The Sunday Mail
Buying local products will help reduce the import bill
Stories by Enacy Mapakame recently in Victoria Falls
Industrialists have accused Government of not doing enough to protect local products against cheap foreign product imports that are flooding the country’s markets.
They argued that more policies that promote te Zimbabwe brands need to be implemented.
These sentiments came up at the recently-ended fifth edition of the Buy Zimbabwe Buy Local Summit that was held in Victoria Falls last week. Business leaders and captains of industry accused policymakers of “not being serious” in boosting industrial production or pushing the sales of local goods and services.
They said manufacturers needed national policies that enhance competitiveness, diffuse the scourge of cheap imports while transforming the economy from one that is consumer-centric to producer-based. One such strategy includes the decentralisation of key economic activities from major towns to smaller ones, according to Buy Zimbabwe general manager, Mr Munyaradzi Hwengwere.
“This (decentralisation) will ensure enhanced economies of smaller towns and growth points as new opportunities are identified,” Mr Hwengere told The Sunday Mail Business in an interview.
“We envisage an economy where Zimbabweans will be masters of their own destiny through creating business linkages from the bottom of the value chain in rural areas to the export market.
“This is what we can do as business, when we go there (smaller towns), we identify opportunities and buttress them until we achieve our goals of an economic turnaround.”
Buy Zimbabwe seeks to promote the consumption of goods produced locally to boost domestic manufacturing. This is particularly crucial in light of the falling industrial and agricultural production which has forced the country to depend on imports for 60 percent of its food requirements.
Most of the imported goods can be produced locally, provided industry overcomes existing challenges with liquidity, old equipment and unsupportive policies. Currently, industry is operating at 36 percent capacity, down from 57 percent four years ago, says the Confederation of Zimbabwe Industries.
African Development Bank (AfDB) resident representative, Mr Mateus Magala said Zimbabwe is failing to craft policies to lure foreign investors with real money. The 2014 World Bank Doing Business ranks Zimbabwe number 171 out of 189 while the World Economic Forum Global Competitiveness Report for 2014/ 15 puts the country at 124 out of 144.
But with aggressive marketing this can change, said Mr Magala.
“People out there are afraid of Zimbabwe, but they do not know the truth. When they finally visit, they see a different picture,” he said.
However, in recent years Government has put in place some policies aimed at lifting industrial production. In the sugar industry, Finance and Economic Development Minister Patrick Chinamasa introduced a 10 percent tax on sugar imports in January to protect domestic manufacturers, helping to boost sales for producers such as Hippo Valley.
After reporting a 20 percent profit decline during the year to March 2015 due to lower prices and cheaper imports, Hippo Valley recently said that since the imports tax, higher-priced domestic sales contribution to revenue had almost doubled to 63 percent from a year ago.
Analysts expect Hippo Valley’s volumes to rise 4,3 percent to 238 000 metric tonnes in 2016 and revenue to climb 7,1 percent to US$157,2 million, thanks to Government’s interventionist policies and higher global sugar prices.
“Government’s intervention to protect the industry against cheap imports is clearly paying off for local producers and we expect local demand to remain firm,” stockbrokers IH Securities said in a recent update.
At the Victoria Falls meeting, stakeholders urged Government to work hard to improve the business environment, reform policy, attract foreign direct investment and re-brand Zimbabwe.
“The question is who is passing that negative image (about Zimbabwe). As a country it is our role to speak positive,” said CZI Mashonaland chamber president Mr Sifelani Jabangwe.
The Buy Zimbabwe campaign, an otherwise noble initiative launched in 2009 to promote and advocate for policies that stimulate local production, has not yet had the intended impact.
Experts say the major reason for this failure is the uncompetitive pricing on Zimbabwean goods, which are at a premium relative to imports.
Buying expensive local products ceases to be a priority when there is no food on the table.
Critics say Buy Zimbabwe has failed to reach the consumer, its most important target, but remains eschewed in the corridors of endless conferences.
However, promoting local goods and services is critical in propelling investment, job creation and labour retention.
Consumers provide key support to industrial growth when they purchase domestically produced goods.
