Zim to cut imports . . . Five-year bill tops US$35bn

26 Nov, 2023 - 00:11 0 Views
Zim to cut imports  . . . Five-year bill tops US$35bn Zimbabwe has witnessed a significant increase in the number of locally produced goods on local supermarket shelves over the past few years, but Government is determined to improve the situation further

The Sunday Mail

Oliver Kazunga

Senior Business Reporter

THE Government is working on a raft of measures to whittle down an unsustainable import bill, and chief among the interventions will be strengthening of value chains across all economic sectors, amid revelations shipments into the country totalled US$35 billion over the last five years.

Strengthening of the value chains will entail adopting a comprehensive approach to enhancing the competitiveness and productivity of the country’s key industrial sectors.

In an interview, Industry and Commerce Minister Dr Sithembiso Nyoni said value chain strengthening will involve improving linkages and coordination between stages of production and distribution, and across different industries, including the manufacturing sector.

She said, as part of measures to cut the huge import bill, the Government and the private sector were collaborating to identify and address bottlenecks, investing in infrastructure, prioritising import substitution and fostering innovation.

Support for industry since the advent of the Second Republic in 2017 has seen the share of locally manufactured goods in supermarkets increasing from below 50 percent to over 80 percent presently.

“We are focusing on manufacturing and import substitution so that we grow an economy that is self-sufficient because if we don’t do import substitution, it means we will be exporting a lot of foreign currency importing goods. For instance, in the past five years, Zimbabwe has spent over US$35 billion importing various items, some of which we could make ourselves,” she said.

“To reverse the trend, as Government and in collaboration with the private sector, we are adopting a host of strategies such as strengthening of value chains across all economic sectors — in the manufacturing sector, for example, adopting innovation and retooling industries with state-of-the-art technology, in line with the Fourth Industrial Revolution,” said Dr Nyoni.

The Fourth Industrial Revolution brings with it several technologies such as artificial intelligence, the internet, robotics, virtual reality, cloud computing and 3D printing, which present vast opportunities in the economy.

Support for the growth of the digital economy is one of the national priorities in the march towards achieving an upper middle-income economy by 2030. Already, the National Development Strategy 1 envisages a digital economy, e-Government and an increasingly digital society.

Following her appointment as Minister of Industry and Commerce, Dr Nyoni toured some of the key industries in Harare and Bulawayo, and observed that despite the challenges in the economy, most of the companies were expanding their operations.

“I think the manufacturing industry is doing very well. I have visited some of the manufacturing companies, both in Harare and Bulawayo. Most of them are expanding despite the challenges they may be facing. They are really soldiering on and that is very encouraging,” she said.

Zimbabwe National Chamber of Commerce president Mr Mike Kamungeremu said industry and commerce were optimistic that the unsustainable import bill haunting the country could be reduced by prioritising local production and import substitution.

“What we need is import substitution by prioritising local production and supporting local industries; one way of supporting them is to guarantee a market by buying from them, so the Buy Zimbabwe concept must be cultivated across the country, from Government to the private sector. Let’s not import anything that we can produce locally,” he said.

In May this year, Government scrapped import duty on 14 basic commodities for six months in response to unjustified price increases by unscrupulous retailers, and in a bid to ensure availability of the products at competitive prices.

The prices, linked to the wild exchange rate, had led to the erosion of buying power and constrained consumer aggregate demand.

“We understand that the Government had to allow citizens to import foodstuff to achieve a specific objective that it wanted to achieve at that particular time, but probably it’s high time we focus on local production.

“Originally, the Government had said it was for six months and it’s our hope that the Minister (Professor Mthuli Ncube), when he presents the 2024 National Budget next week, that open window may be closed because we need the local industry to thrive,” said Mr Kamungeremu.

He added that there was need to buttress the retooling of the local industry to become competitive in light of the opportunities by the African Continental Free Trade Area (AfCFTA) that fosters intra-continental trade.

Confederation of Zimbabwe Industries president Mr Kurai Matsheza echoed similar sentiments, saying, as industrialists, they were collaborating with the Government in strengthening value chains.

“We’re playing our part by capacitating ourselves to strengthen the value chains and make sure we reduce the import bill.

“So, we continue lobbying and making sure that, as an industry, we grow our capacity utilisation levels and embark on value addition to produce finished and competitive products.

“When you look at the AfCFTA, we don’t want to be a dumping ground for imported goods and services. We actually want to be able to export what we are producing locally,” he said.

African countries began officially trading under the AfCFTA in January 2021, following delays induced by the Covid-19 pandemic. Zimbabwe ratified the AfCFTA in 2021, paving the way for the country’s full participation in the bloc. The AfCFTA seeks to eliminate tariffs on 90 percent of goods traded between member states over a period of 10 years.

This means industries across the continent need to brace for stiff competition and the consolidation of value chains is critical in ensuring Zimbabwean businesses shrug off competition.

Share This: