Clothing retailers are allegedly abusing regional trade agreements to dump products – some of them reportedly factory rejects – on Zimbabwe’s market.
Source: Apparel firms under spotlght | The Sunday Mail August 6, 2017
Bureau Veritas, which signed a four-year contract with Government in 2015 to monitor the quality of imported products, told The Sunday Mail Business that of the 183 million imports identified as “problematic” in 2016, more than 11,3 million were textiles, footwear and leather products.
The Zimbabwe Clothing Manufacturers Association said confirmed consumers misgivings about the quality of imported garments.
“We accept that clothing is varied and covers a wide range of products. But there is blatant abuse of the regional trade agreements by many importers.
“In addition, many goods are coming in with ‘runners’ without the correct duty being paid and the practice of under-invoicing and under-declaring is common,” said ZCMA chair Mr Jeremy Youmans.
“Most of the complaints we have received relate to the quality of the imported garments being sold in stores, with many descriptions suggesting that they are garments which would have been rejected in most clothing factories.”
Zimbabwe’s textiles sector has for the past two decades been defined the end of preferential access to the lucrative South African market in 1992, and the expiry of the Multi-Fibre Agreement – a global treaty governing the trade of cotton textiles from 1974 – on January 1, 2005, which effectively opened the floodgates to cheap Chinese imports.
The rise of polyester has also hurt fibre.
Consumer Council of Zimbabwe executive director Mrs Rosemary Siyachitema recently said it would dispatch investigators to get to assess matters.
But in the meantime the sector is still struggling to wrest back influence from regional competitors such as Lesotho, Swaziland, Mauritius and South Africa, whose manufacturing is bouyed by low production costs and generous subsidies when compared to doing business in Zimbabwe.
The Reserve Bank of Zimbabwe is paying a five percent incentive to exporters, while China provides its manufacturers with a 17 percent export subsidy.
Also, there have been huge investments in Lesotho by Chinese investors, including by China Garment Manufacturers which is leveraging on the United States’ African Growth Opportunities Act of 2000 which gives preferential duty-free access to America’s US$17 trillion dollar economy.
Some Lesotho-made CGM-branded denim is finding its way to Zimbabwe.
Zimbabwean clothing manufactures say that while they are supplying between 20 percent and 25 percent of local demand, they can easily reach 75 percent if adequately capacitated.
Big franchises such as Edgars and Truworths have manufacturing units in Zimbabwe but continue to import large quantities.
While clothing manufacturers, according to ZCMA, wait for months to get foreign currency to import raw materials, importers of finished clothes are not facing any much hassles.
This effectively nullifies the clothing manufacturers’ rebate, which enables duty-free import of raw materials that cannot be made locally.
Mr Youmans said: “Although the RBZ set allocation of nostro balance funds to raw materials for value addition as one of the priority one classifications, this does not appear to be happening.
“You can’t manufacture garments without raw materials. Most of them are not produced locally and if you can’t import them, you can’t manufacture and you fail as a business.”
It has become increasingly difficult to avoid importing raw materials as suppliers become limited.
Zimbabwe has three large textile mills: IraZim (Cone Textiles), David Whitehead and Kadoma Textiles.
While Kadoma Textiles is the pick of the lot, it is operating at a very low level of capacity and is producing a small range of 100 percent cotton fabrics finishes and colours. Statutory Instrument ) 64 of 2016, which restricts importation of locally available goods, does not cover clothing.
Instead, the country’s borders continue to be convenient inlets for mules trafficking contraband second-hand items.
“SI 64 did include Item 36 which removed certain fabrics from the OGIL (Open General Import Licence), even though most of them are not even manufactured in this country.
We have raised this issue with Ministry of Industry and Commerce as we do not believe raw materials should be subject to import licensing and there was no consultation done with the clothing industry about the inclusion of those items,” said ZCMA’s Mr Youmans.
Discussions between the clothing industry and the Chamber of Mines of Zimbabwe, whose members are forecast to spend more than US$500 million on procurement, are underway to try and coax them to buy locally.
Some sector players however believe that if moral suasion does not work, compliance should be enforced through legislation.
There is a grave concern that dumping of sub-standard goods goes beyond clothing.
France-based certification agency Bureau Veritas, which helped establish a Consignment-Based Conformity Assessment in Zimbabwe in 2015, noted that it comes across “a lot of clothing that is not made of the declared material, cheating the consumer of quality comfort and durability”.
Mr Talent Malunga, the company’s contracts manager (Zimbabwe & Botswana), said previously more than half of imported goods had unknown levels of conformity to local minimum standards.
“Before the implementation of the CBCA programme, conformity of goods was widely ignored and more than 50 percent of the goods exported to Zimbabwe had an unknown level of conformity.
“Exporters had a vague idea of the conformity expectations. Zimbabwe is no longer perceived as a country where suppliers can dump products.
During the year 2016 alone more than 182 million products destined for Zimbabwe have been identified as problematic by Bureau Veritas. Conformity is now associated with any export to Zimbabwe,” he said.