The Sunday Mail
Government will promulgate the proposed Local Content Regulations by year-end after the private sector petitioned President Mugabe to fast track introduction of the regulations.
The guidelines will compel manufacturers to procure the bulk of their goods and services from local suppliers.
Representatives of the private sector made the plea to the President during their recent interface at State House to exchange notes on charting an economic turn-around.
The meeting, first of its kind in over 10 years, witnessed captains of industry lobbying Government to speed up the ongoing ease and cost of doing business reforms in order to facilitate rapid industrialis- ation.
Industry and Commerce Minister Dr Mike Bimha told The Sunday Mail that the indaba marked a clear indication of Government’s commitment towards a speedy economic recovery anchored on participation of the private players.
Fast tracking
He said the interface was an extension of President Mugabe’s thrust of fostering industrialisation which he first introduced as SADC Chairperson between 2014 and 2015.
Minister Bimha said central to demands by the private sector was the fast tracking of the ease and cost of doing business reforms as well as the promulgation of the local content policy.
He said: “The local content policy is still work in progress which is being tackled by a special taskforce from our mnistry.
“They are consulting with various stakeholders on what they may want incorporated into the final regulations and we expect to be done with all the work by year-end.
“The private sector raised that issue with the President saying that while they are grateful about SI 64 they would like to a see a robust reinforcement of the policy.
“As such, we are working flat out to ensure that the policy is ready ahead of time.”
The Local Content Regulations will set sector-specific procurement thresholds in order to promote locally produced products and incubate the local industry.
The Local Content Regulations (LCR) will form a key part of Government’s broad industrialisation initiatives through maximising the localisation of supply chains and in turn discouraging mass importation of goods that are otherwise available locally.
The new rules will, in part, enhance the impact of Statutory Instrument 64 of 2016, which was introduced to regulate importation of goods that are available locally and promote capacity utilisation by local industries.
Its enforcement has witnessed steady growth of capacity in some sectors such as food and beverages production.
Minister Bimha said the President made it clear that the private sector has a role to play in the implementation of Zim-Asset and the overall industrialisation thrust.
“Our economic blueprint Zim-Asset is very clear that it is the responsibility of the private sector to drive its implementation.
“Right now as a region — Sadc — our focus is on industrialisation, which is an issue that took off under President Mugabe’s tenure as chairperson.
“He managed to convince other regional leaders that our focus should be directed towards industrialising the region.
“We then identified the private sector as the driver of industrialisation in the region.
Agenda 2063
“This has since gone beyond just Sadc, into the African Union through Agenda 2063; the issue of industrialisation is central to our development and this can only happen when the private sector is involved.
“A couple of months ago I travelled with the President to Mauritius for the inaugural African Economic Platform which brought together representatives of governments, the private sector and academia where we discussed how we could all drive the continent towards industrialisation through the private sector.
“Last month, we also travelled with the President to Pretoria for the Sadc Summit which ran under the theme, ‘Partnering with the private sector in developing industry and regional value chains’.
“So, the interface was important as it comes only a few weeks after the region met and agreed that the private sector participate in our development.
“Also, more importantly, is the fact that we last had a meeting of this nature 10 years ago.”
Minister Bimha said the meeting came at the request of the private sector, an indication of industry’s eagerness to work closely with Government.
He said industry expressed gratitude for Statutory Instrument 64, which brought some companies back onto their feet while also attracting a lot of investors from outside.
Minister Bimha will soon present a report on the meeting to Cabinet.
“They were also happy about policies such as the introduction of Special Economic Zones as well as the stabilisation of the finance sector, among many other interventions.
“They also identified areas where as Government needs to speed up reforms, we also realised that these are areas we are already looking into. I will be giving a report in Cabinet on what the private sector wants to be done.”
A paper presented by business to President Mugabe called for robust measures to address the cost of doing business.
It reads: “Government instituted SI 64 to regulate imports, particularly of non-essentials, and this has had the effect of increasing capacity utilisation in some sectors of the economy, most notably edible the oils sub-sectors, leading to an overall increase in domestic capacity utilisation from 34,3 percent to 47,2 percent last year.
Competitiveness
“The SI contributed to the increase in capacity utilisation in sub-sectors such as foodstuffs, drinks, tobacco and beverages manufacturing; wood and furniture as well as paper, printing and packaging — with some sub-sectors now operating at 70 percent capacity utilisation levels.
It continued: “To enhance business competitiveness, it is imperative that the Doing Business Reforms be expanded to also cover the cost of doing business and interrogating the underlying causes of the above costs, with a view to aligning to the region.
“The high transport costs, the high utility charges, red tape and delays at border posts, which augment the cost build-up — there is need for a comprehensive review of every cost line that is contributing to the high costs of business in Zimbabwe.”
Business was represented by the Confederation of Zimbabwe Industries (CZI), Bankers’ Association of Zimbabwe, Chamber of Mines of Zimbabwe, Zimbabwe Farmers’ Union (ZFU), Zimbabwe National Chamber of Commerce, (ZNCC), Agricultural and Rural Development Authority (ARDA)and Zimbabwe Council of Tourism.
