The Sunday Mail
I hear it’s happening this week — the operationalisation of the Consignment Based Conformity Assessment (CBCA) of the republic’s imports by a Paris Stock Exchange-listed firm, Bureau Veritas.
The firm is a global leader in testing, inspection and certification of goods to address the growing challenge of quality, safety, environmental protection and social responsibility.
Government gave the firm a four-year contract to conduct a conformity and valuation programme on our imports with a view to reduce hazardous goods and substandard products, like second hand underwear, to Zimbabwe.
The CBCA will apply on the following products: food and agriculture, building products, timber and timber products, petroleum and fuel, packaging material, electrical and electronic products, body care and health products, automative and transportation, clothing and textiles, engineering equipment and toys.
Bureau Veritas will provide compliance certificates to regulated products exported to Zimbabwe at source and prior to shipment.
The certificates of conformity will then be produced to pass through the borders into the country.
Given the quantum of substandard imports being made for the above-mentioned products, the move will substantially lower our import bill and help in our strong desire to deal with the perennial trade deficits.
The country’s first quarter trade statistics point to a clear case of a widening trade deficit, which dents our macro-economic lucrativeness.
The reduced imports will, therefore, mean that local consumers will have to substitute some of the imported products with locally manufactured ones, a move that will increase domestic demand — which is one of the top perennial perpetrators constraining capacity utilisation of the manufacturing sector.
The very capacity utilisation that has been falling for nearly half a decade now.
Once capacity is restored in the manufacturing sector, jobs, too, will be created, resulting in more being employed, thereby creating more spending power.
Taking the example of the clothing and textile, which will also be monitored under the CBCA, we will see that it actually won’t be difficult for the local clothing manufacturers to achieve their target of growing employment figures by 400 percent in the next four years, as they have recently indicated.
The clothing manufactures said that they want to create 35,000 jobs by 2019, based partly on trading of quality products.
This is just one sub-sector we are talking about; just imagine how many more jobs will be created in other sub-sectors.
CBCA is, therefore, a non-tariff protection measure of a kind that will ensure fair competition on the market.
Over and above, it will improve customs duty collection.
But the other important thing really is how the envisaged reduction in imports will abet the liquidity situation as less income will be now withdrawn from the local circular flow to pay for imports.
Improved liquidity will certainly strengthen the function of our financial sector.
Finance and Economic Development Minister Patrick Chinamasa spoke about the importance of a vibrant financial sector in Parliament on Wednesday last week.
He said: “Without a sound financial sector . . . there is no economy.”
What must be noted by Government is that the above benefits will only be meaningfully realised if concrete measures are put in place to address the problems of smuggling and the use of illegal borders, prior to the operationalisation of CBCA.
The cowboy in me is otherwise still asking whether we have not put the cart before the horse here.
Some of you folks may still remember my article of last year, titled “A sovereign nation without walls”, where I pointed out that the republic has more illegal borders than formal ones.
I also argued that virtually all hazardous products are brought into the country through these illegal entry points.
Smuggling that occurs at the formal borders, through corrupt means, also facilitates the movement of large volumes of substandard products into the country.
If Government does not address the above issues, Bureau Veritas will become just a white elephant, good in principle but flawed in implementation. It will be a trap that catches no mice.
It is, therefore, important that Government pronounces comprehensive and concrete measures that will be put in place to effectively destroy all the illegal borders and stamp out smuggling.
It is also my understanding that Bureau Veritas will only operate for four years and then hand over the reins to the Standards Regulation Authority, an institution which shall be established through an Act of Parliament.
We don’t want the four years to lapse with nothing on the ground established.
I hear that Bureau Veritas is offering similar services to Tanzania and Kenya and that they have recently renewed their contracts with the company.
Bureau Veritas’ services, however excellent, come at a cost that will actually increase the cost of doing business for many local firms.
The certification comes at a cost of between US$250 and $7,000 per consignment, depending on the category of the goods, which roughly averages 1 percent of the total consignment value.
Those costs can be lowered if we are to have the Standards Regulatory Authority in place come 2019.
One thing we have also learnt from Sadc is that certificates of origin can be counterfeited, which calls for measures to be put in place to ensure that Bureau Veritas’ compliance certificates will not be tampered with as well.
