Development Policy ran from 2012 to 2016 introduced under former Industry and Commerce minister Welshman Ncube.
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Buy Zimbabwe CEO Munyaradzi Hwengwere said the trade deficit made it a necessary for a local content policy to improve on exports.
“We have low productivity on the local market. The RTGS dollar has become a proxy for the US dollar, yet most of the stuff is imported, so the local content policy will then drive the enhanced productivity on the local market, so it is something that we cannot run away from. We are glad that government is now saying they will finalise that (LCP) and we can only hope that they get it done,” he said.
“We as Buy Zimbabwe with the Ministry of Industry and Commerce are starting a nationwide ‘Buy Local’ campaign that I think is starting on Monday (tomorrow) in Chitungwiza and it will go all over the cities to encourage people to identify local products and consume local products. So yeah, I think the essence is that this time around we can finalise the local content policy.”
He said increasing local production could result in US$1 billion worth of savings.
Zimbabwe’s dependence on imports has hampered the country’s ability to generate foreign currency through exports as imports continue to outweigh the former. In the last three years alone, the trade deficit has averaged between US$1,5 billion and US$2,5 billion.
However, Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said the country needed in excess of US$2 billion in fresh capital to capacitate industry. Industry capacity utilisation stands at 48% according to the CZI.
“It is mainly working capital and the finance for retooling that industry needs to increase capacity. It (working capital requirements) is probably higher, but with US$2 billion you can get most of the companies going,” he said.
A 2017 report by the United Nations Economic Commission for Africa stated that “local content regulations should include incentives to attract local financial institutions into the sector, encouraging them to lend to potential local investors”.
