ZIMBABWE has externalised a cumulated figure of $30 billion since 2009 through imports, a figure enough to fund the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset), an expert has said.
BY MTHANDAZO NYONI
Addressing delegates at a budget dialogue in Bulawayo yesterday, an economist and consultant, Gift Mugano said there was need for the country to take local content policy seriously to reduce the trade deficit.
“I just want to look at what have been the effects of the local content in our trade, because our issue here is trade. Since we dollarised in 2009 we have externalised a cumulated figure (of) $30 billion out of trade deficit,” said Mugano, who presented on local content policy.
“So, year in, year out, we are running trade deficit. That is enough to fund ZimAsset. And for Zimbabwe we need to make a surplus, if we want to bring our Zimbabwe dollar back with a bang not bond notes, we need to have reserves of US dollar in our account and you only have reserves when you have surplus.”
“China has reserves exceeding $4 trillion and every year they are running trade surplus. So we need reserves and we cannot bring back Zim dollar as long as we have no reserves in the central bank,” he said.
Zim Asset is the government’s economic blueprint adopted from the Zanu PF 2013 election manifesto and requires funding to the tune of $27 billion and was supposed to run from 2013 to 2018.
But the money could not be raised due to lack of resources, among other factors.
Mugano said government should prioritise the local content policy.
“Local content is not something you can do overnight. You select areas where you are competitive. Nigeria failed on the local content dismally, why because they didn’t do proper due diligence. Nigeria picked areas which they didn’t have capacity….,” he said.
“So you need to identify which area you have a competitive advantage, which areas can rise up very fast. So if you protect an area where you have no competitive advantage you will have challenges and it fails.”
Mugano said for local content there was need to put a framework that is business oriented and the policy should not be forced on people.
Last year, government came up with Statutory Instrument 64 of 2016 which restricted the importation of 43 products with local equivalents in a bid to promote local industries.