Business Editor’s Brief: It’s time business removes its diapers

22 Nov, 2015 - 00:11 0 Views
Business Editor’s Brief: It’s time business removes its diapers Some of the machinery used in industry is fit for the museum

The Sunday Mail

IN May 2006, Dr Gideon Gono, the then Governor of the Reserve Bank of Zimbabwe, railed against farmers who had developed a penchant of complaining endlessly about conditions in the sector, particularly in tobacco.
Apart from receiving subsidised inputs, the same farmers still expected additional pampering from Government through tobacco support prices.
Obviously incensed by the continued onerous demands from this group of farmers, Dr Gono branded them “cry babies”.
Local industry, it seems, has inherited the same unfortunate attitude.
Its answer to the continued influx of foreign goods, which has had an adverse effect on locally-produced goods, has been to arm-twist Government to further adopt tax measures that are meant to choke importers.
Government has had to magnanimously bend over backwards to accommodate the whims of local industrialists.
The tax measures that became effective on September 1, 2015 — tailored to protect multiple industries ranging from pharmaceuticals, beverages, milling industry and furniture, among others — are quite telling.
Despite being afforded this wide berth, industry is not content.
In fact, it is demanding more protectionist interventions.
The recommendations sent by various industry representatives to Government ahead of the presentation of the 2016 National Budget by Finance Minister Mr Patrick Chinamansa on Thursday read more like a wish list for Santa Claus than policy proposals.
Grain Millers Association of Zimbabwe, Furniture Manufacturers Association of Zimbabwe, Plastic Manufacturers Association, Battery Manufacturers and the National Bakers Association of Zimbabwe continue to expect Government to tighten the chokehold on imports.
Yes, there is clearly no sense in importing items such as toothpicks and other inconvenient goods, but the obsession with smothering importers while at the same time ignoring factors that can ideally improve the competitiveness of local industry is very worrying.
It is often said you cannot make a short man tall by chopping down the big man. Of late, Government’s preoccupation has been on improving the business environment to make the local market competitive.
It would have been comforting had local industry made proposals that have the direct impact of improving the efficiency, quality and production.
Government cannot afford to continue subsidising inefficiencies in local industry.
It is absurd to expect companies that are still using equipment fit for the museum to produce goods that stand toe-to-toe with foreign producers that leverage on state-of-the-art equipment whatever protectionist policies Government can adopt.
For example, part of the machinery that is used at Lobels Buscuits was acquired in 1956, while most of the equipment at David Whitehead was purchased in the 1940s.
This is precisely the reason why the Confederation of Zimbabwe Industries recently complained that the September 1 tax measures have not been as effective as initially projected.
Notwithstanding the current punitive duty structures, ordinary importers are still finding it cheaper to import.
One would expect Treasury to take measures that are meant to make it easier for local firms, especially SMEs, to import much-need machinery.
But Government can only do so much.
It’s high time industry removes its diapers, girds its loins and makes itself competitive.
It cannot afford to continue to consider Government as the be-all and end-all of its challenges.
Already, separate hygiene issues meant to improve the environment for doing business are being pursued, spearheaded by the Office of the President and Cabinet.
Equally, the private sector should also play its part, and if it is already doing that, redouble its efforts while at it.
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