The Sunday Mail
Shamiso Yikoniko and Livingstone Marufu
Industries and economists have joined hands in supporting the recently gazetted regulations under Statutory Instrument 64 of 2016 to control and regulate the importation of certain goods that are available locally saying that the move will promote local industry’s growth in the long run. The Ministry of Industry and Commerce has put in place this regulation after cheap imports flooded the local market, thereby leaving locally manufactured goods out of favour.
The fact that the country has allowed imports to co-exist with the local goods may have contributed to the high unemployment rate and cash shortages as the country pumped out more money than was being brought into the economy.
Naturally, this left more people without employment.
It is Government’s responsibility to remedy the situation through regulation of trade to create the right environment for local businesses to fill in the gap created by the import restriction.
The goods that are on the list of the restricted categories under the statutory instrument include wheelbarrows, lock gates, lattice masts, roofs, roofing frames, doors, windows and window frames, shutters, corrugated roofing sheets, baked beans, potato crisps, cereals, bottled water, mayonnaise, salad cream, peanut butter, jams, maheu, canned fruits and vegetables, pizza base, cheese, ice-cream, yoghurts flavoured milks, furniture and so on.
All these goods are available locally.
Economist Dr Albert Makochekanwa said at some point, the local industry should be promoted but there was need for extensive consultations before bringing the statutory instrument into play.
“The removal of some goods that are produced locally from the general import licence promotes the local industry as well as reduce the over-dependence on the imports as well as creating employment.
“Manufacturers are the biggest beneficiaries of this piece of legislation as they will be protected by the law but they must make sure that they have the arsenal to supply the local market.
“On the other hand, consumers may suffer due to high prices of the local goods as we are a high cost production nation where cost of production is generally high,” added Dr Makochekanwa.
Another economist, who chose to be anonymous, said as much as the import ban is a strategic move by the Government to stimulate the growth of domestic manufacturing capacity, there is also a need to inject capital in the local industry.
“If goods are being produced in Zimbabwe, this creates employment as increased production minus the imports means increased sale of the domestic product and job opportunities for Zimbabweans.
“This is a way of kick-starting Zimbabwe’s economic growth. Local entrepreneurs will start producing or for those who are already producing those goods locally, the goods will become cheaper for local people.
“Cross board traders are basically exporting employment opportunities to the South African economy. It is also a fact that Government has a responsibility to come up with solutions and sometimes such solutions may be unpopular with some sections of the public.
“This is a dilemma for the Government which is faced with the challenge of making decisions for the greater good of all and for the long run.
“When people buy goods produced in South Africa for example, they are boosting sales for South African businesses and increased sales for these businesses mean more employment opportunities for them and not for Zimbabwe. There is an urgent need to kick-start the Zimbabwe economy and an import substitution strategy is a good starting point.
“After all has been said and done, we need to inject money into our local industry to boost production as protection of unproductive industry will worsen things, so we should find investors to revive our industry,” he said.
He also said that for Zimbabwe to have an industry to protect, whatever is there or was there, requires time, promotion and protection to build capacity to be able to compete against products from outside.
The Zimbabwe manufacturing sector is being choked by cheap imports. The local manufacturers are struggling because a lot of revenue is being lost to the industrial and agricultural imports that are in most instances inessential and can be made, produced and accessed locally; in the process stifling formal employment.
“The economy is heavily burdened by these imports and it is struggling to grow.
“The value of producing wealth is more important than the wealth itself because of the long-term implications. Imports may create a profit for the individual but the long term impact on the country’s manufacturing sector is dire.
“The argument being put forward by those who are against the import restriction is that locally produced goods are more expensive than the imports.
“That is correct. It is a fact that initially, protectionism can make the price of goods more expensive. However, with time as the country builds its capacity, the goods will be produced more cheaply.
“The Government is responding to the situation and looking at fostering an economy where wealth creation improves the economic and social fortunes of the majority.
“This is about an economy that focuses on all and not just certain individuals,” he explained.
Manufacturers, who have been struggling under the weight of increased imports, are confident that the restrictive measures adopted by Government will help them regain a foothold on the local market.
The Personal Care Manufacturers Association of Zimbabwe (PCMAZ) — which is made of companies such as Crown Health Care, Datlabs, Kubi, Plus Five Pharmaceuticals, Prochem and Vaida — said Statutory Instrument 64 of 2016 was a step in the right direction.
PCMAZ said they can ably supply the local market.
“We would like to thank Government and the Ministry of Industry and Commerce in particular for supporting local manufacturing by gazetting Statutory Instrument 64 of 2016.
“We would like to reassure the Zimbabwean market that we have the capacity to satisfy local demand with world-class quality and competitively-priced personal care products such as camphor creams, body creams and lotions,” said PCMAZ in a statement last week.
The country has spent lots of cash importing sundry items such as toothpicks, onions, tomatoes and apples in the past seven years.
According to information released by Zimbabwe Statistical Agency (Zimstat) in June, the country imported goods valued at $2 billion between January and May 2015 in comparison to the exports amounting to $948 million.
The restriction of locally available goods is expected to narrow or eliminate the deficit of over $1,1 billion between imports and exports.
