The Sunday Mail
President Emmerson Mnangagwa’s Government last week indefinitely suspended some sections of Statutory Instrument 122 of 2017.
This effectively means that companies and individuals with free funds or offshore finance can import specific basic commodities without the need for a licence or permit from Government. It appears as if Government took this route after witnessing widespread basic commodity shortages, which sparked unprecedented price increases and saw many businesses demanding United States dollars as tender for goods and services that they provide.
Admittedly, and as the Finance and Economic Development Ministry and Reserve Bank of Zimbabwe have pointed out on different occasions, the country’s macro-economic fundamentals are serious cause for concern and have contributed to the current state of affairs. But in addition to that, another cause of the malaise is hoarding on the part of panicking consumers, blatant profiteering by businesspeople, and rampant black market currency dealing by well-connected individuals.
This speaks to the need for holistic interventions.
One of those interventions is the clampdown by the police and other authorities on black market currency activities. It is every progressive Zimbabwean’s fervent desire to see authorities root out this criminality before it does further damage to the economy and people’s livelihoods.
Another intervention is the lifting of restrictions on certain imports of basic commodities.
Now that the restrictions have been removed, individuals and companies holding offshore and free funds can import the listed commodities.
Upon promulgation, the regulations on restricting imports were intended to provide protection to specific productive sectors that had been at the receiving end of an influx of cheap imported goods.
The influx of the foreign goods affected the well-being of local industries, constrained job creation capacity, and drained the little foreign currency available locally.
However, we have seen that in the absence of corresponding support to capacitate local industry — by way of retooling, market development and skills upgrading, among others — it is not enough to simply restrict imports and expect growth and development.
Further, local businesses should now appreciate that market forces will not allow them to profiteer at will just because they have been gifted protections by Government.
Instead of complaining that Government has once again exposed them to foreign competition, local industry has to learn to be competitive and efficient.
The fact that Zimbabwean consumers, their primary market, are applauding the lifting of restrictions should tell them that they have been operating sub-optimally for years.
Local industry cannot continue to live in a bubble in which they milk Zimbabweans of the little they have and then claim to be successful businesses.
Even if import restrictions are maintained as a lone tool to cushion local productive capacity, as long as prices are higher than those obtaining in the region, we will see a lot of smuggling and black market currency trading.
The false sense of success and ill-deserved self-satisfaction of uncompetitive but mollycoddled local business must be brought crashing down so that in their place, efficient and well-structured enterprises can emerge and thrive. Serious businesspeople will not be shaken by Government’s lifting of import restrictions.
And it is these firms, especially those with recognisable and stable brands, that should get support from the State — and consumers — so that they can retool and expand operations so that they contribute more to employment creation, tax generation and export revenues.
In the same way that the public has demanded the dissolution and/or restructuring of non-performing State enterprises and parastatals, so too must the private sector self-correct.
Government has come up with its plan for the public sector, and the private sector — by nature being driven by the profit motive — should innovate and find ways of surviving and thriving.
The new competition from imported goods should prompt a rethink by profiteers and restrategising by ethical businesses that want to withstand the challenge.
That said, Government must keep its finger on the pulse. It must closely monitor the local production-imports matrix so that restrictions on certain goods are progressively introduced as Zimbabwean companies improve their own efficiencies.
A fine balance must be maintained so that our ethical businesses can be nurtured and appropriately supported.
Businesses themselves must sit down and map their future, that way they can work with Government on implementation on any restrictions in a phased and planned manner that stimulates jobs, taxes and exports.
As President Mnangagwa meets industrialists in Harare this week, we hope business will not approach the Head of State and Government as crybabies, but rather as innovative, ethical and hardworking Zimbabweans who want to see genuine economic growth and development.