Govt imports ban fuels smuggling: Bimha

Source: Govt imports ban fuels smuggling: Bimha – DailyNews Live

Gift Phiri      16 March 2017

HARARE – Zimbabwe’s ever-bumbling government is struggling to contain the
rampant smuggling of imported basic consumer goods that it ill-advisedly
banned last year, in a desperate bid to lower the country’s imports bill,
shore up the State’s empty coffers and protect local manufacturers.

In a stunning admission in Parliament last week, Industry and Commerce
minister Mike Bimha effectively said the controversial decision by
government to issue Statutory Instrument 64 (SI 64) in June last year,
which restricted the importation of basic consumer goods, was backfiring
spectacularly.

He said this had brought huge problems for authorities, including the
rampant smuggling of banned goods, as well as gross profiteering by some
of the local companies that were beneficiaries of the controversial law.

Bimha added in his ministerial statement to the National Assembly that the
government was also facing the threat of retaliation from trading
partners, with the State now mulling replacing the import management
programme with a “local content policy”.

“These challenges include, among others trade-off between balancing
existing employment within the retail and distribution outlets that import
and protection of the local manufacturing industries, delays in payments
to foreign suppliers of raw materials, and the prevailing liquidity crunch
which is currently depressing general aggregate demand,” he said.

“Other challenges are continued appetite for imports by consumers, poor
quality and delays in delivery of goods by the local producers due to less
competition from imports, incessant smuggling through the porous border
posts resulting in increased black marketing, monopolistic behaviour by
some local producers which has resulted in price increases, and the threat
of retaliation from the country’s neighbouring trading partners such as
South Africa and Zambia,” Bimha added.

This comes as many manufacturers in regional countries have called on
their governments to consider increasing taxes on imports from Zimbabwe,
to create a “level playing trade field”.

South Africa, which is Zimbabwe’s biggest trading partner, was miffed by
S1 64, to the extent of issuing Harare with a three-week ultimatum to
revoke the instrument or negotiate properly its controversial ban on the
importation of basic consumer goods from Pretoria, or face the
consequences.

Small traders and regional transporters also threatened to block the
country’s borders at the time to protest the ill-advised imports embargo.

Zambia, the country’s second biggest regional trading partner, is also not
happy with the imports ban, with Lusaka businesses urging their government
to consider increasing import taxes on Zimbabwean goods in retaliation to
the embargo.

“It’s time our government also retaliates because we cannot be accepting
their products here whilst they are imposing certain restrictions on the
imports in their country,” Roseta Mwape, the Zambia Association of
Manufacturers president, said then.

Under SI 64, the government banned the importation of coffee creamers,
Camphor creams, white petroleum jellies, body creams, baked beans, potato
crisps, cereals, bottled water, mayonnaise, salad cream, peanut butter,
jam, maheu, canned fruits and vegetables, pizza bases, yoghurts, flavoured
milk, dairy juice blends, ice-creams, cultured milk and cheese, among
other products.

Zimbabwe is currently in the throes of a severe economic crisis which has
seen the country experiencing debilitating cash shortages, as well as
rising unemployment and poverty levels.

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